Laserfiche WebLink
______________________________________________________________________________ <br /> <br />Page 1 of 2 <br /> <br /> <br /> <br /> <br /> <br />UTILITIES COMMISSION MEETING <br /> <br />TO: <br />ERMU Commission <br />FROM: <br />Mark Hanson - General Manager <br />MEETING DATE: <br />November 12, 2025 <br />AGENDA ITEM NUMBER: <br />5.11 <br />SUBJECT: <br />Verizon Water Tower Lease Agreements <br />ACTION REQUESTED: <br />None <br /> <br />BACKGROUND: <br />ERMU currently has four water tower attachment lease agreements with Verizon Wireless, LLC, <br />one on each of the four water towers. Two were executed in 2014 (Gary and Johnson towers), <br />one in 2016 (Auburn tower), and one in 2020 (Freeport tower). Each lease agreement had an <br />initial five-year term with four additional five-year renewal periods. All four lease agreements <br />started with first-year lease amounts of $30,000. The first three lease agreements include an <br />annual escalator of 4%. Freeport tower has a 2% escalator with a provision that if Verizon <br />removes their equipment from any of the other three towers the annual rent amount for the <br />Freeport tower shall increase by 20% of the then current lease amount. <br /> <br />DISCUSSION: <br />Staff have received multiple requests from Verizon representatives to either buy out our <br />current lease agreements for a lump sum amount or renegotiate the current lease terms to <br />lower both the annual rent payment and the annual escalator. The lump sum offer is also <br />contingent on granting a perpetual easement on the property (no end date). <br />Verizon states they are offering these options in lieu of potentially terminating the existing <br />lease agreements. According to Verizon, their current lease agreement costs on a national level <br />are not sustainable. The following table presents Verizon’s offers to date (no offer has been <br />made for the Freeport tower): <br />Tower Current <br />Lease Terms Expires Future <br />Payments <br />Lump <br />Sum Offer <br />New Lease <br />Terms Expires Future <br />Payments <br />Auburn $30,000/year <br />4% / year 2041 $1,106,346 $700,000 $30,000/year <br />15% / 5 years 2050 $1,011,357 <br />Gary $30,000/year <br />4% / year 2039 $798,603 $900,000 $33,600/year <br />15% / 5 years 2041 $583,380 <br />Johnson $30,000/year <br />4% / year 2039 $798,603 $745,000 $30,000/year <br />3% / year 2056 $1,427,262