Title
T-Mobile Lease Agreement Extensions on Five (5) Elevated Water Towers with renewal terms to 2050
History
Late in 2015, the Village of Orland Park entered into five (5) lease agreements with T-Mobile Central LLC for placing in T-Mobile equipment on Village-owned elevated water towers. On April 18, 2016, the five (5) lease agreements were signed.
For all five (5) leases, the “Initial Term” ran from November 1, 2015, to October 31, 2020, with options for extensions of lease for two (2) additional five (5) year “Renewal Terms”. Each renewal term would be at the same rate set forth in the schedule of three (3%) percent escalation each year over the prior year. Payments would be quarterly (January 5th, April 5th, July 5th, and October 5th). A schedule was included in the contract:
2015 $10,433.46 per quarter Nov 1 - Dec 31= $6,917.84 (61 of 92 days prorated)
2016 $10,746.48 per quarter
2017 $11,068.86 per quarter
2018 $11,400.93 per quarter
2019 $11,742.96 per quarter
2020 $12,095.25 per quarter
3% escalation each year thereafter or
2021 $12,458.10 per quarter
2022 $12,831.84 per quarter
2023 $13,216.80 per quarter
2024 $13,613.31 per quarter
2025 $14,021.71 per quarter
3% escalation each year thereafter or
2026 $14,442.36 per quarter
2027 $14,875.63 per quarter
2028 $15,321.90 per quarter
2029 $15,781.56 per quarter
2030 $16,255.00 per quarter
In October 2024, a 3rd party contract servicers working on behalf of T-Mobile reached out to the Village to renegotiate the fee structure and to extend the lease agreement after the 2nd renewal period of 2025 to 2030 for all five (5) leases. The Village objected to the proposed fee structure, and noted the current 3% escalation was fair and reasonable for the future years as well. T-Mobile agreed to the Village’s position.
The funds obtained from T-Mobile will be deposited in the Water Fund, and over the upcoming years will be able to pay for future maintenance on the elevated water towers, such as washing and painting. With these five (5) agreements, in 2025, $280,434.20 will be reserved for those future maintenance items.
The extension agreement is for four (4) additional successive five (5) year terms.
Renewal Term 1: November 1, 2030 - October 31, 2035
Renewal Term 2: November 1, 2035 - October 31, 2040
Renewal Term 3: November 1, 2040 - October 31, 2045
Renewal Term 4: November 1, 2045 - October 31, 2050
An example rent schedule was also included so there is no ambiguity in lease extensions and provided below:
January 1, 2031 $16,742.66 per quarter
January 1, 2032 $17,244.93 per quarter
January 1, 2033 $17,762.28 per quarter
January 1, 2034 $18,295.15 per quarter
January 1, 2035 $18,844.01 per quarter
3% escalation each year thereafter
Financial Impact
There is no financial impact to the Village as part of this lease extension to 2050. Terms and conditions of the original agreement between the Village and T-Mobile Central LLC are extended with these extensions.
Recommended Action/Motion
I move to approve the T-Mobile Central LLC Lease Extensions for five (5) elevated water tower locations (Tower 1, Tower 4, Tower 5, Tower 6, and Tower 10) between the Village and T-Mobile Central LLC;
AND
Authorize the Village Manager to execute all agreements, subject to Village Attorney review.