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Approve a Ground Lease Agreement with Dish Network, LLC to install wireless telecommunication system on the cellular tower located at 1340 Virginia Street in Vallejo for a 5-year initial term commencing the earlier of the first day of the month following the installation or one (1) year from the Effective Date, with four successive 5-year options to extend the Agreement, for an initial rent of $2,750 per month with three percent annual increases; and Authorize the County Administrator or designee to execute the Ground Lease Agreement and any subsequent modifications or amendments, with County Counsel concurrence
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Department of General Services recommends that the Board of Supervisors:
1. Approve a Ground Lease Agreement with Dish Network, LLC to install wireless telecommunication system on the cellular tower located at 1340 Virginia Street in Vallejo for a 5-year initial term commencing the earlier of the first day of the month following the installation or one (1) year from the Effective Date, with four successive 5-year options to extend the Agreement, for an initial rent of $2,750 per month with three percent annual increases; and
2. Authorize the County Administrator or designee to execute the Ground Lease Agreement and any subsequent modifications or amendments, with County Counsel concurrence.
SUMMARY/DISCUSSION:
Dish Network, LLC, a Colorado limited liability company, approached the County about installing wireless telecommunication system, including antennas on the tower and related equipment (approximately 35 square feet) at the Cellular Equipment Building located at 1340 Virginia Street in Vallejo (Solano County parcel number 0057-140-010), as outlined in Exhibit B of the Ground Lease Agreement (Attachment A). The General Services Department assessed the request for feasibility and revenue potential, working with a consultant specializing in wireless cell site negotiations and rental rates to help develop favorable lease terms and conditions consistent with industry standards and current market conditions. The proposed system will improve local wireless coverage for County staff and the public using Dish Satellite services at the County’s Vallejo campus. The Ground Lease Agreement also grants unrestricted access to the cell tower fenced area for maintenance or repairs.
FINANCIAL IMPACT:
The initial term of the Ground Lease Agreement is for a 5-year period, starting on the earlier of the first day of the month following the installation or one (1) year from the Effective Date. The total rent for the initial 5-year term will be $175,201. The agreement also includes four successive 5-year extension options. The initial lease rate is $2,750 per month, with a 3% annual increase. Over the potential 25-year term, total County revenue from the lease would be $1,203,156. Revenue will be deposited into the General Services Department Budget Unit 1642 (Real Estate).
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2024/25 Working Budget.
ALTERNATIVES:
1. The Board may choose not to approve the ground lease agreement. This action is not recommended as the lease agreement will improve local wireless coverage in the County’s Vallejo campus and add revenue to the County.
2. The Board may choose to propose alternative terms and conditions for the ground lease agreement. This action is not recommended as it would require additional time and effort for negotiations, potentially resulting in a loss of revenue for the County.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed the ground lease agreement as to form.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION