Lots of things to talk about here but lets hit the high points. Tower companies are getting squeezed by carriers.
1. First I'll say I really don't like term escalations, I favor annual. Since they are already trying to back down their costs that one is a non starter but we can get back to that. 2. A populated city is like saying a large lake. If you live next to Superior, nothing is a large lake. What population are we talking about? 3. Don't ever give anything without getting something. If your friend is worried, maybe a smaller fixed payment and a large % of revenue would reduce their risk and make he gets a fair share of the revenue. 4. Look to recent municipal leases as they typically disclose a lot of info about the final negotiations. 5. Depending on his age, maybe the lump sum is a good deal, negotiated higher of course. If he is looking for a good way to pass along revenue to heirs, maybe not. 6. He doesn't own the tower so can't negotiate directly with Verizon unless he is going to build one or let them do it. I have seen Verizon (not American) move off of a tower and build one 1/4 mile away when they didn't like terms. The terms were that they wanted a tower completely rebuilt, but didn't want to pay any additional fees to have it replaced for the extra load. So they will move. If it were me, not knowing anything else about the situation, I would come back with $6000 per year, increase annually at 3% and 33% of the revenue paid Jan1 for the prior year and see what happens. Annual audits with unsolicieted revenue statements mailed yearly with the check., yada, yada. I am making assumptions on what revenue might be since no pops were given. On Wed, Apr 8, 2020 at 11:05 AM Kurt Fankhauser <lists.wavel...@gmail.com> wrote: > Someone I know owns a property with a mono-pole on it owned by American > Tower. The landowner has a pretty good lease IMO. They are getting $13,000 > lease payments annually that increase 15% every 5 years. The tower is > downtown in a populated city and Verizon is the only tenant on it and there > is not another cell tower within a mile of this one. > > The contract auto-renews every 5 years and coming up on its 2nd auto-renew > and American Tower has contacted them wanting to "re-negotiate the lease." > They say that the current terms are not "feasible" anymore and that they > might look for alternative sites and have made the following offer: > > • A one-time lump sum payment of $180,265.86 in exchange for a 99-year > term easement paid at close in lieu of rental payments > > OR > > • $700.00 per month rent commencing 08-01-2020 > • 10% 5-year term escalation effective 08-01-2021 and every 5 years > thereafter > • Providing 6 terms of 5 years each, final expiration date will be > 07-31-2071 (current expiration is 7-31-2041) > > Both those offers are less than what the current lease payments are, the > one time buyout will break even in 15-20 years. So what I'm wondering here > is American Tower trying to pull their bluff on saying they will "look for > alternative sites" ? > > I don't really see them going through all the hassle to build another site > close to this one just to get a $400 cheaper/per month payment. Verizon > really needs this site downtown because there are no other towers close to > it and the city zoning is so strict that no new towers can be built. > > Any tips for dealing with the tower owner? > > -- > AF mailing list > AF@af.afmug.com > http://af.afmug.com/mailman/listinfo/af_af.afmug.com > -- Lewis Bergman 325-439-0533 Cell
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