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Regular Agenda Item 4. A.

Regular BOS Meeting

Meeting Date:	06/05/2018
Submitted For:	Steve Sanders	Submitted By:	Betty Hurst, Contracts Administrator
Department:	Finance
Fiscal Year:	2018-2019	Budgeted?:	Yes
Contract Dates Begin & End:	06-05-18 to 06-04-23	Grant?:	No
Matching Requirement?:	No	Fund?:	New

Information

Request/Subject

Ground Lease Agreement with NCWPCS MPL - 24-Year Sites Tower Holdings LLC

Background Information

In 2009, Gila County entered into an Intergovernmental Agreement (IGA) with the Arizona Department of Transportation (ADOT) for the design of a bridge across Tonto Creek in Tonto Basin. As part of the design, Gila County had to acquire right-of-way once a location for the bridge had been established. One of the properties, the County needed to have a communication tower on it. The owner of the property had a rental agreement in place with the owner of the communication equipment and was receiving a monthly payment for the equipment. While the property was in escrow, the rental agreement expired. The owner decided not to renew the agreement knowing the property would belong to the County and let the County negotiate with the owner of the equipment. The County acquired the property on November 21, 2014. Since that time the owner of the equipment has continued to operate the equipment without the benefit of an agreement with the County. Soon after the County’s acquisition of the property, the Finance Director, at the time, began to negotiate with the owner of the communication equipment for a lease. Approximately eighteen months ago, Public Works and the County Attorney’s Office begin negotiating the lease agreement. An agreement has been reached and agreed to by both parties.

Evaluation

A Ground Lease Agreement for the communication equipment has been agreed to by both parties. The agreement calls for Lessee to pay back rent from January 1, 2015, to the signing date of the current agreement in the amount of six hundred forty-two dollars and 82 cents ($642.82) per month. The agreement also calls for a lease payment in the amount of Nineteen Thousand Eight Hundred and 00/100 Dollars ($19,800.00) per year to be paid in equal monthly installments of One Thousand Six Hundred Fifty and 00/100 Dollars ($1,650.00). On the first anniversary of the Commencement Date, and every year thereafter, (the “Adjustment Date”), the Rent shall increase based on the Consumer Price Index published by the Bureau of Labor and Statistics of the United States Department of Labor for all Urban Consumers, US City Average (“CPI-U”) indicator and shall be determined by dividing the CPI-U indicator published 3 months prior to the Adjustment Date by the CPI-U indicator published 1 year and 3 months prior to the Adjustment Date, and multiplying the resultant number by the monthly lease rental amount of the most recent past rent. In no event shall the increase in Rent calculated for any year be less than three percent (3%) or exceed five percent (5%) of the most recent rent rate.

Conclusion

It is in the best interest of all parties to allow the communication equipment to remain in place and let the County collect income from the placement of the equipment until such time the bridge will be built. A new location has been established. Once construction for the bridge begins, the communication equipment will be relocated to the new location at the owner’s expense.

Recommendation

Gila County Public Works recommends entering into a Ground Lease Agreement with NCWPCS MPL 24 - Year Sites Tower Holdings LLC.

Suggested Motion

Information/Discussion/Action to approve a Ground Lease Agreement with NCWPCS MPL 24 - Year Sites Tower Holdings LLC on a portion of Gila County Assessor's Parcel No. 201-06-007M. (Steve Sanders)

Attachments
Ground Lease Agreement
Memorandum of Ground Lease Agreement