The City of Sparks entered into a site lease agreement (A-2272) with McCaw Communications of Nevada, Inc., doing business as AT&T Wireless, on January 26, 1996.  The site lease agreement identifies the terms and conditions between the City of Sparks (Landlord) and McCaw Communications (Tenant) for the lease of approximately 700 square feet of real property owned by the City of Sparks at 1605 Victorian Avenue (Fire Station Number One) for the purposes of constructing, operating, and maintaining a communications tower and ancillary facilities on the leased property.  A summary of the terms and conditions included in the agreement is as follows:

Lease Term - Section B(2)(a) and (b)

The term of the original lease was for 5 years commencing on January 26, 1996.  The agreement included four (4) extensions of five (5) years each, all of which were exercised by the Tenant.  As such, the current agreement expired on January 31, 2021.

Rent - Section B(4)(a), (b), and (c)

In exchange for the use of the leased property, the Tenant is required to pay rent to the Landlord each month. The amount of the base rent was set at $600/month for the first year, $800/month at year six (6), and $1000/month at year ten (10).  The agreement includes annual rent increases in accordance with the Consumer Price Index (CPI). As of January 2021, the rent was $1,356.15 per month.

Improvements: Utilities and Access - Section B(6)(a), (b) and (c)

The Tenant has the right, at its expense, to install, construct, repair, and maintain the communications tower and ancillary facilities within the leased property.  All facilities and equipment are the exclusive property of the Tenant throughout the term of the lease.   The Tenant is required to separately meter the charges for the consumption of electricity and must pay all power costs.   The Landlord is required to provide the Tenant with ingress and egress from an open and improved road over and under the Landlord’s property to serve the leased property.  The Tenant is entitled to access to the leased property twenty-four (24) hours per day, seven (7) days per week without providing prior notice to the Landlord.

The agreement was administratively amended (Amendment #1 to A-2272) in May of 1997.  Amendment #1 changed the name of the Tenant from McCaw Communications of Nevada, Inc., to Reno Cellular Telephone Company.  It is unclear why an administrative amendment was executed to provide for a change in Tenant as Section B(21) of the agreement allows the agreement to run with the property and is binding on successors, personal representatives, and assigns.  The current Tenant under the agreement, as a successor in interest, is NCWPCS MPL 26-Year Sites Tower Holdings, LLC.

In May of 2017, the City was contacted by Crown Castle, agent for the Tenant.  Crown Castle requested that the City consider amending the lease agreement to provide a 30-year lease extension in six additional automatically renewing terms of five years each, an extension of the lease expiration date from January 31, 2021, to January 1, 2051.  Upon consideration of the request, staff concluded that such an extension of the lease term was not in the best interests of the City and declined the request to amend the agreement.  The primary concern of staff was the inability to predict the future needs for space at Fire Station Number One over the requested 30-year lease term.

The City was subsequently contacted by Crown Castle in March of 2020.  Crown Castle indicated they were working on finding a site for the relocation of the communication facility, but it was unlikely that the relocation and removal of the existing communication facility could be accomplished by the lease expiration date of January 31, 2021.  Given this constraint, Crown Castle inquired if the City would consider a short-term lease extension to allow time to successfully relocate the facility.  Staff considered the request and determined that a short-term extension of the lease could be in the City’s interest as no need for the leased property is identified in the 5-year Capital Improvement Plan.  

In October of 2020, Crown Castle was authorized by the Tenant to negotiate an amendment to the site lease agreement to provide a short-term extension of the lease term. Staff and Crown Castle negotiated amendment #2 to the site lease agreement, which was approved by the Tenant on January 19, 2021.  

If approved, amendment # 2 to site lease agreement A-2272 would effectuate the following significant modifications and additions to the existing agreement:

Lease Term (Section 2 of the amendment)

The term of term of the lease will allow the Tenant one additional five-year extension, commencing on February 1, 2021, and expiring on January 31, 2026.

Rent (Section 3 of the amendment)

On February 1, 2021, the monthly rent shall be $3,350.  The monthly rent shall continue to adjust annually based upon the Consumer Price Index through the term of the lease.

Improvements: Utilities: Access (Section 4 of the amendment)

As Fire Station Number 1 is a secure facility, Section 4 of the amendment strikes and replaces Section 6(c) of A-2272 and requires the Tenant to provide the City 48 hours' notice of any employee, contractor, vendor, or representative authorized by the Tenant requiring access to the leased property. Section 4 also provides procedures for emergency conditions where 48-hour notification is not possible. 

Obstruction of Property (Section 5 of the amendment)

Section 5 of amendment adds new language that restricts the employees, contractors, vendors or representatives of the Tenant from blocking, obstructing or interfering with the Landlords use of the property outside of the lease area.

Storage of Equipment and Materials (Section 6 of the amendment)

Section 6 of the amendment adds new language that restricts the employees, contractors, vendors or representatives authorized by the Tenant from storing materials or equipment within the property outside of the lease area. 

I move to approve amendment #2 to site lease agreement A-2272 between the City of Sparks and NCWPCS MPL 26-Year Sites Tower Holdings LLC.