A Wireless Lease Should be for a Static Set of Improvements, Not a Constantly Changing Development

If the water agency examines its wireless leases, it may find that the improvements are characterized by:

·       A set of plans, often labeled as Exhibit A, Exhibit B, and/or Exhibit C.

·       Verbal descriptions, such as “12 antennas, an equipment shelter,” etc.

When these characterizations no longer represent the cell site on a given property, the lease may no longer be valid, depending on other provisions of the lease.

The nature of personal wireless services is to constantly “improve.”  Improvements may not be normal maintenance, but a change in the development of the site.  When the development of a site changes, the lease should change.  To illustrate, a shopping center developer leases space to a tenant. When the tenant “improves” or redevelops the site, the tenant usually must have signed approval from the landlord, even when the tenant pays for the improvements.

Some wireless carriers will say that the lease confers unrestricted rights to:

·       Come and go as they please.

·       Change or add or subtract their initial improvements.

PlanWireless doesn’t believe that leases should confer unrestricted “rights,” and increasingly we are helping public agencies clarify their leases so that one of three results is achieved:

·       That the lease is complied with.

·       The wireless tenant agrees to new terms, including an increased lease rate.

·       The wireless tenant moves.

Many public agencies do not want to confront an errant tenant, even when issues of security and vulnerability are breached.  However there is always a defining moment when even the patience of a tolerant public agency engineer is tested:

·       One city called us because the tower owner (not even a carrier) didn’t have keys to the water reservoir area and subsequently severed the lock with a bolt cutter.

·       A water agency said “wait for us to determine if the lease permits the changes before you make changes.”  The wireless company went and made the changes anyway.

·       Many water agencies call us to ask what they should do when they have carriers on their water tanks with whom they have no lease.

There are ways to deal with these problems.  The remainder of this article offers some of Kreines & Kreines, Inc.’s experience.

Most Leases Depend on Local Government Approvals

Many water providers are in different departments than planning, zoning and building.  Some water agencies are not even part of a local government and are under the control of a different governing body.  Leases for wireless sites usually include a requirement that the wireless carriers will obtain all permits, licenses, approvals and comply with regulations of the federal, state and local government.  However, many wireless carriers neither seek nor obtain required local government permits.

Perhaps the wireless company confuses 1) a lease from a public water agency with 2) permits from a local government.  But these are not the same thing.  A lease is a proprietary document and zoning is a regulatory tool.  A school district, for example, can enter into a valid lease with a wireless carrier that limits radio frequency radiation (RFR).  But, the local government, within which the school district is located, cannot regulate RFR by zoning or any other tool.

The defining moment for the wireless carrier, when faced with the fact that local government permits have not been obtained, is to say “OK, then we’ll go out and get those approvals.”  Kreines & Kreines, Inc. thinks there are better ways to enforce local government approvals when required by a lease.

Any Lease Entered Into in the 20th Century is Almost Surely Obsolete

Because a cell site changes so often, any lease entered into in the 1990s (or earlier) is almost certainly not representative of what the cell site looks like today.  The wireless industry may claim that all those changes were just “maintenance,” but the real questions are:

·       Did the carrier obtain local government approval when the lease was first entered into?  If not, Kreines & Kreines, Inc. can apply for approval for the carrier by acting as a representative of the landlord.  That establishes a baseline.

·       Have the numerous changes also been approved by the local government?

By this method, it is easy to see that local government approvals may not match what has happened on the site.  Once that disparity is seen, negotiations for a better lease agreement may follow.

Prediction: the Problem is Getting Worse for the Wireless Industry

Leases for wireless facilities are usually long-term (20 to 30 years).  The wireless industry may have made the assumption that, as lease payments were made and a nominal rent escalator resulted in increased lease rates, the public water agencies would learn to love their “found” money.

But even the wireless industry failed to realize in 1990 all of the upgrades, change-outs and modifications that would be required to deliver music, digital images and streaming TV to almost 200 million cell phones.  The industry is constantly changing its horseless carriage into a hybrid vehicle, thinking all the while that the same lease applies.

No one foresaw September 11 and the changes it has yet to fully realize. The idea that a group of commercial employees can work around a public water supply, bringing things in and taking things out, virtually with impunity, will sit less and less well with public employees.

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Kreines & Kreines, Inc.
58 Paseo Mirasol, Tiburon, CA 94920
Phone: (415) 435-9214
Fax: (415) 435-1522
e-mail: mail@planwireless.com