REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Bill Krill, Real Estate and Project Manager
Subject:
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Approve and authorize the execution of the First Amendment to the Schedule of Lease Property between the City of Huntington Beach and T-Mobile West LLC for the cellular antenna site located on the roof of Central Library
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Statement of Issue:
The City Council is requested to approve and authorize the Mayor to execute the First Amendment to the Schedule of Lease Property between the City and T-Mobile West LLC for the cellular antenna site located on the roof of the Central Library.
This Amendment will increase rent by 60%, add annual rent escalations of 4%, and include a one-time $5,000 administrative fee, aligning this long-term lease with current market conditions and ensuring the continued collection of revenue from a high-performing telecommunications tenant.
Financial Impact:
Under this Amendment, monthly rent will increase from $2,246 to $3,600 effective the month following execution, a 60% increase that brings the site’s rate in line with current market standards. The Amendment also establishes annual rent escalations of 4%, exceeding the typical market averages of 3%. Additionally, T-Mobile West LLC will pay a one-time $5,000 administrative fee to offset City staff costs associated with the negotiation and execution of the Agreement. Over the potential extension period (through the initial term ending April 30, 2026, plus five optional five-year renewals), this lease is projected to generate approximately $1.9 million in revenue for the City. All funds will be deposited into General Account Fund 10000100.45100
Recommended Action:
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A) Approve the First Amendment to the Schedule of Lease Property between the City of Huntington Beach and T-Mobile West LLC; and
B) Authorize the Mayor to execute the First Amendment and any ancillary documents, in a form approved by the City Attorney.
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Alternative Action(s):
Do not approve the Amendment and provide direction to staff.
Analysis:
In April 1996, the City entered into a Master Communication Site Lease Agreement with Pacific Bell Mobile Services (a predecessor to T-Mobile West LLC) allowing installation of wireless communication equipment on City-owned properties. Each site under the Master Agreement is governed by a separate “Schedule of Lease Property,” which establishes the specific location, rent, and terms for that site.
Schedule No. 1 covers the cellular antenna site on the roof of the Central Library (7111 Talbert Avenue). The initial term began May 1, 1996, and, with renewals, runs through April 30, 2026.
As the lease approached its final term, staff proactively initiated negotiations with T-Mobile West to update the rental rate and terms to reflect current market conditions. Following several rounds of discussion, staff successfully secured a 60% rent increase, above-market annual escalations, and a one-time administrative payment, while maintaining uninterrupted service and ensuring continued public benefit.
The negotiated terms represent a strong outcome for the City, balancing fair compensation for the use of City property with long-term revenue stability. The amendment also includes updated language on equipment modifications and colocation approvals to maintain City control over future changes.
Key amendment terms are as follows:
• New Rent: $3,600 per month, effective the month following execution
• Escalations: 4% annual increase on each anniversary
• Administrative Fee: One-time payment of $5,000 within 60 days of execution
• Term: Through the existing agreement period ending April 30, 2026
• Renewal Options: Five (5) additional five-year renewal terms (automatic unless either party provides 30 days’ written notice not to renew)
• Subleasing/Colocation: Requires City notification and written approval
• Modifications: Tenant must obtain City approval for all proposed equipment modifications, including plans, permits, land use authorizations
This action demonstrates the City’s ongoing efforts to maximize revenue from City-owned assets, maintain alignment with market conditions, and negotiate firmly but fairly with private lessees for the benefit of Huntington Beach residents.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Contract Summary
2. First Amendment to Schedule of Leased Property
3. Certificate of Insurance
4. PowerPoint Presentation