By Hugh Odom
Self-storage owners with cell towers on their properties are being contacted by cell-tower companies to extend their lease or sell out its remainder. If the owner takes neither option, will the cell tower and existing lease be in jeopardy of relocation?
This relocation proclamation—a nice way of saying "threat"—is being used to get self-storage owners to enter agreements with terms that not only severely undervalue the site but are commonly structured in ways that can negatively impact the long-term value of an owner's property overall. How can you tell if a cell-tower company really has the power to relocate its equipment? The following are basic factors that will help you determine what a cell-tower company’s options really are.
Capital Invested in the Tower Site
The more a cell-tower company spent on a cell-tower site, the less likely it will vacate it. The money spent not only includes the funds to build the actual tower structure but any funds to build access roads, bring power to the site, and obtain the necessary local zoning and permitting for the tower, which is becoming more expensive. The more a cell-tower company has vested in a site, the better it is for you.
The old standby of cell-tower companies these days is to get a self-storage owner on the phone and say how ever-changing technology will make the cell tower on his property obsolete. In actuality, changing technology can be beneficial to self-storage owners in many ways.
If a cell-tower company elects to relocate a tower, especially one serving multiple wireless carriers, it will need an alternative location that can serve the wireless network of all its wireless tenants. This is no easy task and, more important, not something a wireless carrier like AT&T, Verizon, Sprint or T-Mobile likes to do. Even moving a quarter of a mile in any direction from the current site can be problematic.
Local Zoning and Permitting Restrictions
Cell-tower companies are finding it difficult to obtain the necessary zoning and permitting approvals they need to construct new tower facilities. Even when these approvals are available, the process is becoming more costly, both in time expended and expense incurred. A company will have a hard time garnering local consent for a new cell location based solely on the fact that it doesn’t want to pay a self-storage owner reasonable rental rates.
Cost to Relocate a Cell Tower
Ultimately, the relocation of a tower will usually come down to how much it will cost the cell-tower company to leave a site. It will weigh the cost of relocation against what it will have to pay you to remain on your property. Costs a cell-tower company can incur include:
- The construction expense for a new tower
- Necessary expenditures to migrate the wireless carriers to a new tower
- Removal of equipment from your property and the property's subsequent restoration
- The company’s internal expenses for the time involved in this unanticipated project
A company could spend hundreds of thousands of dollars to relocate a cell tower from your property to a site just down the street.
Self-storage owners should realize that every cell-tower site is different, and cell-tower companies continue to rely on an advantageous disparity of information between themselves and their landlords. Obtaining information related to your cell-tower lease is important, as is having representation familiar with the telecom industry.
Information and representation will not only assist you when interpreting the validity of a cell-tower company’s relocation claim, it will enable you to maximize the terms of any extension or lease-buyout offers. The extension or disposition of your cell-tower lease is a telecom transaction, not a real estate one. The cell-tower companies view it in this regard and so should you.
Hugh D. Odom is president of Vertical Consultants, a telecommunications-consulting firm currently working with approximately 1,2 00 self-storage facilities across North America to place telecommunications equipment and optimize existing leases. Mr. Odom has more than 15 years of legal and telecom experience, including representing AT&T as an attorney for more than 10 years. For more information, call 877.456.7552; visit www.vertical-consultants.com.