04-30-07 Item 7B, Water Tower Lease Agreement

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~ ~HILLS MEMORANDUM DATE: April 30, 2007 Agenda Item 7.B TO: Mayor and City Council FROM: James Lehnhoff, City Planner I/' SUBJECT: Cingular Wireless Antenna Contract - Second Amendment Request Consider a Motion to Approve/Deny the Second Amendment to the Water Tower Lease Agreement Dated May I, 2007, from Black Dot Wireless on behalf of Cingular Wireless PCS. DiscussionlBackl!round In late 2006, Black Dot Wireless, on behalf of Cingular Wireless, contacted the City and indicated that they would be submitting a proposal to modifY the contract for their cellular antennas that are attached to the City's water tower at 4251 Fernwood Avenue. In late March 2007, Black Dot Wireless submitted a proposed second amendment to the cellular antenna contract. The second amendment would change the rent, the method of rent increases, termination provisions, and, potentially, antenna expansion procedures. As will be noted below, the current contract does not expire until April 2014; however, Black Dot could withdraw from the contract as early as April 2009. Staff has asked Black Dot Wireless to submit reasons for the proposed changes to include with this memorandum; however, they have stated that they prefer to discuss the proposed changes and the reasons for the proposed changes at a City Council meeting. Mr. Stephen Merill, a representative from Black Dot Wireless, will be at the April 30, 2007, City Council meeting via telephone. The remainder of this memorandum summarizes the original contract, the first amendment to the contract, and the proposed second amendment. Original Contract On April 18, 1989, the City entered into agreement with Minnesota Cellular Telephone Company, which permitted them to attach cellular phone antennas to the City's water tower and place electronic equipment at the base of the City's water tower at 4251 Fernwood Avenue. The initial lease was for five years, and the lease was set to automatically renew for up to four 1