1 Appomattox Town Council
Workshop Meeting January 28, 2014
The Appomattox Town Council held a Workshop Council meeting on Tuesday, January 28, 2014 at 7:00 p.m. at the Appomattox Municipal Building, 210 Linden Street, Appomattox, Virginia with Mayor Harvey presiding.
Members present: Timothy W. Garrett, C. Lewis McDearmon, Jr., Mary Lou Spiggle, N. H. “Jimmy” Mayberry, Steven T. Conner, and Claudia G. Puckette.
Others: Katrina Koetring, News & Advance; Stephanie James, Times Virginian; Bobby Wingfield, Stacey Wilkes, Town Treasurer; Bill Gillespie, Jr., Town Manager, and Roxanne W. Casto, Town Clerk.
Mayor Harvey called the meeting to order and welcomed the visitors.
Mr. Gillespie presented through graphic displays the lease agreement process for the cell tower sites. There are two (2) leases at the 1,000,000 gallon water tank, specifically US Cellular and American Tower (Verizon).
US Cellular owns the tower and the Town owns the land. American Tower owns the Verizon tower and the Town owns the land. US Cellular as 2 antennas, one for US Cellular and one for Public Safety (Appomattox County). Again, the Tower belongs to the US Cellular and the land on which it sits belongs to the Town of Appomattox. The current lease expires in 2025. If US Cellular added another tenant this would enable the Town to collect 50% of the rent collected by US Cellular of the new tenant.
American Tower owns the tower on which Verizon is located. The lease does not expire until 2032. They do not have to ask permission to add another antenna.
There are two (2) other leases on the 100,000 gallon water tank, specifically Ntelos and T- Mobile. The Ntelos lease expires in 2020 and is for antennas located on the Town’s water tank. The T-Mobile lease expires in 2039 and is also for antennas located on the Town’s water tank.
A lengthy discussion was then prompted by a question and answer session:
Mr. Conner asked what happens if the 100,000 gallon tank disappears?
Mr. Gillespie responded – disappears?
Mr. Conner – yeah or we moved it?
Mr. Gillespie – no tower there?
Mr. Conner – in other words – no tower there? What’s our obligation to those people?
Mr. Gillespie – I don’t know – that’s not covered in the lease.
2 Appomattox Town Council
Workshop Meeting January 28, 2014
Mr. Garrett – Can they keep us from taking the tank down?
Mr. Gillespie – No – if the tanks not there. You don’t have an obligation to them no more than they do to you. If you decide you want to take the tank down – are you saying they would tell you – you can’t take it down? It’s a public facility. Do you want to take it down?
Mr. Conner – No, I am just saying if the Health Department says this tank isn’t usable for the Town. What obligation do we have to these people on this lease?
Mr. Gillespie – I don’t know – it’s a public facility. AP Wireless is only buying the rents. They have presented several options to pay you for those rents.
Mayor Harvey – aren’t the options included in the rates – preventing us from re-negotiating until the lease fully expires?
Mr. Gillespie - All property rights would be retained by the Town. Public Safety equipment would be addressed in the contract and remain there in perpetuity.
Mr. Conner – Don’t we have to work that out with US Cellular not AP Wireless.
Mr. Gillespie – No, all you are doing is selling the rents. You put all this in the contract. You want to make sure that none of this is assumed.
Mr. Conner – We would have to get US Cellular to agree not just AP Wireless.
Mr. Gillespie – US Cellular says that they can put the Public Safety on there, right?
Mr. Conner – I don’t know – that’s why I am asking. What are the incentives to the County?
Mr. Gillespie – None that I know of.
Mr. Bobby Wingfield (from the audience) advised Council that there are 4 connectors on the US Cellular tower, spaced out. Public safety and the school system share it right now
Mr. Gillespie – that agreement stays with the Town and US Cellular.
Mr. Conner – But then you sell the leases.
Mr. Gillespie – No, that’s the problem we are getting into – we are not selling the lease. We are selling the rents. The leases are still yours.
Mr. Conner – 50 years? Why can’t we sell them for the remaining portion of the leases/rent? 11 years, 6 years, etc.?
3 Appomattox Town Council
Workshop Meeting January 28, 2014
Mr. Gillespie – You could but you’d get less money.
Mr. Conner – Rather than tie it up for 50 years. You’d have it tied up for less time.
Mr. Gillespie – You signed leases for long periods of time before. This isn’t the first time this has come up.
Mr. Conner – These leases were not negotiated property and not at the rates they should have been.
Mr. Gillespie - You can go in when they are re-negotiated and not give renewing terms. At the end of the current lease amount you will get the difference 100% from your current vendors. The rent and lease are two different things.
Mayor Harvey – explain what you are missing Steve.
Mr. Conner - Why would AP Wireless buy it for 50 years? Why not just buy it for 11 years?
Mr. Gillespie – They will buy it for 2 years if you want them too. But we are talking about $1,001,000 vs. $20,000 – That’s where I see the difference. This has been going on for a long time.
Mr. Gillespie – I have trouble understanding whether its 50 years or 100 years as long as I have the mechanism to negotiate the points what difference does it make if its 200 years?
Mr. Conner – Can the companies with the leases protest any increase or proposal when their lease is up because they are now locked in with AP Wireless for 50 years? What makes US Cellular have to have a new lease?
Mr. Gillespie – AP Wireless is buying the rent.
Mr. Mayberry – The lease is for the tower alone. The rent is for what goes on the tower.
Mr. Conner – I understand that.
Mrs. Casto – No, the rent is for the land.
Mr. Conner – Right, the rent is for the Tower.
Mr. Mayberry – It’s our land.
Mr. Gillespie – These are tow you have locked in because you own the land.
Mr. Conner – That’s right.
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Workshop Meeting January 28, 2014
Mr. Gillespie – I don’t know what else to tell you. You will have all the flexibility you would need and have still had. Plus, you have a cash proposal to do other things.
Any questions? None
Mrs. Puckette – I think when you put this in perspective all of these leases have been extremely long term in my mind. I come from a Real Estate background and I tend to think 1 or 5 years…this seems longer. In the beginning that really bothered me, but we still are only going to sell our income or lease our income and not anything else. Am I correct?
Mr. Gillespie – Explained the Verizon commercial – That’s the game these guys are playing – They are trying to make their portfolio larger. They can use this as a marketing tool & put new people anywhere you want to go.
Mrs. Puckette – We are not losing anything, we are just taking our rent upfront, correct?
Mr. Gillespie – You only have 1 of those leases that are coming due in 6 years.
Mr. Conner – I understand what you’re saying now but I don’t read their proposal that way.
Mr. McDearmon – And what do they propose paying?
Mr. Gillespie - $1,001,000.
Mr. Conner – is that a lump sum?
Mr. Gillespie – No, the lump sum is $850,000. The 5 year option is $1,001,000. I am going to pick up where we left off at the committee meeting. I would suggest you take the 5 year option because you are going to end up spreading these projects over time. You’ve got the time. At least you’ve got the Capital Improvement cash mechanism.
Ms. Spiggle – So tell me what you’re getting each year?
Mr. Gillespie - $91,000 in 11 payments over 5 years = $1,001,000.
Mr. Conner – and the current rent roll is $80,000/year?
Mr. Gillespie – No, it’s $60,000. You’ve lost $26,000.
Mr. Conner – Let me ask you a question – If we don’t take it lump sum and another customer pulls out in 5 years – are we out of that money too?
Mr. Gillespie – No, that doesn’t have anything to do with you.
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Workshop Meeting January 28, 2014
Mr. Conner – What’s the return on investment Ms. Wilkes? Taking the lump sum vs. payments?
Ms. Wilkes – I believe I would have to calculate that Mr. Conner – I do not have that information off the top of my head.
Mr. Garrett – What would the proposal be if US Cellular wasn’t in there?
Mr. Gillespie – I don’t know because when the RFP was made available it was included. And we did get a 2 week extension, the deadline is tomorrow.
Ms. Puckette – If we don’t do it we won’t have a way to fund our projects. While this may not be the best proposal I’ve seen in my real estate time it is a means to an end. Our choices come to “do nothing” and run the risk of losing towers or accept some funding to make things happen. Things we have come here to do. It is a difficult decision when you think about leasing something for so many years but this is the way they do business. But, if do not take this money now and move forward – it’s been almost 2 years here not – planning and trying to move forward and make some things happen. Then we have wasted all this and will not have done for our citizens what we told them we would do. So is the best option in the world? Probably not. Is it the option we have – yes. I think after much thought that the only way for us to get the seed money we need to do our economic growth and development. If we don’t we will have set ourselves back even further. It’s time for us to do something.
Ms. Spiggle – Well said.
This concluded the discussion.
Councilmember Mayberry made a motion, seconded by Councilmember Puckette to accept the proposal by AP Wireless for the purchase of the rents for the Town’s four cell sites. Councilmember Mayberry also moved that the Mayor and Finance Committee Chairman enter into negotiations with AP Wireless in order to develop a contract which the Mayor would be authorized to sign on behalf of the Town. Roll Call Vote – Ayes – McDearmon, Spiggle, Mayberry, Puckette Noes – Garrett, Conner Motion carries 4-2.
Mr. Garrett asked that before anything is signed that our attorney’s make sure that the 911 and schools will not be harmed. I can see it being lost.
Mayor Harvey assured Mr. Garrett that Mr. Wright (Town Attorney) would review everything.
Mr. Conner – And we will make sure that we are just selling rents? Our present rent.
Mr. Harvey – yes, that’s already in the proposal.
6 Appomattox Town Council
Workshop Meeting January 28, 2014
Mr. Conner – But that isn’t what was in writing.
Mr. Gillespie & Mr. Harvey – yes it is.
Mr. Conner – Okay
Committee Updates-
Finance & Planning: Mr. McDearmon reported that in their January committee meeting they heard from Jeff Elder, Facilities Manager concerning the purchase of a used dump truck and a mini excavator. After much searching he (Jeff) advised the committee that he could not find anything for the money council had set forth. So he (Jeff) wanted the committee to put the money set aside for the mini excavator towards the funds for the dump truck which they still haven’t gotten any leads on. The committee discussed the payout options on the cell tower leases and the proposal for the cell tower leases. Lastly, the Committee discussed the Priorities and Initiatives for 2014 and beyond.
Physical Development Committee: Mr. Mayberry reported that the committee met this afternoon and Mr. Proctor Harvey and Mr. Dave Farley made a presentation on how to improve the Town with enhancements, particularly to enhance the corridors for tourists.
Staff Member Updates: Town Clerk – none Town Treasurer – none Town Manager – none
Council Concerns: None
On a motion by Councilmember Mayberry, seconded by Councilmember McDearmon, Council voted to adjourn at 7:35 p.m. All members present voting aye. Motion carried.
Roxanne W. Casto, MMC Clerk
Paul D. Harvey Mayor