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HomeMy WebLinkAboutItem 13 - Amendment to Cell Tower Lease at Jerome Park Public Works Agency www.santa-ana.org/pw Item # 13 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report October 21, 2025 TOPIC: Amendment to Cell Tower Lease at Jerome Park AGENDA TITLE First Amendment to Lease Agreement with T-Mobile West LLC, as successor in interest to Royal Street Communications, LLC, for Communication Tower Facilities at Jerome Park (Non-General Fund) RECOMMENDED ACTION Authorize the City Manager to execute the first amendment to the lease agreement with T-Mobile West LLC as successor in interest to Royal Street Communications, LLC for communication tower facilities at Jerome Park located at 2115 W. McFadden Avenue with an estimated beginning date of December 10, 2025 through February 19, 2027 for total revenue, including all extensions, in the amount of $26,833 (Agreement No. A- 2025-XXX). GOVERNMENT CODE 484308 APPLIES: Yes DISCUSSION The City currently has 17 existing wireless telecommunications facility lease agreements for cell towers on City park properties. These agreements were made between 2001 and 2012 and vary in terms, conditions, and format. The cell tower program is managed by the Public Works Agency, Parks, Fleet, Facilities, and Refuse Services Division (PWA) who facilitates a standing meeting with a Cell Tower Steering Committee that includes PWA, Parks, Recreation, and Community Services, City Attorney's Office, and a consultant that has expertise in the field of wireless communication technology. Revenue generated from these leases fund park maintenance and improvements. PWA is responsible for managing agreements, site analysis, and identifying and addressing deferred maintenance needs. On January 3, 2006, City Council approved a consultant agreement with Telecom Partners Group, doing business as ATS Communications, to provide services in the field of wireless communication technology and negotiate leases for wireless cell towers on behalf of the City. ATS Communications successfully assisted the City in marketing and facilitating the development of cell towers on City owned parks property. Under the terms of the agreement, ATS Communications retains 20% of the revenues collected from each new cell tower lease, over the life of the lease, including any renewals or Amendment to Cell Tower Lease at Jerome Park October 7, 2025 Page 2 extensions. This is stated in Section 2 Compensation of said agreement: "If any Existing Lease is amended or modified after the Effective Date, where such modification results in the co- location of additional equipment or the inclusion of additional wireless providers at any existing site, Consultant shall receive twenty percent (20%) of the incremental lease revenue over the life of the lease attributable to such modification." On February 20, 2007, City Council approved a cell tower lease agreement with Royal Street Communications, LLC for a communications tower at Jerome Park. The lease was later assigned by Royal Street Communications to T-Mobile West, LLC. In January 2023, T-Mobile West, LLC notified the City of its intent to upgrade the equipment installed on the Jerome Park tower. The lease agreement allows upgrades provided that the equipment, cables, or antennas remain within the original physical parameters of the premises. Staff determined that the proposed upgrades (Exhibit 1) would exceed those parameters, and as a result, the City denied T-Mobile West, LLC's request. The proposed upgraded equipment footprint is about 10.7% larger than the existing. To allow for the upgrades, the City negotiated with T-Mobile West, LLC to increase the lease amount by a proportionate amount from $44,880 to $49,690 annually, an increase of$4,800 per year. The increase will become effective on the first day of the month following the date upon which a building permit for the improvements is issued by the City and will be subject to an annual rent escalation of 4%. The City will receive 80% of all revenues received from this amended cell tower lease agreement and ATS Communications will receive the remaining 20% as established under the terms and conditions of the City's agreement with ATS Communications, for the life of the lease through February 2032. Staff recommends approval of the amendment to the lease agreement with T-Mobile West, LLC (Exhibit 2). The amendment authorizes the proposed equipment upgrades and establishes the corresponding payment increase. Revenues from the lease will continue to be allocated exclusively to the maintenance and capital improvements of City Parks. ENVIRONMENTAL IMPACT There is no environmental impact associated with the action. FISCAL IMPACT The revenues received from this amendment will be deposited into the following account for the specified years. Amendment to Cell Tower Lease at Jerome Park October 7, 2025 Page 3 Fiscal Accounting Fund Accounting Unit, Amount Year Unit- Description Account Description Account # Amendment FY 25-26 05113002- Capital Outlay Miscellaneous Revenue, $2,240 (Dec-Jun) 57363 Fund Cell Tower Lease Agreement FY 26-27 05113002- Capital Outlay Miscellaneous Revenue, $2,535 (Jul-Feb) 57363 Fund Cell Tower Lease Agreement Optional One, 5-Year Extension FY 26-27 05113002- Capital Outlay Miscellaneous Revenue, $1,438 (Feb-Jun) 57363 Fund Cell Tower Lease Agreement FY 27-28 05113002- Capital Outlay Miscellaneous Revenue, $4,132 57363 Fund Cell Tower Lease Agreement FY 28-29 05113002- Capital Outlay Miscellaneous Revenue, $4,297 57363 Fund Cell Tower Lease Agreement FY 29-30 05113002- Capital Outlay Miscellaneous Revenue, $4,469 57363 Fund Cell Tower Lease Agreement FY 30-31 05113002- Capital Outlay Miscellaneous Revenue, $4,648 57363 Fund Cell Tower Lease Agreement FY 31-32 05113002- Capital Outlay Miscellaneous Revenue, $3,074 (Jul-Feb) 57363 Fund Cell Tower Lease Agreement TOTAL 1 $26,833 Funds will be appropriated exclusively for the maintenance and capital improvements at City Parks during the City's yearly budget process. EXHIBIT(S) 1. Equipment Upgrade Plans 2. First Amendment to Lease Agreement Submitted By: Rodolfo Rosas, P.E., Acting Executive Director— Public Works Agency Approved By: Alvaro Nunez, City Manager W� OQ o � o � oz H : w . a w � o Fz WOVW r. 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THIS FIRST AMENDMENT to the above-referenced lease agreement is entered into on October 21, 2025, by and between T-Mobile West LLC, a Delaware limited liability company C'LESSEE"), and the City of Santa Ana,a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (`LESSOR"). RECITALS. A. The City and Royal Street Communications, LLC ("Royal Street"), a Delaware limited Iiability company, entered into Lease Agreement No. A-2007-042 ("Agreement") dated February 20, 2007, for Royal Street's use of a portion of real property ("Premises'), commonly known as Jerome Park and located at 2115 W. McFadden Ave., Santa Ana,CA 92704, APN: 109-050-30("Property"), as further described in Exhibit A-1 of this First Amendment. B. By a letter dated,August 10,2016,the City received notification from LESSEE that it was a successor in interest to Royal Street for the site located at 2115 W. McFadden Ave., Santa Ana, CA 92704, upon which LESSEE operates wireless antenna facilities. C. The parties now wish to amend the Agreement to allow LESSEE to expand its use of the Premises. The Parties therefore agree: 1. Section 4A, RENT, is hereby amended to reflect: Beginning on the first (1st) day of the month following the date upon which a building permit for the improvements depicted in Exhibit B-1 of this First Amendment is issued by the City of Santa Ana, LESSEE's annual rent shall be increased by four-thousand,eight hundred and 00/100 dollars ($4,800.00)to be paid in equal monthly installments of four hundred and 00/100 dollars($400.00)per month on the first day of the month, in advance, to LESSOR or to such other person,firm or place as the LESSOR may,from time to time, designate in writing at least thirty (30)days in advance of any rental payment date. The increased rent, as specified in this Section, shall be subject to the annual rent increases described in Section 5 of the Agreement. 2. Section 10, USE, is hereby amendeol to reflect: In addition to the terms as referenced in the Agreement,the Agreement is hereby amended to grantLESSEE the use of the Premises as depicted in Exhibit B-1 of this First Amendment. 3. Except as modified by this First Amendment, all terms and conditions of the Agreement shall remain in full force and effect. Page 1 of 2 SIGNATURE PACE FOR FIRST AMENDMENT TO TEASE AGREEMENT BETWEEN THE. CITY OF SANTA ANA AND ROVAI, STREET COMMUNICATIONS, I,I,C REGARDING COMMUNICATION TOWER FACILITIES AT JEROME PARK IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Agreement on the date and year first written above. Jennifer L. Hall Alvaro Nunez City Clerk City Manager APPROVED AS TO FORM T-MOBILE WEST SONIA R. CARVALHO, City Attorney LLC DocuSigned by: (hwtR By. lk Br' n Salvatierra Name: Lowell Handy Deputy City Attorney Title: Director RECOMMENDED FOR APPROVAL Rodolfo Rosas o,tim„am,.,,,yo,o, aao Rodolfo Rosas, P.E. Acting Executive Director Public Works Agency Page 2 of 2 EXHIBIT A-1 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY APN: 109-050-30 All that certain real property located in the County of Orange, State of California, being more particularly described as follows: Lots 31 and 32 of Re-plat of Santa Ana Acres, in the City of Santa Ana, County of Orange, State of California, as shown on a map thereof recorded in Book 5, at Page 8 of Miscellaneous Maps, records of said Orange County. That certain portion of public street in the State of California, County of Orange, City of Santa Ana, shown as Center Street 30 feet wide on a map of Santa Ana Acres recorded in Book 5, Page 8 of Miscellaneous Maps of said Orange County, said portion bounded Southerly by the North line of McFadden Avenue, shown on said map as Fairview East Avenue, and bounded Northerly by the Westerly extension of the Northerly line of said Lot 32. Except therefrom the Easterly 30 feet of Lot 31 conveyed to the Orange County Flood Control District by deed recorded June 10, 1974 in Book 11167 Page 340 of Official Records. Assessor's Parcel Number 109-050-30 LESSOR INITIALS: LESSE>! INITIALS: 17 MITI I I I I I z -z z o :z z 68 8mo6 > ...... ..... 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