On Tuesday, the Rockingham City Council (NC) approved the sale of a Verizon Wireless lease agreement to SBA Site Management. The new owner plans to install equipment on the town’s water tank located next to the police department, reported the Richmond County Daily Journal. The sale comes with a price tag of $409,400, which will be used to renovate the former Food King building downtown.
“The sale of these leases is advantageous to the city for several reasons,” Assistant City Manager John Massey wrote in a memo to Council. “The sale generates an immediate lump sum of cash for the city that can be put toward a large project as opposed to having lease payments trickle in over a 25-year period.”
The initial lease term is five years, renewing automatically every five years (up to four times) unless the lessee opts out after any five-year period. Assuming the agreement lasts the full 25 years, the lease’s total value is $714,296,70, reported the Daily Journal.
The city received eight offers on the lease agreement, with SBA Site Management having the highest bid. According to the Daily Journal, the deal includes a 50-year easement for “future co-locations” that allows SBA to install, remove, operate and maintain equipment on the tower. For any earnings collected from additional tenants installed on the water tank, the city will receive 65 percent of the gross revenue.
City Manager Monty Crump said that Verizon has 90 days to exercise its first right of refusal; the company can choose to buy out the lease and maintain it themselves. “It’ll still be a while before we actually are able to close on this deal,” he added. “But we will be able to close as soon as that 90-day first right of refusal period ends with Verizon.”
Workers began installing Verizon equipment on the tower in July. “Verizon has indicated we should see a significant improvement in several service areas off that tower,” Crump said.
Using the money from the water tank lease sale will help make the city’s King Food building more marketable, said Crump.