Item 7B, T-Mobile Cell Antennas - Laserfiche WebLink

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Although the T -Mobile legal department has not finalized the latest draft, additional significant changes to the lease are not expected. However, the yearly lease rate and yearly rate of increase have not been determined. T-Mobile is proposing a lease rate of$1,500 per month ($18,000 per year) with a yearly increase of three percent. The first term of the lease is for five years, and T- Mobile can extend the lease for three additional five year terms subject to the provisions in the lease. Such lease extensions are common in the other leases in Arden HiIls and in other cities. A representative for T -Mobile will be at the City Council meeting to discuss the proposed rate, yearly increase, and terms. If a rental rate and yearly increase can be finalized at the meeting, the Council Can authorize Staff to complete the lease language review and execute the contract based upon the negotiated rental rates and increases. If there are any significant changes to the draft lease after the Council review, those changes would be brought back to the City Council for approval prior to executing the lease. Alternatively, the Council Can require the fuIllease to come back to the Council prior to execution. The conditional use permit is contingent upon approval of the lease, and the lease is contingent upon the zoning code amendment that will be presented to the Planning Commission in June. Lease Comparison For comparison, the existing ceIlular antenna leases on the City water towers are as foIlows: 2008 Arden Hills Cell Lease Information for City Water Towers Company 2008 Rate Increase Contract Location Monthly Yearly Rate Frequency Approved Expires Snrint $1,150.00 $13,800.00 15% Everv 5 years 2000 2025 South Nextel $991.00 $11,892.00 15% Everv 5 years 1995 2020 South AT&T $1,355.79 $16,269.48 CPI Everv 5 years 1989 2014 North T-Mobile 1 $1,150.00 $13,800.00 15% Every 5 years 2000 2025 South The proposed three percent yearly increase from T -Mobile results in a higher rental rate than a 15 percent increase every five years. For example, by year six of the lease, the $18,000 base rent would have increased to $20,866.93 with a three percent yearly increase or to $20,700 with a 15 percent increase every five years. Although there is not a standard yearly increase in the adjacent communities, COmmon increases range from 3-5 percent per year or a 15 percent increase every five years. Although height, location, roadways, number of antennas, and population density Can impact rental rates, the foIlowing rates and heights were reported by adjacent communities in 2007: \\Metro~inet.us\ardenhillslPlanninglPlanning Cases\2008\08~007 T~Mobile CUP (PC Approved)\052708 - CC Report ~ T~mobile CUP.doc Page 3 of6