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<br />______________________________________________________________________________ <br /> <br />Page 2 of 2 <br />While the lump sum offer may appear attractive, granting a perpetual easement on the <br />property poses significant long-term risks due to the many unknowns that the future may bring. <br />Most importantly, the water towers are distribution system assets, so granting a perpetual <br />easement, which may limit future options, is very dangerous. <br />Similarly, it is unwise to renegotiate any of the current lease agreements since the proposed <br />terms offer a lower escalator and a lower annual rent. To illustrate this point, the table below <br />lists the reduction in revenue if the proposed lease terms were used throughout the remainder <br />of the current lease periods. Additionally, while the longer duration of the proposed terms may <br />seem promising, there is nothing preventing Verizon from requesting additional reductions to <br />the lease agreements at some point in the future. <br />Tower Expires Existing Lease <br />Future Payments <br />Proposed Lease <br />Future Payments <br />Reduction in <br />Revenue <br />Auburn 2041 $1,106,346 $566,501 $539,845 <br />Gary 2039 $798,603 $494,508 $304,095 <br />Johnson 2039 $798,603 $468,534 $330,069 <br />Staff are presenting Verizon’s offers to maintain transparency with the Commission and our <br />customers but recommend against accepting them. If the Commission is interested in pursuing <br />any of Verizon’s offers, staff will engage with Verizon in pursuit of the desired option(s). The <br />results of any negotiated terms would be presented at a future commission meeting. <br /> <br />ATTACHMENTS: <br />• Verizon’s offer for Auburn Street Tower, Site ID 162187 <br />• Verizon’s offer for Gary Street Tower, Site ID 123107 <br />• Verizon’s offer for Johnson Street Tower, Site ID 123332 <br />