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Trustees review proposed lease change for telecommunications tower at 41 North Elliott; no decision made
Summary
Pryor Creek EDTA trustees discussed a proposed amendment to replace a remaining 41-year mobile-tower lease with a 99-year lease for $177,000 up front, requested financial analysis and clarification of maintenance obligations, and deferred a final recommendation to council.
The Pryor Creek Economic Development Trust Authority on Feb. 10 discussed a proposed amendment to the lease for a communications tower located at 41 North Elliott. The proposal would replace the remaining 41 years of a 50-year original lease with a 99-year lease in exchange for a one-time payment of $177,000.
Staff told trustees the existing lease began with an initial five-year term followed by nine successive five-year renewals and currently yields about $660 per month; under the existing escalation schedule, total payments over the original 50-year term were previously calculated to sum to $573,744.18. The proposed deal would provide a lump-sum payment now in exchange for long-term rights; staff noted the time value of money and advised a financial analysis to compare investing the upfront funds against continuing the monthly revenue stream.
Trustees identified several questions for follow-up: why a remaining 41-year lease would be extended to 99 years; whether any maintenance obligations (such as upkeep of the nearby Hidden Park) remained in the agreement; which lease terms had changed in renewals; and what the city currently uses the monthly revenue for. Staff said they would have a trustee (Scott) contact the tower company (Branch Towers) and return to the authority with detailed economics, comparisons to T-bills and CDs, and clarification on park maintenance obligations.
No action was taken at the EDTA meeting; trustees said they would provide a written economic comparison and consult with council before making a recommendation.
