Item 3 - PH/Ord. on Cell Towers - Laserfiche WebLink

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TELECO~CATIONS LEASES. TELECOMMUNICATIONS LEASES Reprinted from Real Estate Finance Review, Winter 1997. by Jeffrey A. Moerdler, Member, Communications and Real Estate Sections, and David E. Bronston continued... · Creditworthiness of the Tenant Many of the large telecommunications companies now leasing these types of spaces are well- known and well capitalized, such as the "baby bells," Sprint and MCI; however, this field is developing so quickly that many of the new players are smaller companies withoUt significant track records and with most of their balance sheets invested in new equipment which is not yet generating cash flow. The landlord or lender must carefully analyze the creditworthiness of the t nant, its track record and its future stability in order to maximize the financeabilitY of these leases. Desirability of Use *' Early on in the process of leasing space to telecommunications tenant, the landlord must seriously consider whether this type of use is one thatwill be advantageous for the Property beyond the monetary impact of the rental income on the property's bottom line. One 'must also look at whether or not adding this type of use will have an adverse affect on the value of the property and the leaseability of other space at the property. For example, adding rooftop antennas visible from the street on the roof of a shopping centers will have a negative impact on the marketability of th property to future tenants who are always concemed with the image the Property conveys to passersby. On the other hand, the existence of rooftop antennas on the top of a forty story office building would have no adverse affect, whatsoever on the property. Environmental Concerns With the exception of large antenna towers,, all of the new technologies discussed above operate at very Iow power, generally 10-100 watts. They are not believed' to have any adverse health or environmental impact. There is, however, a significant psychological impact to these installations. Residents of apartment houses have recently been very vocal in their objections to the installation of rooftop antennas and communications closets with the properties where they reside. While th re app ars to be no definitive evidence of any adverse health or environmental impact resulting from these facilities, they do have a psychological impact and can reduce the marketability of the property in the same way that union picketing reduces the value of the stock in large companies involved in hostile labor negotiations. Larger antenna towers do, however, have serious potential health and environmental impacts at close range and various government regulations require fences, signage and other mechanisms to prevent One from injury.' Electricity and Other Utilities The availability of sufficient electricity and other utilities for any facility leased to a telecommunications company must be explored in advance. Generally, telecommunications companies will hire their own experts to evaluate a property under consideration and this will disclose any deficiencies early' on in the process. They will generally not require representations from landlords and, if necessary, will frequently add additional capacity to the building system where needed for their use at their own expense. Nonetheless, a landlord must be concerned with their usage requirements and. must be certain that they will not detract from the utility services available to other present and future tenants and that the tenant will pay all costs associated with their own usage. What Will the Future Bring? One need only look back five years to see how quickly telecommunications technology has http://emmetwork.org/siting/telecomleases.htm ~v-ll~