What Happened?
Two cities in Ohio have added revenue to their general funds by leasing public-property space to cell phone companies. The move, which enables cell companies to broadcast their signals, has had a material impact on the towns’ finances.
The Numbers
According to published reports, the city of Middletown, Ohio, grosses approximately $55,000 per year from lease agreements with Sprint, Verizon, and Cincinnati Bell. When the town tore down one of its water towers, Verizon agreed to build a cell tower there, also granting the city free use of it for communications purposes.
Nearby Hamilton grosses about $25,000 annually, and expects to receive more than $750,000 over life of the 30-year contracts. According to city documents, the leases are monthly rents at approximately $1,000 per site per month.
The revenue has been important and is considered “significant” in there rural towns. As Middletown (OH) Planning Director Marty Kohler told a local newspaper, “that’s a police officer or an entry-level firefighter for use of city property that’s not otherwise gaining revenue.”
Comparables
Cell tower revenue is typically tied to population density, among other metrics. The town of Ashland, Mass., outside of Boston, for example, gets $170,000 per year for antennas on town sites.
Trends & Incentives
According to reports, the wireless communications industry spends more than $25 billion per year upgrading their infrastructure, and much of that is benefiting municipalities. That’s because the communications companies typically prefer working with cities and towns, as often the relationships are cheaper than securing easements and building antennas on private land. In addition, public-space antennas can benefit an entire community, instead of just one property-owner or business.
The Issues
Towers can mean long-term cash for towns, but it’s a mixed bag. Even though consumers are demanding uninterrupted wireless service, they rarely want the towers in their backyards due to health, eyesore, and property-value concerns; the town of Marlborough, Mass., for example, recently rejected a proposal for a tower. For the record, the American Cancer Society says that it’s unlikely towers cause cancer or other health problems, but they also acknowledge the technology is new and data is sparse.
Action Items
To read the original article on the cell phone lease agreements in The Middletown Journal, click here.
An excellent legal overview of tower zoning, siting and leasing matters was published by the law firm of Varnum back in 2009. A New-York specific article, which outlines key issues, can also be found here, as can a legal memorandum from the New York State Office of the General Council, which outlines municipal regulation of cell towers and antennas.
Interestingly, there are some new legal cases that might be worth reading about. For example, Verizon recently sued a town for “unreasonable delays” in deciding about a cell tower. A review of the case from law firm FosterSwift is here.
From the health perspective, you can read the American Cancer Society’s FAQ on cancer and cell towers.
A sample tower lease from the city of Long Beach, Calif., is also available for download. Please keep in mind that the document is dated 2007.