For Economic Development Committee [February 26, 2020]
TO: Honorable Economic Development Committee Members
APPROVAL: Rod Foster, City Administrator
FROM: Matt Schneider, Community Development Director
Title
Active Review Notification - AT&T Cell Site lease
Body
BACKGROUND:
City staff were recently contacted by Black Dot Wireless on behalf of AT&T concerning the terms for three existing lease agreements with AT&T for wireless facilities located at 1481 North Ayala Drive, 2611 North Linden Ave., and 242 East San Bernardino Ave. AT&T is seeking a lease amendment to reduce the rent terms to better align with current market conditions.
ANALYSIS/DISCUSSION:
Wireless carriers such as AT&T are actively reviewing lease agreements and seeking amendments to improve business terms and meet their long-term network objectives. Advances with small cell technology are providing carriers with options to deploy more cost effective options than traditional tower mounted cellular arrays. While AT&T has indicated that they would like to continue to operate at their three existing locations, they have suggested in their correspondence to staff (attached) that they may look at alternative options including lease termination if there are unable to negotiate more favorable lease terms.
RECOMMENDATION:
Based on the potential loss of revenue if AT&T were to exercise their termination rights, staff recommend the EDC refer this matter to the full Council at the next available Closed Session and seek authorization for staff to enter lease renegotiations. Ultimately, if both parties are unable to reach an agreement with regard to rental terms the existing contract will remain in effect unless terminated or otherwise not renewed.
Attachment:
January 13, 2020 Letter-Black Dot Wireless