Lewis covers a lot of the points I would.
I have done some consulting for a university that was approached similarly. The tower company was fixated on some parts of the lease but never focused on things like escalations and such. We did the amortizations of the escalators and they still over time would exceed the rent they are collecting. So moral of the story is make sure he get in writing the document they would like to renegotiate before you put too much time in it. Have them produce an executable version, not just an email highlighting what they want to do. In the end the legal signed document is the only thing that matters. Other points to consider. They are calling your bluff. The amount you want to negotiate back you need to know seriously what their other options are. Strict zoning is one thing but one of the justifications for forcing a municipality to allow a new tower by federal law is the economic clause. They could easily make the case for a new tower if they can prove that their rent will exceed the rent they receive, but beware. Their lease with eh carrier may have clauses to deal with that and they can increase the rent to the carrier based on their ground lease. This is not always the case though. Look at the tower companies termination options. Do they have the right to terminate at each 5 year renewal? Are they required to return the site back to previous state prior to building? Does the landowner have the right to assume the tower in its current state if they chose not to renew? All serious points to consider in their offer for renegotiation. If it is possible for the landowner to keep the tower if they terminate that might be a good move and then just sign a reasonable lease with the carrier and keep the revenue. But if the tower company wants to play hard ball they may take the tower down with no option for the landowner to keep it standing, that would include ripping up the tower foundation. Have the landowner clearly research and understand all of these points. Then decide if renegotiation is smart. Better to have the site stay there producing revenue even if it is less, than to possibly lose all totally in the near future. But the legal documents are going to be that key. Also research the tax implications on taking the lump sum option. In some cases that might get taxed at over 50%. Bottom line, play devil’s advocate and think about what the worst case situation is going to be with your decision. Thank you, Brian Webster www.wirelessmapping.com From: AF [mailto:af-boun...@af.afmug.com] On Behalf Of Lewis Bergman Sent: Wednesday, April 8, 2020 2:24 PM To: AnimalFarm Microwave Users Group Subject: Re: [AFMUG] American Tower trying to renegotiate Tower Lease with landlord 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
-- AF mailing list AF@af.afmug.com http://af.afmug.com/mailman/listinfo/af_af.afmug.com
