Cell phone tower agreement denied

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At the Common Council meeting held last night, there was much discussion and confusion on the issue of the vacant land sale and leaseback agreement between the city of Kenosha and New Cingular Wireless PCS, for the property located at 1613 Washington Road.  There were three votes taken on this issue:  The first vote for a two-week deferral failed by a vote of 6 to 7.  The next vote to postpone indefinitely also failed by a vote of 5 to 8.  The third vote to approve, as presented, also failed by a very close margin (6 to 7).

Jeff LaBahn, community development director, informed the group that the last time this issue was on the agenda, it was deferred due to conditional use permit issues.  To read the report from the last Common Council meeting, click here:  “Common Council Defers Cell Tower.”  The twelve items that were brought up were addressed and clarified in a document that AT&T submitted yesterday.  Currently, the document is being reviewed by city staff, and LaBahn stated that he didn’t know the status of the document review currently.

Alderperson Anthony Nudo prepared a spreadsheet comparing AT&T’s lease with Wind Point which contained a lot of similarities with the lease agreement prepared for Kenosha; however, a few of the differences include:

                                                               Wind Point                 Kenosha

Height of Cell Tower                                       87 feet                      150 feet

Size of Land                                               986 sq. ft.                 2,184 sq. ft.

Required to Purchase?                                     No                            Yes

Lease Rate                                                $1,600/mo.                $1,850/mo.

Up-Front Payment                                       $10,000*                        No

_______________________________

* $5,000  of the non-refundable option money is applied against rent.

_______________________________

Nudo went on to point out that the Wind Point cost per linear foot is $278, and the Kenosha cost is $148.  Wind Point’s per square foot cost was $24.54, while Kenosha’s was $10.17 (less than half).  He also gave the co-locator cost per unit:  Wind Point’s was $12,100, while Kenosha’s was $7,400.  “In every way, Kenosha gets the short end of the stick.  It’s not a great deal.  At the end of the first term, we owe AT&T $32,000.”  Nudo stated that he was not in support of this agreement.  He stated that he’s not opposed to the concept, it’s just that the dollars don’t make sense.  If you’d like to review this worksheet for yourself, click here:  Lease Comparison.

Alderperson G. John Ruffolo wanted to know if AT&T was willing to negotiate.  Attorney Claude Krawczyk from Milwaukee was there to represent AT&T Wireless.  Mayor Keith Bosman stated that “we are not debating here.”

Alderperson Steve Bostrom stated that the cost of the property being sold to the city of Kenosha was $150,000, and he also stated that he thought that “this was grossly overvalued.”  He said that he was disappointed in the group that brought this agreement forward.

Alderperson Ray Misner stated that he was against the deferral and would be supporting a denial.  Here is where the two-week deferral vote was taken, which failed.

Alderperson Dave Bogdala said that he took the opportunity to drive by the property in question since the Finance Committee meeting scheduled for earlier in the evening was cancelled due to lack of a quorum.  Pictures were shown which portrayed the condition of the property (mattresses, car, boarded up windows, oak trees in the middle of a sledding hill and toboggan run with a ravine/creek at the bottom of the hill).

Krawczyk stated that they could offer the city of Kenosha the exact same deal that was drawn up with Wind Point if that’s what the council wanted.  Another model which was discussed was the SBA lease.  The monthly rental was $2,000 vs. the $1,850 with Wind Point.  Annual increases of 2% for the SBA lease vs. 3% over 25 years.  The value of the lease is higher.  We could get the same deal with SBA.  He stated, “We’re not trying to get special favors, or offer better terms for a lease.  If Kenosha wanted the Wind Point model or the SBA model, AT&T would agree.”

There was confusion as to whether or not AT&T was buying the land.  Alderperson Patrick Juliana questioned Mike Higgins, city assessor, on the tax value of the land.  Higgins was hesitant to give an answer, not having seen the property.  But, he did state that, because the property was land-locked, that “it probably was not worth a lot of money.”  Juliana was referencing the $324,781 Wind Point was receiving in property taxes over five years, and the $403,376 that Kenosha would receive.  He said, “This is ludicrous.  If the property is not utilized, we get $0.” Bostrom felt the property was ridiculously overpriced.  “The dollars and cents don’t make sense,” he said.

Alderperson Ted Ruffalo thanked Bostrom for clarifying.  Ruffalo stated that height and elevation was everything on a cell phone tower.  “There is a huge difference between an 87-foot tower and a 150-foot tower.”  He felt that this was not the place to negotiate, and he stated that he was disappointed in whomever negotiated this deal.  “That person did not do their due diligence.”

This is the point at which Alderperson Anthony Kennedy made a motion to postpone the issue indefinitely.

Additional items of discussion included the reasoning behind AT&T’s purchasing the land, the tower’s height requirements, and the profits to be realized by both the city and AT&T.

Alderperson Ray Misner stated that he was troubled by the whole arrangement as well.  “I’m probably the most pro-AT&T alderman there is, but the dollars aren’t adding up.”  The donation of the land to the city of Kenosha after AT&T purchases it from the current owners would be paid for with the rent abatement for 75 months.  Misner felt that AT&T needed the city more than the city needed AT&T, and he hoped that a better arrangement could be worked out.

Alderperson Michael Orth stated that the chart provided by Nudo doesn’t follow basic accounting principles, and he stated that he felt that there was a game being played with the numbers.  “After five years, we get two and one-half acres of parkland and five years of improved cell phone service for Kenosha.”  He felt that this deal was a better deal than the one which was reviewed 30 days ago.  He hoped for a vote tonight, but felt that it wouldn’t happen.  “We have a duty to provide infrastructure to the people of Kenosha.”

Shane Begley from Wireless Consulting, stated that at least one other cell phone company was interested, and that was Verizon Wireless.

Kennedy said that since he’s not an accountant, that he couldn’t read the chart, and that he didn’t understand it.  “But, at the end of the fifth year, it shows that Kenosha will owe AT&T $32,000.”  Krawczyk said that this was incorrect.  “The city doesn’t pay any money at any time.  Wind Point already owned the land.  Kenosha doesn’t own the land.”

Alderperson Rocco LaMacchia admonished the rest of his colleagues by saying, “Grow up.  Make a decision.  Take responsibility.”  Misner stated that it’s the Council’s job to review contracts.  He said, “All of us support improvements in service.  The citizens win.  The companies are in it to make a profit.  But, we must protect the citizens.  I hope AT&T is committed to Kenosha.  But, they must bring a good deal to the table.”

Ruffalo stated that “This is what happens when you mix politics and business.  Someone brings it forward, and then it’s shuffled on through.  Someone was supposed to negotiate a good deal, and that didn’t take place.  Not this document.  Yes, we need to expand better cell coverage, but not with this document.”

Then, the two votes were taken.  The first vote on the indefinite postponement failed, as did the motion to approve, as presented.

Apparently, there are other Kenosha sites that AT&T is looking at.

 

 

 

 

 

 

 

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