15 - Conveyance of Tower Lease with Suddenlink on 9.1 acre tract to American Spiralweld Pipe

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Item No. 15 TO: Mayor & City Council Grayson Path, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: TELECOMMUNICATIONS TOWER LEASE WITH SUDDENLINK/ALTICE ON 9.1 ACRE TRACT TO BE CONVEYED TO AMERICAN SPIRALWELD PIPE COMPANY UNDER 2018 MASTER ECONOMIC DEVELOPMENT AGREENET DATE: July 7, 2020 BACKGROUND: The city has owned, for several decades, an approximately 9.1 acre tract located west of 19th St. NW, a tract once referred to as the Legion Airport properties. In 2005, the city leased this tract to Cox Southwest Holdings, L.P. for the site of a telecommunications tower. The lease was amended in February, 2006 and assigned from Cox Southwest Holdings, L.P. to Cebridge Acquisitions Co., LLC in March of that same year. The cable television tower erected on the site was operated by Suddenlink cable company, which in turn has been acquired by Altice. The lease was for ten years subject to 4 additional renewal terms of 5 years each. The second such renewal term expires on September 30, 2020. The tract was the city's contribution, along with a tax abatement, to the economic development package offered to American SpiralWeld Pipe Company ("ASWP") in 2018, and it is included in the Master Economic Development Agreement to be conveyed subject to the lease. As the lease covers the entire tract, rather than the area immediately around the tower, the lease has made it difficult for ASWP to use the tract, which they intend to use as a laydown yard. STATUS OF ISSUE: I began trying to contact Altice over a year ago to attempt to renegotiate the lease to cover the area around the tower only, with easements to and from the tower for access. Altice finally responded to my letter of June 3, 2019 in early 2020, and after discussing the issue over a period of months over which Altice was very unresponsive, Altice informs me that the tower was removed some time ago (which we have verified), and that they have no use for the property. The option to renew belongs to the city, but because they have no use for the property, Altice is not willing to renegotiate the lease, and the city has no means of compelling them to do so.