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Appraisal S <br /> The City commissioned Nicollet Partners to complete an appraisal of the Reiling <br /> Communications Tower. Using an income approach, the appraiser valued the tower at$500,000. <br /> The income approach considers the net present value of the net income over a ten year time <br /> period to determine the value. The appraiser also evaluated the leases, including lease length and <br /> the risk of lease termination. This tower is considered desirable due to its location and height, <br /> which reduces the risk of lease termination. <br /> The appraiser estimated the replacement cost of the tower to be between $275,000 and $325,000. <br /> Due to confidential data within the appraisal, only the executive summary is attached <br /> (Attachment A). <br /> General Lease Provisions <br /> The tower currently has four tenants: Verizon, Nextera, American Messaging, and Clearwire <br /> Communications. As previously discussed, the leases are considered confidential data and the <br /> details cannot be released at this time. The four tenants produce a total annual rent of <br /> approximately $76,000. The tower is at just over 97 percent capacity, but the capacity could be <br /> increased with upgrades to the tower structure. <br /> Communication Tower Costs • <br /> Insurance <br /> Based on a value of$500,000,the City's insurance agent quoted an annual insurance <br /> premium of$4,000. <br /> Maintenance <br /> Dale Romsos at Omni Contracting reviewed the tower and provided a general cost <br /> estimate for maintaining the communications tower. He indicated that the maintenance <br /> for these types of towers is fairly straightforward and that this tower is in good condition. <br /> The maintenance for this type of tower typically involves the following: <br /> o Annual inspection - $3,000 to $4,000 <br /> o Annual light bulb replacement -$600 <br /> o Grounds maintenance (mowing, plowing) - $800 <br /> o Repainting every 15 years- $12,000 to$15,000 <br /> o Lighting electrical system replacement(if ever needed) - $12,000 to $15,000 <br /> City ofArden Hills <br /> FP,AC Meeting for June 8, 2010 <br /> i L4hdocsllahiAHdatalPlanninglConununity Development)Wireless Communication TowerslReiling Tower1060810-FPAC Memo-Reding Tower <br /> Purchase.doc4110 <br /> Page 2 of 4 <br />