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15 - Conveyance of Tower Lease with Suddenlink on 9.1 acre tract to American Spiralweld PipeItem 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. At this point, in order to honor the spirit of the city's agreement with ASWP, and so that ASWP can have full use of the tract, the city's best option is to terminate the lease and require Suddenlink/Altice to remove any remaining equipment and structures from the site. BUDGET: The rental payments on the lease escalate slightly each year based on the Consumer Price Index. At this time, the rental rate is $7,826.64 per year. That is an increase of $1,826.64 over the original rent of $6000.00 in 2005. As there are two more potential 5 year terms, this would result in a loss of revenue of at least $78,266.00 spread out over the 10 year period. RECOMMENDATION: Authorize termination of the Amended Lease Agreement with Suddenlink/Altice regarding the 9.1 acre tract formerly known as the Legion Airport properties. 1 � .`;f..�lll.+I,I 'Y ♦ fl '� F � � t + *�; I rrl ; e � ++ I;[ ' . a. i 4 , I ."Ui I k ._ L�� «.fi s r4�: l., • 1 1 L1 .-#a k I ^I J A i r• 'J i (" 1'.1 wi 17rt; .♦ MI.J: e s I+t I;1 :11'414►M+fl 1111 1;117: jJ f :.If :rw �:I 11.-! ;:. Ilt" 77,-g7711 4 1 F II1. 11 w/ 7 M f t mow'' :t«I'�I I =41r 4 .� ;111 I-- f..,l #.� al,, a r; ;l C40 RMs. �� � G ® ;'7 q 0 AMWIPlEARAGRUMM STATE OF TEXAS 0 This amended lease agmement (the -Lease- or the - made w' entereiy R by f between CITY OF PARJS, a i. M `+; e 1 Thate [easedpremises of the kF R h described k "OPof Lessor. Iwated pact of properties located West of North West 19th Street iq the Ci!X of Pa i ds, ' i M r. •R � r fr11= R � �, a R � w, c R rR •. +l R ; 1 The term of this Lease shalf be rr rive (5))x -am beginning Rthe I stday oWcto2065,ber. r ending on 1. day of +' r 2010. al�y renew'able thereafteron October date thereor, r"' fbur (4) a4ditionalr finally on the 3011 day of Seotember 2030. wirvided 1 s. i f sr f 1 T No - termination 4Lessee it Ssixty ) days advancedate InitialThe einnualrentdue and payableRLessor4Lessee.for the leaseof above uns a % ai Ria" w - RW I a m + r PMerLY and Premises ufltc the mid COX SOUTHWEST HOLDINGS. the tem ofyeais as stated herein, uponand conditions Six ThousetW'Dollars ($6,000-00) arutually, the first installment of Six ThousandDollgM (56,000.00) having been paid in'advance by said Lessee to Lc%sor. the -receipt of utich is hereby ackno-Aledged, and a like installmebt shall be due and 1payable on the JQ day of October, 2006 und! day of October f !„ to r; including day of October, 2029.- Provided however. cominencing on October 'I. 20D6, and annually thereafter on ewh anni%vrsary date of the Lean, the amount payable by the Lessor to the Lessee shall be f ftreflect changes4 Consumer i Dallas/Ft. Worth MeRroplex Reglion 6 Bureau of Labor Statistics for each contract year. For each )Var's adjustment. the CPl bw month used for cilculating each adjustment shall be shallMarch of said )var. 4. Lessee 3 toLessoror orderR'the City Clerk. in the City orparis.Lamar promptlyCounty. Texas, the above described and mentioned anntml payments when due strictly and f derault or delay. 5. Any buildings. installations orimprovemenis ofany kind orcharactermada and erected upon ` ]easedpmperlyfi premises byLessee shall beandremainproperty not attach! or• f A 4 ofrealtyand3 f byLessee removed at any timeprior tothe expiration orothertermination of *'Lesw shall ..-1 Snmy not assign / leased i 1. li premises or any pan thereofWithouthavinghad and obtained Body G`.. Pads. 7. Except as otherwise provided Lessee not or peirnit the use1 anypart of 2 thereofleased p6pedy prid P110mises fbr any purpose whamver other than the use incident .i ,,aintenanceOPerafl0I Of a communily Lesseeack,..f ixLessoris !«. ernmental entity, and theproperty the subjectorthis 1 Publicly 4 "Imed 'f f iCfW- As further considemdon fOr the Use'of said property, to COOPemtefullyduringofthis Lease.subjeattoreasonable logistical, regulatory, and e4neering considerations and limitatIOPA with the efTbrIs of Lewor and other entities to co-lome varlousantenna or, ofther'. • of Zohirig f 3 1 of of orother` ,a,s« r legislation, 10 M, , ize the pmueraflon orsuchtowers the City ofpa& Failure M ! •:ly ith this provision shall constitute material i 1w 4i ■ MLemee shall 9al I times keepthe leased property1 Premises f f ofweeds, IRIIYr A ! #- 1 r• 1 1 -- other condition of actioll Of TxW AroperwoccLirringon the leasedf agents,or ! andLessornot liable A a Ah 4 f #t « f k7 1 4 building. towff, or any other condition or tiie premises beinge improperly constructed. 2 qWnfained or beingor CC 149 out of repair,hereby and AgmingA hi f And save Lessor harmless from WI claiftls for AnY such damages or irguries; Lessee must at all tirnesduring the 1 f'. this Agreement.and any 9A thereor. keepand maintain in ftill force♦ef&vt apolicy or policies Ofinsurance, Providing at lent f R% Per Petsonand S500,000.001 r any single occurrence for b odilyftlury or deathand.$1 00,W0.00 ibr any single occurrence for injury to of destruction o r 1 ♦ f , •indemnl6ringthe Lem. officers. employees.# all Pe6ons for f all damages. personal ..iaiinjuriesf property 1 • sustained in 4 upon leased property, or any pan thereof. as the result of apats, servants or employees, f sliall -pay Premiums due thereon It is e.V-resslyprovided L:such insuranc*policy or Ii. olicies shall.1mme theLessor additional insured and shall contain a clause that the insurer will 1cancelordecrease without h Lessorthirty (30) daysnotice ♦ must 1 and !I by freputablew'•. f or companies. f Approval by- the City Attorney orthe Cityof Paris. Lessee or its insurance carrier or carriel-s &V -all offtris.or , sail City Clerk, actinent letterorcertificate N_ forcethntsuch insurance is In Rill and ♦ I f IL 1 f Lessee at any time dersult In any or the covenants. conditions, PMvislons and stipulations herein contained, this Agreement may be terminated at Lessors option and it I 4 i 4 4"NF f wM f 1 f , i property 1 andeffects thererrorn• hidice_ l 1 ai dluu�aa�eq�a.6 IL���� ����o��&� • I�du�� � .., r El �br the collection of �enta Is or otherwise. on pAnfid eye —6 *ig! ♦ as f 'e-"10118 htrcbY OxPresslYI' s by 12. A firit lien is hereby : I 1 ■retained Oil all Of Lissft*s Property and eflicts %slhich may be located up, 1 u Prefflimm to Lessor Lease Agreement by Lessee according to its fk* and teaor, effect andresdin& 13. 7bere shall be ,r t 1 over ofsuchpremises or anypart thereof expiration # Leon %V"thcut tht 04iress Wfitten sareernent of Lessor In advance dswh holdover. and at the rete specified by lessor. 14. It is specifically understood. agreed and stipulgled that this Lnw is made.. executed and entered « by panicsexpress, and intdrition that it shall , for 1 , 4 of distribution television4 to the residents of the City of Paris, IN WITNESS WHEREOF. Of Paris. IMuniclPalcorporation. t f these 1 by whority D1>re.soludon#1. 1 fdie CitvCouncil �knwmw-BJA a'wsc presents to be ewcuted by Its Preside . L k: a CITYOF d Y �o [ 00 0MarwWw Jwiice Ellis, 0ty Clerk, miunrdvd Leaw. Algreemw -'Page 5 FIV Oil .11 Secrelwy THE STATE OF TEXAS 4 COUNTYOFLAMAR M' m pX, ME, the undersigned authorltv. in and tbrsikid .4 .2ta I 1Lit-A 11114.1ilL �riljlltm FIR '(T4qlT*!lJr'q 1$1 lif-4,4111,971 LESSEE CIVEN UNDER MY -RAND AND SEAL OF OFFICE, this — day ombmaiy. zoori. S'" STATE OF TEXAS rl COUNTY OF SMITH BEFORE ME, the underflipied authority, on this ditypersonallyappLved President of Cox 2006. CIVEN UNDER MY HAND AND SEAL OF OFFICE, this day or.___ & "nulvel Lcaw Agrement -- Pap 6