REPORT TO THE CITY COUNCIL
FROM: BRIAN BARR, Director
General Services Department
AARON AGUIRRE, Director
PARCS Department
BY: DESIREE NARANJO, Property Specialist II
General Services Department
SUBJECT
Title
Actions pertaining to the License Agreement for City-owned property at Romain Park (District 7):
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 Class 1 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines
2. Approve the License Agreement between the City of Fresno and New Cingular Wireless PCS LLC, to license use of certain real property, together with access to construct, install, maintain, and operate a seventy-foot communications tower, antenna, and attendant building located at Romain Park at 745 N First Street for an initial term of four years that will automatically extend for five successive four year periods and a total contract revenue of $1,070,449
Body
RECOMMENDATION
Staff recommends the Council adopt a finding of Categorial Exemption pursuant to Section 15301 Class 1, approve the License Agreement between the City of Fresno, through the PARCS Department and New Cingular Wireless PCS, LLC, for use of City property at Romain Park at 745 N First Street. The License Agreement will allow the City to license premises at Romain Park to New Cingular Wireless for the purpose of constructing, installing, maintaining, and operating communications equipment. The agreement will be for an initial term of four years and automatically extend for five successive four-year periods, and a total contract revenue of $1,070,449.
EXECUTIVE SUMMARY
The current License between the City of Fresno and New Cingular Wireless PCS, LLC, expired on March 25, 2020, however New Cingular Wireless PCS has continued to make regular license payments in good faith; the City and Licensee mutually agree to enter into a new License Agreement. The License Agreement will start upon the execution of the agreement, with annual revenue of $30,000. The initial term is four years with five successive four-year extensions, expiring thereafter, for a total contract revenue including base rent, signing bonus, and escalations of $1,070,449 over 24 years. The revenue escalation is 15% every four years, plus a one-time $20,000 non-refundable Conditional Signing Bonus paid to the City. This Agreement is terminable with a 10-day notice of termination upon an event of default by the Licensee after the cure period has elapsed.
BACKGROUND
The City of Fresno and AT&T Wireless Services of California, Inc. dba AT&T Wireless Services entered into a License Agreement dated March 26, 1999, for use of the property at Romain Park for the sole purpose of constructing, installing, maintaining, and operating a seventy-foot communications tower, antenna, and attendant building. New Cingular Wireless PCS, LLC, a Delaware limited liability company, formerly known as AT&T Wireless Services of California, Inc., is currently the licensee under the License as successor in interest to the Original Licensee. The License had an original term that commenced on March 26, 1999. However, the License provided for six successive three-year extensions, all of which were exercised by Licensee resulting in the License expiring on March 25, 2020. Lease payments of $10,116.03 were made in good faith each year after the expiration until current.
The proposed License Agreement has an initial term of four years with five successive four-year extensions. The Licensee will pay rent in the amount of $30,000 annually plus a one-time Conditional Signing Bonus of $20,000 within 60 days of the effective date of the License Agreement. The License provides for a rent escalation of 15% every four years commencing on July 17, 2029. The total anticipated revenue including base rent, signing bonus, and escalations is $1,070,449 over 24 years.
These terms are similar to the original License Agreement from March 26, 1999 that had an initial annual revenue of $6,000 with a rent escalation of 15% every three years. This agreement also includes an expansion option of up to 400 sf, exercisable at any time throughout the license, requiring City approval of location. This option is consistent with the original License Agreement.
The City Attorney has approved this License Agreement as to form.
ENVIRONMENTAL FINDING
Staff has performed a preliminary environmental assessment of this project and has determined that this project falls within the Categorical Exemption set forth in CEQA Guidelines Section 15301/Class 1 (existing facilities), which exempts projects involving a negligible or no expansion of an existing facility. This exemption applies because the project involves the licensing of an existing cell phone tower located on public property. Staff determined under the CEQA Guidelines this project fits within the definition of existing facilities in Section 15301/Class 1 as Categorically Exempt from further CEQA review. Staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project.
LOCAL PREFERENCE
Local preference is not applicable. The City is not issuing a Request for Proposals for this License Agreement.
FISCAL IMPACT
This will add revenue to the General Fund as a result of approving this Agreement. Revenue generated from this agreement will be deposited into the PARCS General Fund account.
Attachment:
License Agreement