The URL can be used to link to this page

Home My WebLink AboutSublease Trnsfr - T-Mobile to Crown CastleREQUEST: SUBMITTED BY: APPLICANT: CITY OF PALM DESERT SPECIAL PROGRAMS DEPARTMENT STAFF REPORT APPROVAL OF CELLULAR TOWER SUBLEASE TRANSFER FROM T-MOBILE TO CROWN CASTLE FOR THE 43-002 SAN PABLO AVENUE SITE (CIVIC CENTER PARK), PALM DESERT, CALIFORNIA Frankie Riddle, Director of Special Programs T-Mobile USA, Inc. 12920 SE 38th Street Bellevue, WA 98006 Crown Castle 2000 Corporate Drive Canonsburg, PA 15317 DATE: June 13, 2013 CONTENTS: Acknowledgement and Consent Letter Recommendation By Minute Motion, authorize the City Manager to execute the Letter of Acknowledgement and Consent to accept T-Mobile cellular tower sublease transfer to Crown Castle. Background In May 2003, the City entered into an Agreement with Cingular Wireless LLC, which later became T-Mobile, for the cellular tower site at 43-002 San Pablo Avenue (Civic Center Park). The term of the original Agreement provides the option of five automatic term extensions, at five year increments ending in 2025. The current monthly lease rate is $2,240.31 ($26,883.72 annually) and has an annual 3% increase based on the previous year's lease rate. On November 7, 2012, the City received notification from T-Mobile that it had entered into an agreement regarding its tower portfolio with Crown Castle and that the transaction should be completed by the end of November 2012. In addition, the letter STAFF REPORT T-MOBILE LEASE TRANSFER TO CROWN CASTLE JUNE 13, 2013 PAGE 2 indicated that at the close of the transaction, T-Mobile would assign all of its rights in the site and lease to a T-Mobile West Tower LLC subsidiary. The T-Mobile subsidiary would then enter into a master prepaid lease (basically a sublease) with a subsidiary of Crown Castle to manage and operate the site and lease. Crown Castle will have the option to purchase the lease at a later date if it so chooses. City Attorney Dave Erwin requested clarification of specific information (i.e., contact and insurance information and confirmation that Crown Castle is aware of all obligations within the contract and would abide by same). As of June 3, 2013, the City received all requested information and confirmation. Fiscal Analysis This action will not have a fiscal impact to the City. All rights and responsibilities as outlined within the Agreement still stand along with the lease fees which will now be paid by Crown Castle versus T-Mobile. Submitted By: Fran ' Ri 1 Director of Special Programs Paul S. Gibson Director of Finance Approval: M. Wohlmuth Manager CITY COUNCILACTION APPROVED RECEIVED DENIED OTHER MEETING DATE ln- l.3- aOI 3 AYES. he/Ism lA173P1Tar►ner tie,b'er, (-tarni K NOES: dole ABSENT: non vi,=! ABSTAIN: e VERIFIED BY: iMg I r Original on File with City Clerk's Office T-Mobile USA, Inc. 12920 SE 38th Street, Bellevue, WA 98006 April 22, 2013 City of Palm Desert 73510 Fred Waring Dr. Palm Desert, CA 92260-2578 T-Mobile Site ID: IE04160A SENT BY ELECTRONIC MAIL Re: The lease ("Lease") for the premises located at or about 43002 San Pablo Ave., Palm Desert, CA 92260 ("Site"), and the transfer of the Lease to T-Mobile West Tower LLC. Dear Lessor: It is my understanding that you may have some questions with regard to the T-Mobile USA, Inc. ("T- Mobile") / Crown Castle International Corp. ("Crown") transaction. This letter endeavors to clarify that transaction and notices sent to Lessor. On September 28, 2012, T-Mobile and Crown entered into an agreement ("Agreement") regarding the tower portfolio of T-Mobile and its affiliates, which includes your Site. T-Mobile sent Licensor notice of the transaction via letters in October and November 2012. The initial stage of the transaction closed on November 30, 2012. Section 12 of the Lease provides that "Lessee may assign this Lease at any time to any of Lessee's affiliates." Thus, T-Mobile (including its affiliates) assigned the Lease and all of its rights in the Site and Lease to T-Mobile West Tower LLC, a wholly -owned subsidiary of T-Mobile and an affiliate of T-Mobile West LLC, without the need for Lessor's consent. Also at closing and as part of the Agreement, T-Mobile West Tower LLC entered into a master prepaid lease (basically a sublease) which grants certain rights to CCTMO LLC, a subsidiary of Crown. These rights include the right to operate certain sites in the tower portfolio of T-Mobile and its affiliates and an option in the future to acquire T-Mobile's (including its affiliates') interest in the sites. Under the master prepaid lease, T- Mobile West Tower LLC would remain the owner of the rights, title in, and interest in and to the sites until CCTMO LLC exercises the option, if at all. Additionally, a subsidiary of T-Mobile would continue to maintain its communications facilities (including modifications) on the sites as part of a separate agreement with Crown. However, pursuant to Section 12 of the Lease, Lessor's Site and Lease will only become subject to the master prepaid lease upon Lessor's consent. This letter asks that you please arrange for Lessor to confirm its consent to the master prepaid lease, as it relates to the Lease, by having Lessor sign this letter and return it to me via email. While we await Lessor's consent, T-Mobile has contracted with Crown to manage the Site and perform certain obligations of the Lease. I hope that the information herein has clarified the transaction. If you have any questions about this request, please e-mail me immediately at Kellv.Dunham@t-mobile.com or call (425) 383-7223. /Sincerely,) Kelly Dunham Contract Attorney Tower Project PG70554-R4 Acknowledged and Consented: By: Authorized Signatory Print Name: Date: