COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

Buck’s Elbow Mountain Tower Lease

 

SUBJECT/PROPOSAL/REQUEST:

Request to Set a Public Hearing to Approve a Tele-communications Tower Lease on Buck’s Elbow Mountain

 

STAFF CONTACT(S):

Messrs. Tucker, Elliott, Davis, Hanson, and Ms. Kim

 

LEGAL REVIEW:   Yes

 

 

AGENDA DATE:

May 13, 2009

 

ACTION:                INFORMATION:   

 

CONSENT AGENDA:

  ACTION:    X       INFORMATION:   

 

ATTACHMENTS:   Yes

 

REVIEWED BY:

 

BACKGROUND:

The County owns a 120-foot telecommunications tower and tower site located on Buck’s Elbow Mountain.  This tower hosts equipment used by the Charlottesville-U.Va.-Albemarle County Emergency Communications Center (“ECC”) as part of the regional 800 MHz. public safety radio system.  From 1996 to 2001, the County leased excess space on the tower, as well as ground space for an equipment shelter, to Charlottesville Cellular Partnership, the local licensing entity for U.S. Cellular Corporation.  In July, 2001, the County renewed the lease for another five-year term that ended in July, 2006.  Since the expiration of the lease, U.S. Cellular has remained on-site and continued to make payments according to the lease terms.  Payments for FY 2007 and FY 2008 totaled $16,348.29.

 

After obtaining a fair market value study from RCC Consulting, a firm that the ECC has contracted for various telecommunications matters, staff began negotiating a new lease in the spring of 2008.  The resulting lease, attached to this summary, has been accepted by U.S. Cellular.  Virginia Code § 15.2-1800 requires the Board to hold a public hearing prior to approving a lease of this County property.

 

STRATEGIC PLAN:

Goal 1:  Enhance the Quality of Life for all Albemarle County Residents. 

 

DISCUSSION:

In the proposed lease, U.S. Cellular agrees to significant retroactive rent increases for FY 2007 and 2008, as well as significantly higher rental rates for the new, 5-year term of the lease.  These increases reflect the fair market values determined by RCC Consulting.  See Attachment A, Section 7 – Rent.  For the first year of the new term (July 1, 2008-June 30, 2009), U.S. Cellular will pay $24,189—a roughly 296% increase in rent from the approximate annual rent of $8,174 for FY 2008.  In addition, U.S. Cellular will pay the difference between the new rental rate and the rate paid in years 2006 and 2007 as retroactive rent.  Within ten days of lease execution, U.S. Cellular will pay both the retroactive rent increases and Year 1 rent for a total of $54,124.71.  During the 5-year term, rent will increase by 3% each year.  Following this initial term, the parties may extend the lease for up to two renewal terms of five years each.  Rental rates for these renewal terms will be negotiated based on then prevailing fair market values for the tower space. 

 

BUDGET IMPACT:

In addition to the $54,124.71 payment for the retroactive increase and Year 1 of the lease, the following payments will be made in subsequent years of the 5-year term:

Year 2:  $24,915

Year 3:  $25,662

Year 4:  $26,432

Year 5:  $27,225

 

Should U.S. Cellular choose to locate an additional 10 foot microwave dish on the tower, the above annual rents will increase by the following amounts:

Year 2: $8912   

Year 3: $9179

Year 4: $9454

Year 5: $9738

 

RECOMMENDATIONS:

Staff recommends that the Board set a public hearing for June 3, 2009 to consider the attached lease proposal in accordance with Virginia Code §15.2-1800.

 

ATTACHMENTS

A – Proposed Lease

Return to consent agenda

Return to regular agenda