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Los Altos Hills committee weighs $400,000 buyout vs lower long-term rent from Verizon; seeks counsel input
Summary
Verizon offered Los Altos Hills either a new lower-rate lease (about $16,800/year with 12.5% escalators) or a $400,000 lump-sum for a perpetual 15x20-foot equipment easement. The committee expressed concern about perpetual easements and demand a legal review and technical input before negotiating.
A subcommittee of the Finance & Investment Committee presented a preliminary financial assessment of a Verizon proposal for a town-owned cell-site location at 26379 West Fremont Road.
Dominic, who led the subcommittee’s review, summarized that Verizon’s options are: a modified renewal at roughly $16,800 a year with a 12.5% increase every five years (presented as a sequence of five-year terms) or a one-time lump-sum payment of $400,000 in exchange for a perpetual easement covering a 15-by-20-foot ground equipment area. Verizon’s representative, Lynn, clarified the payment would be for the ground-equipment easement (the equipment “shed”), not the tower structure itself.
“It's a perpetual easement, but we just honestly don't know how long we would actually need macro sites,” Lynn said, describing industry shifts toward smaller “micro” cells and the company’s efforts to align site portfolios with changing technology.
The subcommittee ran a present-value analysis that assumed a town investment return of 3.5 percent and found that a 20‑year rent stream under Verizon’s proposed lease equates to a present value of roughly $293,000—below the $400,000 lump sum. If the lease were to continue for 30 years, the rent stream would exceed $400,000 in present-value terms.
Committee members raised several concerns: perpetual easements would limit future land-use flexibility, the lump-sum buyout might be sold by a financing partner to a third party, and Verizon typically retains termination rights that could shorten the effective lease term.
“We're not saying yes; we're not saying no,” the chair said. Members urged staff to pursue legal review and suggested hiring a consultant experienced in telecom site valuations and lease negotiations. One member recommended exploring middle-ground options—such as a finite long-term buyout (30 years) or negotiated relocation/first-right protections—rather than granting a perpetual easement.
The Verizon representative said the company could consider alternative deal structures but noted that termination rights and site-audit decisions are standard in their leases. Staff was directed to follow up with the town attorney, gather additional technical input from the technology committee, and, if helpful, engage specialized consultants before returning negotiation recommendations to the full council.
No formal action was taken at the meeting; the committee framed the next steps as research and negotiation preparation.
