Item 4B - AT&T Cell Site Lease RenewalM E M O R A N D U M
August 20, 2019
To: Shana Yelverton, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Item 4B: Approve the AT&T Mobility cell site lease renewal located
at 400 North White Chapel (Bicentennial Park) location.
Action
Requested: Approve the AT&T Mobility cell site lease renewal located at
400 North White Chapel (Bicentennial Park) location.
Background
Information: The purpose of this item is to approve the AT&T Mobility cell
site lease renewal located at 400 North White Chapel
(Bicentennial Park) location. The terms of the lease include
receiving an annual payment of $33,232.24 per year
beginning August 2020. They are also proposing extending
the lease agreement until August 2055, with a 10% rent
increase every 5 years.
In fiscal year 2018, the City of Southlake received
$44,232.24 for this lease. The terms proposed in this
renewal do reflect a decrease. After speaking with the lease
consultant for AT&T and reviewing legislative changes that
will have a significant impact on leases at the local
government level, staff is recommending moving forward
with the agreement.
Financial
Considerations: The 2020 proposed fiscal year budget reflects the lease
agreement revenue outlined in AT&T’s proposal.
Strategic Link: This agenda item is linked to the Southlake Strategy Map
through the following objectives:
• B2 Collaborate with select partners to implement
service solutions
• B4 Provide high quality services through sustainable
business practices
Citizen Input/
Board Review: No requirement exists to review the lease with citizens or
boards.
Honorable Mayor and City Council
Page 2 of 2
Legal Review: No requirement exists to review the lease with the City
Attorney.
Alternatives: The alternative to approving the lease would be terminating
the lease contract with AT&T. This would impact revenue
received by the City of Southlake, as well as reception in the
area.
Supporting
Documents: AT&T Mobility Cell Site Lease Proposal
Staff
Recommendation: Staff recommends approving the lease agreement as
proposed.
Md7, LLC | 10590 West Ocean Air Drive, Suite 300 | San Diego, CA 92130 | 888.553.6599
July 29, 2019
Kodi Wilder
1400 Main Street Suite 320
Southlake, TX 76092
Re: Communications Facility located at 400 NORTH WHITE CHAPEL BOULEVARD, SOUTHLAKE, TX
76092
Dear Landlord,
As you are aware, AT&T Mobility (“AT&T”) has partnered with Md7 to work with you to facilitate certain
modifications to the cell site lease on your property. These modifications will allow AT&T to meet current
business requirements and enhance your site’s value to the network.
Changes in the Wireless Industry
Recent industry developments are changing how wireless telecommunications carriers operate. In the past,
carriers focused on rapidly building out their networks in order to provide the best coverage. Today, while
consumers are enjoying greater services and better coverage than ever before, operating costs continue to
escalate. As a result, the wireless industry is also focusing on operating networks as efficiently as possible.
Eliminating Risk and Increasing Value
AT&T is addressing this shift by reviewing its cell site portfolio. AT&T has partnered with Md7 to offer
selected landlords like you the opportunity to minimize the business risks associated with industry uncertainties
and to increase the value of your cell site lease.
Criteria for Cellular Site Retention/Rent Guarantee Period
AT&T is willing to offer the following option to secure a longer-term lease with you:
$33,232.24 per year, commencing August 9, 2020
10% rent increase every 5 years/year, commencing August 9, 2020
Extension of Lease through August 8, 2055
STANDARD Expansion of Permitted Use
“Lessee, its personnel, invitees, contractors, agents, sublessees, or its authorized sublessees, or assigns
may use the Premises, at no additional cost or expense, for the transmission and reception of any and
all communications signals and to modify, supplement, replace, upgrade, expand, including but not
limited to the number and type(s) of antennas, or refurbish the equipment and/or improvements
thereon, or relocate the same within the Premises at any time during the term of this Lease for any
reason, or in order to be in compliance with any current or future federal, state or local mandated
application, including but not limited to emergency 911 communication services or for any other
reason. Lessor shall reasonably cooperate in obtaining governmental and other use permits or
approvals necessary or desirable for the foregoing permitted use. If Lessor does not comply with the
terms of this section, in addition to any other rights it may have at law, Lessee may terminate this Lease
and shall have no further liability to Lessor. If Lessor does not comply with the terms of this section,
Lessee will have the right to exercise any and all rights available to it under law and equity, including
the right to cure Lessor’s default and to deduct the costs of such cure from any monies due to Lessor
from Lessee.”
Md7, LLC | 10590 West Ocean Air Drive, Suite 300 | San Diego, CA 92130 | 888.553.6599
Termination
“In addition to any rights that may exist in the Lease, Lessee may terminate the Lease at any time with
thirty (30) days prior written notice to Lessor.”
STANDARD Expansion of the Premises
“Lessor grants, to the extent practicable and on a space available basis, at no additional cost or
expense, the Lessee the right to enlarge the Premises or the Lessor shall make space available on the
Property for Lessee so that Lessee or its authorized sublessees may implement any necessary
modifications, supplements, replacements, refurbishments, or expansions to the Communications
Facility or to any equipment related thereto, or for any other reasons, as determined by Lessee in its
sole discretion.”
24/7 Access
“Lessor hereby grants to Lessee, its authorized sublessees, and to any public or private utility serving
Lessee’s Communications Facility or related equipment, access to the Premises and to and over the
Property twenty-four hours per day, seven days per week (24/7), including but not limited to, access
from an accessible, open and maintained public road to the Premises, for the installation, maintenance,
repair, modification, alteration, or refurbishment of the Communications Facility or any equipment
related to such Communications Facility as such access is deemed necessary by Lessee, in its sole
discretion, without the requirement of notice by Lessee to Lessor. In the event that any public or
private utility serving Lessee’s Communications Facility is unable to use the access provided to Lessee,
the Lessor hereby agrees to grant additional access to Lessee or to such public or private utility, for the
benefit of Lessee, at no cost to Lessee and pursuant to the same terms and conditions as noted above.
The terms and conditions regarding access in the Agreement remain in full force and effect, except as
modified by this paragraph.”
Sale of Property
(a) “Lessor shall not be prohibited from the selling, leasing or use of any of the Property or the
Surrounding Property except as provided below.
(b) If Lessor, at any time during the Term of this Agreement, decides to rezone or sell, subdivide
or otherwise transfer all or any part of the Premises, or all or any part of the Property or
Surrounding Property, to a purchaser other than Lessee, Lessor shall promptly notify Lessee
in writing, and such rezoning, sale, subdivision or transfer shall be subject to this Agreement
and Lessee’s rights hereunder. In the event of a change in ownership, transfer or sale of the
Property, within ten (10) days of such transfer, Lessor or its successor shall send the
documents listed below in this subsection (b) to Lessee. Until Lessee receives all such
documents, Lessee shall not be responsible for any failure to make payments under this
Agreement and reserves the right to hold payments due under this Agreement.
i. Old deed to Property
ii. New deed to Property
iii. Copy of current Tax Bill
iv. New IRS Form W-9
v. Completed and Signed AT&T Payment Direction Form
vi. Full contact information for new Lessor including phone number(s)
(c) Lessor agrees not to sell, lease or use any areas of the Property or Surrounding Property for
the installation, operation or maintenance of other wireless communications facilities if such
installation, operation or maintenance would interfere with Lessee’s Permitted Use or
communications equipment as determined by radio propagation tests performed by Lessee in
Md7, LLC | 10590 West Ocean Air Drive, Suite 300 | San Diego, CA 92130 | 888.553.6599
its sole discretion. Lessor or Lessor’s prospective purchaser shall reimburse Lessee for any
costs and expenses of such testing. If the radio frequency propagation tests demonstrate levels
of interference unacceptable to Lessee, Lessor shall be prohibited from selling, leasing or using
any areas of the Property or the Surrounding Property for purposes of any installation,
operation or maintenance of any other wireless communications facility or equipment.
(d) The provisions of this Section shall in no way limit or impair the obligations of Lessor under
this Agreement, including interference and access obligations.”
Right of First Refusal
“Notwithstanding any other provisions contained in the Agreement, if at any time after the date of this
Third Amendment, Landlord receives a bona fide written offer from a third party seeking any sale,
conveyance, assignment or transfer, whether in whole or in part, of any property interest in or related
to the Premises, including without limitation any offer seeking an assignment or transfer of the Rent
payments associated with the Agreement or an offer to purchase an easement with respect to the
Premises (“Offer”), Landlord shall immediately furnish Tenant with a copy of the Offer. Tenant shall
have the right within ninety (90) days after it receives such copy to match the financial terms of the
Offer and agree in writing to match such terms of the Offer. Such writing shall be in the form of a
contract substantially similar to the Offer, but Tenant may assign its rights to a third party. If Tenant
chooses not to exercise this right or fails to provide written notice to Landlord within the ninety (90)
day period, Landlord may sell, convey, assign or transfer such property interest in or related to the
Premises pursuant to the Offer, subject to the terms of the Agreement. If Landlord attempts to sell,
convey, assign or transfer such property interest in or related to the Premises without complying with
this Section 6, the sale, conveyance, assignment or transfer shall be void. Tenant shall not be
responsible for any failure to make payments under the Agreement and reserves the right to hold
payments due under the Agreement until Landlord complies with this Section 6. Tenant’s failure to
exercise the right of first refusal shall not be deemed a waiver of the rights contained in this Section 6
with respect to any future proposed conveyances as described herein.”
Removal/Restoration
“In addition to the terms set forth in the Lease, Lessor agrees that the Communications Facility and
any related equipment brought to the Premises by Lessee, its agents, contractors, predecessors-in-
interest or sublessees, shall be and remain Lessee’s personal property or the personal property of its
sublessee(s), as the case may be. Lessor waives any and all rights it may have, including any rights it
may have in its capacity as Lessor under the Lease to assert any liens, encumbrances or adverse claims,
statutory or otherwise, related to or in connection with the Communications Facility or any portion
thereof. Lessee, in its sole discretion, may remove the Communications Facility or any portion of the
Communications Facility at any time during the Term of the Lease, without notice to Lessor and
without Lessor’s consent. Notwithstanding any terms to contrary, Lessee will not be responsible for
the replacement of any trees, shrubs or other vegetation, nor will Lessee be required to remove from
the Premises or the Property any foundations or underground utilities. Lessee, may, in its sole
discretion, transfer any improvements or alterations to the Premises to Lessor at any time during the
Term of the Agreement without notice to the Lessor and without the Lessor’s consent.”
This letter of understanding is subject in all respects to the preparation, execution and delivery of a definitive
amendment in form and substance mutually agreeable to each of us. This letter will not be legally binding
between us with respect to the proposed business relationship, but instead serves as a statement of our mutual
intent to work toward entering into such an amendment.
Md7, LLC | 10590 West Ocean Air Drive, Suite 300 | San Diego, CA 92130 | 888.553.6599
AT&T values its affiliation with you and hopes to continue a long and mutually profitable relationship in the
years to come. After having reviewed these options, please contact me prior to August 7, 2019.
Thank you for your consideration.
Sincerely,
David Palet
Lease Consultant
d: (858) 775-0967
a: 10590 West Ocean Air Drive, Suite 300
San Diego, CA 92130
e: dpalet@md7.com
Authorized Agent for AT&T Mobility
cc: Gregory D. Ohmer
Director-Network Planning, AT&T Mobility