HomeMy WebLinkAbout09.A- Council Office DOC ID: 1822 C
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Budget
From: Chas A. Kelley M/CC Meeting Date: 05/07/2012
Prepared by: Cheryl Weeks, (909)384-5188
Dept: Council Office Ward(s): All
Subject:
Funding Opportunities for the City of San Bernardino
Financial Impact:
None.
Motion: Direct the City Manager and City Finance Director to implement the cell phone
site monetization revenue proposal developed by the City's cell phone site
consultant,ATS Communications.
Synopsis of Previous Council Action:
None
Background:
At the April 3 and April 19, 2012 Budget Hearing meetings, staff reported that we have a budget
shortfall of approximately$3.8 million. As a result, staff has recommended budget cuts that will
result in a reduction in services to our residents.
We should consider all opportunities for revenue that will avoid further cuts. One option is to
implement the cell phone site monetization revenue proposal developed by the city's cell phone
site consultant, ATS Communications.
This could result in an additional$1.2 million to$1.5 million for our city's budget.
Supporting Documents:
#5 - 1822 Funding Opportnities 05-07-2012 M-CC (PDF)
Updated: 5/3/2012 by Georgeann"Gigi"Hanna C
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Mr. Charles E. McNeely
City Manager
City of San Bernardino
300 N. "D" Street
San Bernardino, CA 92418
May 1, 2012
RE: Proposal of Monetization Services r
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Dear Mr. McNeeley: 0
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In response to requests from Council members we have prepared the attached proposal to
manage the sale of City telecom leases.. We are sensitive to the City's time line and financial i
concerns regarding the current budget and are confident we can structure a transaction that
meets these goals. ATS has been very successful in delivering this type of service to our clients v
in the past, and we have extensive experience in bringing together these transactions quickly Y
with the best value for our clients. d
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The City currently collects over $19,000.00 in rents each month from a number of existing cell
tower leases on City property. There are several specialized financial entities that will provide a
lump sum payment now in exchange for these rents. The amount paid varies based on the
length of the contract (from 10 to 40+ years), the escalators in the leases (the higher the
escalator the more paid) and other rights purchased (such as receiving a percentage of future
tenants). On average, prices range from 65x monthly rents for a ten (10) year deal to 120x for a Y
forty (40) year deal. N
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In addition, ATS is working on several new leases which would replace revenue sold by San n
Bernardino: °
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We are confident that the transaction could be closed by June 30, 2012, assuming we have City
personnel cooperation throughout the process. 0
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ATS appreciates the opportunity to serve San Bernardino in an additional capacity. Attached o
please find the one page proposal, an information request checklist, and a simple contract c
amendment to authorize ATS for the work. °
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We have enjoyed working on leasing City property to the telecom carriers and see the N
opportunity to replace leases sold with new leases as a real "win-win" for all involved. Please
let us know if you have any questions or comments. We look forward to hearing from you and
getting started immediately.
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Sincerely, L
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Tonyingegneri
ATS Communications
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ATS Communications
22642 Lambert St.,Suite 401A Lake Forest,CA 92630 Phone:,(949)305-7848
Website www.atscomm.com
Packet Pg. 12413''
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PROPOSAL FOR SERVICES
Client: City of San Bernardino
Service Provider: ATS Communications r
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Services: Management of Sale of Telecom Leases o
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Scope of Services:
• Communicate with City personnel to understand goals and objectives. LL
• Evaluate all existing wireless communications facilities located on City
property. =
• Visit and photograph each site Y
• Determine issues that relate to increasing the potential value of each d
site for consideration by financial institutions. r
• Audit the existing wireless communications leases for City property.
• Ensure carriers are paying correct amount per the existing leases. N
• Ensure the carrier's installations are in compliance with the leases. n
• Identify any restrictive language that may affect the value of the lease.
• Identify any hidden value that may increase the potential value of the y
lease. N
• Make recommendations regarding the value of the leases N
• Identify those sites and leases with the highest potential value in a 4
lump sum transaction.
• Identify ways to increase value for the leases with lower value.
• Contact the wireless carriers if necessary to make improvements to the y
existing lease agreements to maximize sale value. o
• Manage the entire lease sale process. a
• Prepare a detailed package containing all the requisite information 0
regarding the leases, and sites.
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• Contact the various financial institutions to determine interest in
,'monetizing" certain leases in the City portfolio. a
• Negotiate the best possible terms for a lump sum transaction based on
industry standard terms, conditions and requirements.
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ATS Communications
22642 Lambert St.,Suite 401A Lake Forest,CA 92630 Phone:.(949) 305-7848
Website www.a=mm.com
Packet Pg.1249i
ATS
o Prepare an analysis of the various offerings from interested potential
buyers, identifying the benefits and attributes of each proposal.
o Present the analysis to the City, and make a recommendation as to the
best possible transaction directly tied to City goals.
o Assist City personnel in negotiating and completing the transaction
documentation and closing the transaction. °o
The City, in its sole discretion, may choose to monetize none, some o
or all of the existing leases. For this service, ATS will receive.
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Service Fee: 4 % of the gross sale proceeds, not to exceed $100,000.00 a
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Completion Due Date June 30, 2012, if not sooner
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ATS Communications
22642 Lambert St.,Suite 401A Lake Forest,CA 92630 Phone:,(949)305-7848
Website www.atscomm.mm
P$ckef Pg.7250.;
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TELECOM LEASE SALE INFORMATION REQUEST
Sites: D
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• Site name and address of all properties with existing telecom lease installations
Name and contact information of designated City personnel to coordinate site g
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Leases:
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Copy of the each fully executed signed lease ;
Copy of any lease amendment(s)
Copy of site drawings for each installation Y
Copies of rent payments for each lease for the last six months y
• Copies of carrier lease/rent commencement letters
• Financial records showing the evidence of the last escalation of each lease. ..
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Personnel:
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• General - Name(s)/Contact information and role descriptions for all decision
makers for the sale of the leases. N
• Legal - Name(s)/Contact information for all personnel involved in telecom leasing N
and negotiating the purchase agreement. o
• Accounting - Name(s)/contact information for all personnel involved in billing and o
collection of telecom rents. a
• Engineering - Name(s)/contact information for all personnel involved in reviewing r
carrier site plans. °o
• Other - Name(s)/contact information for any other personnel that would be o
involved in the transaction or closing process.
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ATS Communications
22642 lambert St.,Suite 401A take Forest,CA 92630 Phone:.(949) 305-7848
Website www atscomm.com
Paaket Pill; 1241 '
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Entered Into Rec. at MCC/CDC Mtg;
by; COMMUNICATIONS
Agenda Item No; CAPITAL GROUPLLC
by;
City CIerVCDC Secretary
City of SClAM er, Record#CA11MAR20127421
Has someone approached you about selling your cell lease agreement? Did you know that NAI Global is
the ONLY national commercial brokerage firm that specializes in educating landlords about cellular
leases? I manage NAI's national telecommunications team. We effectively service our client's inquiries
to sell their rooftop or tower site leases. Based on our experience there are many reasons to sell your
lease, but not unless you fully understand the nature of them. My team's expertise will guide you
toward the best course of action, providing unmatched expertise in the wireless industry and traditional
real estate in his or her market. If the decision to sell your lease makes sense NAI has teamed up with
Communications Capital Group as the conduit for the transaction.
We have affiliates in your region. Please give me a call at your earliest convenience to discuss your
lease(s) and arrange a face to face meeting.
Entered Int Q at MCC/CDC Mtg: �
by:
Alejandra Valenzuela q Lart - '� �
Agenda Item No:
Vice President
by;
City CIerVCDC Secretary
NA1 Global' City of San Bernardino
CALL US TOLL FREE 866-574-2355 or email: info(a)comcapgroup.com
A note about my firm and client:
NAI Global is the premier network of independent commercial real estate firms and one of the largest commercial
real estate service providers worldwide. C-111 Capital Partners LLC, the parent company of NAI Global, is a national
leader in real estate services and investment management. NAI Global manages a network of 5,000 professionals
and 350 offices in 55 countries throughout the world. NAI professionals work together with our global management
team to help our clients strategically optimize their real estate assets. NAI offices around the world completed over
$45 billion in transactions annually. We also manage over 300 million square feet of commercial space.
Communications Capital Group (CCG) is a wireless infrastructure investment company formed to build a selective
portfolio of cell site assets and at the same time, give landlords the opportunity to leverage their often undervalued
cellular revenue streams. We bring a transparent approach to landlords about our investment interests, and the
criteria we use to structure our transactions.
CCG is institutionally capitalized through private equity investments from Ulysses Management LLC(Ulysses)and
Tenth Avenue Partners(TAP)and debt financing from Macquarie Bank of Australia
www.rommpgroup.00m
866.574.2355 Toll-Free • 678.775.0361 Fax • 9755 Dogwood Rd,Suite 105,Roswell,GA 30075