Kalamazoo Cell Tower Leases Possibly for Sale

The Kalamazoo City Commission in Michigan is considering selling the revenue from several cell tower lease contracts for $4.65 million. The city has received two proposals: one from Crown Castle who would allow the city to city to sell the revenue from 14 cell tower lease contracts for 50 years, ending after 2064, in exchange for a lump-sum payment of $3.9 million. A separate proposal from SBA Assets would allow the city to sell the revenue from two other cell tower lease contracts for a period ending after 2028 for a lump-sum payment of $720,000. The proposals mean the city is trading 50 years of potential future cell tower lease revenue on 14 sites in exchange for a lump sum equivalent to 13 to 15 years of projected lease payments. According to MLive.com, “If approved, the proceeds would allow the city to pay back the $2.35 million balance of Early Retirement Initiative paybacks to the city’s Pension Fund and to contribute $900,000 to the city’s Other Post-Employment Benefits Trust Fund from the General Fund. It would hold the General Fund harmless for two years of anticipated cell tower revenue totaling $634,000 and would offset more than $700,000 of the projected structural imbalance for the General Fund in 2015.”