Fort Walton Beach Council agenda — 06-14-11 regular — reading text

Packet Pg. 25  8. 4 City Council of Fort Walton Beach FINANCE MEMORANDUM To: Robert T. Meams, City Manager From: Brandy Wunker, Finance Director Date: June 14, 2011 Verizon Lease Modification Background 1. 1. The City has a lease agreement with Verizon Wireless for a cellular tower located at the Golf Course. 1. 2. The current lease expires on June 17, 2012, and in all likelihood will not be renewed by Verizon Wireless in its current format. 1. 3. Verizon Wireless has proposed a modification of the terms for the current lease. If approved, these modifications will extend the term of the lease for five years and provide for an additional five 5 - year optional renewal periods. Discussion 2. 1. The proposed changes to the terms of the agreement are as follows: 2. 1. 1. New rent amount of $2, 050 per month, or $24, 600 per year 2. 1. 2. New rent escalator of 8. 00% every five ( 5) year term 2. 1. 3. Amended commencement date of August 1, 2011 2. 1. 4. Additional renewal terms of five 5 -year periods 2. 2. The current lease terms include annual rent of $33, 509 with an annual escalator equal to the change in the Consumer Price Index. 2. 3. The current lease terms included three 5 - year renewal periods and commenced on June 17, 2007. Although the first 5 -year renewal was exercised, Verizon is not expected to exercise any additional renewal periods under the current lease terms and conditions. 3. Financial Information 3. 1. Under the current lease, which will expire June 17, 2012, the City will receive approximately $ 56K for the remaining life of the lease. 3. 2. Under the proposed new terms, the City is guaranteed $ 123K over the new 5 -year term. 4. Recommendation 4. 1. Staff respectfully requests City Council accept the modified terns, as proposed by Verizon Wireless, and authorize the City Manager to execute the necessary documents. ATTACHMENTS: Verizon Proposal ( PDF) Verizon Analysis ( PDT) Verizon Wireless ( PDT) Packaf Pg. 29  a. 4 City Council of Fort Walton Beach FINANCE MEMORANDUM To: Robert T. Meares, City Manager From: Brandy Wunker, Finance Director Date: June 14, 2011 Subiecb Verizon Lease Modification SIGNATURE BLOCK Completed 05/ 25/ 2011 3: 59 PM Brandy Wunker Finance Completed 05/ 25/ 2011 3: 59 PM Completed 06/ 07/ 2011 1: 02 PM City Attorney Carole Jones Completed 06/ 07/ 2011 1: 13 PM Completed 06/ 07/ 20112: 28 PM City Manager City Council Pending Packet Pg. 30  uoge0g) pow aseal uozl : £ 6ZO jesodold uozllaA 4110bu oe» y N rd o- 6 T 8 9 2 I T V ova ycarleaee ' Er• rn / C a MAY 2 52011 -.' May 19, 2011 City Of Fort Walton Beach, ( FI) 107 MIRACLE STRIP PARKWAY SW Fort Walton Beach, Florida, 32548 Re: Communications Facility located at 1809 Lewis Turner Blvd, Fort Walton Beach, FL / Contract If 50]] 9 Dear Mr. Meares, As discussed during our telephone conversation, Mcl LLC is working with Verizon Wireless in connection with certain proposed modifications to your communications facility lease. These modifications will allow Verizon Wireless to meet current business requirements and enhance your communications facility' s value to the overall network. Recent industry developments are changing how Verizon Wireless operates. In the past, Verizon Wireless was primarily focused on rapidly building out its network in order to provide the best coverage. Today, while consumers are enjoying greater services and better coverage, operating costs continue to escalate. As a result, Verizon Wireless is re- evaluating and redesigning its network. Network engineers are determining which communications facilities can be removed from the active network in order to reduce expenses and streamline operations. Verizon Wireless would like to include this communications facility In its long -term portfolio under the following terms: New Rent Amount: $ 2, 050. 00 per Month New Rent Escalator: 8. 00% every five ( 5) year term ( next increase on 8/ 1/ 2016) Amendment Commencement Date: 8 / 1/ 2011 Additional Renewal Terms: Five ( 5) additional five (5) year renewal terms In exchange for the above modifications, Verizon Wireless will guarantee your rental income at an amount of 123, 000. 00forthe next60 months. Note: In order to maintain its long -term flexibility, Verizon Wireless will also require the addition of language, substantially in the form of the following: Expansion of Permitted Use Landlord hereby agrees that Tenant shall have the right, without the te, mnamem of obourrurg Landlord' s ronsenu, to intint •, supplement, replace, upgrade, expand or refurbish the equipment related to Tenant' s communications fadiq, ( the " Communications Facility" ), increase the number of antennas thereon or relocate the Communications Facility within the Premises. The foregoing proposal does not constitute a binding offer to amend the Agreement. No legal obligation is created by this letter or any other written or oral communications until an Amendment to the Lease is signed by both  uopeaglpoW asea- 1 uozuaA £ 6ZLi lesodoJd uozuaq luawyael;V q M N a Y aN WanM u- MaA J- f WO BVPan, aylny 10- 1 LP- uoP, eayw 6ZZb- OE9 -858 d 1099L' 66L' 8S8 w VL8LTF5C -RGR u lueilnsuo0 asea] I LPW uop, eeu OM! 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LEASE AGREEMENT BETWEEN THE CITY OF FORT WALTON BEACH AND VERIZON WIRELESS PERSONAL COMMUNICATIONS LP FOR USE OF PROPERTY TO INSTALL WIRELESS COMMUNICATION SERVICE FACILITIES FORT WALTON BEACH GOLF CLUB) THIS LEASE AGREEMMENT ( the " Agreement "), made and entered into the lyo- day of =, 2002, by and between: 2wo, , CITY OF FORT WALTON BEACH, FLORIDA a municipal corporation 107 Miracle Strip Parkway SW Fort Walton Beach, FL 32548 hereinafter referred to as " CITY ") MOM Verizon Wireless Personal Communications LP ) d/ b /a Verizon Wireless / 180 Washington Valley Road Bedminster, NJ 07921 hereinafter referred to as " TENANT ") In consideration of mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: Section 1. REAL PROPERTY TO BE LEASED 1. 01 CITY hereby leases to TENANT that