AGENDA #4a

MEMORANDUM

TO:                  Roger L. Stancil, Town Manager

FROM:            Ray L. “Butch” Kisiah, Director of Parks and Recreation
Bill Webster, Assistant Director of Parks and Recreation

SUBJECT:       Extension of a Lease for a Cellular Transmission Tower at Homestead Park

DATE:             March 3, 2008

PURPOSE

The attached resolution would authorize the Manager to execute a lease that would allow SprintCom, Inc. to operate a cellular transmission tower at Homestead Park until September 20, 2013, with a provision that would allow SprintCom to further extend the lease for two additional five-year periods. Under these terms the contract could potentially be extended until September 20, 2023.

BACKGROUND

The Council adopted SprintCom’s franchise agreement on June 22, 1998.

On July 6, 1998, the Council approved a site lease agreement with SprintCom that allowed the company to place a transmission antenna on top of an existing Duke Energy transmission tower until 2008.

On February 11, 2008 the Council adopted a resolution that indicated the Council’s intent to lease the space to SprintCom.

Advertisements were scheduled for publication (News & Observer of Feb. 22, The Chapel Hill News of Feb. 24, News & Observer of Feb. 29 and The Chapel Hill News of March 2) stating the Council’s intent to enter into a lease agreement as required by G.S. § 160A-272.

DISCUSSION

An electric transmission line owned and operated by Duke Energy is located within Homestead Park. The transmission line crosses the park in a generally south to north alignment near the western boundary of the park.  The park’s major parking area lies under much of its length. 

The existing antenna is on top of a 95-foot electric transmission tower that is located between the new Homestead Park Aquatics Center and the skateboard facility.  The cellular transmission equipment extends 6.5 feet above the top of the existing tower. A lightning rod extends an additional 3 feet above the transmission equipment bringing the combined total height of the tower, transmission equipment, and lightning rod to the 101.5-foot level.  Since 1998 we have received no complaints from the public related to this equipment.

Proposed Site Lease: If the Council authorizes the Manager to proceed, we would execute an extension of the existing site lease with the following key points:

• The term would be 5 years with two possible five year extensions that could be executed at the company's discretion.
• The Town would receive $24,000 in the first year. The lease amount would increase by 3% each year for each subsequent year. If SprintCom extends the lease date through 2023 the rent in the final year would be $36,300. The first year’s lease amount of $24,000 exceeds the $21,348 average lease amount paid by SprintCom in the Triangle area for single provider transmission towers. In this case, SprintCom must also pay Duke Energy a fee for use of the transmission tower.
• The Town could terminate the agreement if the property is required for some other public purpose

RECOMMENDATION

Manager’s Recommendation: That the Council adopt the attached resolution which would authorize the Manager to execute an agreement with SprintCom Inc. that would allow SprintCom, Inc. to continue to operate a cellular transmission tower at Homestead Park until September 20, 2013, with a provision that would allow SprintCom to further extend the lease for two additional five-year periods.