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Page 2 of 2 <br /> <br />1. Decrease from 2021 lease rate of $49,499 (2020 rate plus 4%) to an annual rate of $38,400.00 <br />2. Decrease from current 4 percent annual adjustment to a 12.5 percent adjustment every five <br />years commencing January 1, 2026. <br />3. Extension of lease from current sunset of December 31, 2044 to December 31, 2045. <br />4. Addition of new Permitted Use provision as outlined in the letter. <br />Staff conducted a lease rate comparison with the cities of Roseville, Shoreview and New Brighton <br />for cell tenant leases on water tower facilities, as provided in Attachment B. Lease rates generally <br />range from $28,549 to $44,400 per year, with annual lease rate adjustments from 1.5 to 5 percent. <br />AT&T has made substantial investments in their equipment at the North Water Tower over the past <br />three years, which may result in challenges for them to terminate the lease and relocate to other <br />facilities. However, AT&T claims there is a possibility they would consider relocation based on the <br />terms and conditions of the existing site lease agreement. <br />Staff is seeking direction from the City Council on the following items. <br />1. Does the City Council wish to direct staff to renegotiate the terms of the existing lease <br />agreement with AT&T for the North Water Tower site? <br />2. If there is interest in renegotiations, does the Council have suggestions regarding the initial <br />response to AT&T’s requested terms? <br /> <br />Budget Impact <br />The 2020 lease payment from AT&T to the City of Arden Hills is $47,595, with a 4 percent annual <br />adjustment. A negotiated decrease in the annual lease rate or a termination of the lease agreement <br />would decrease revenue to the City’s General Fund. <br /> <br />Attachments <br />Attachment A: AT&T Request to Renegotiate Lease Agreement <br />Attachment B: Lease Rate Comparison <br />Attachment C: Current AT&T Site Lease Agreement and Amendment <br /> <br /> <br />