City staff will look at repackaging Mission Viejo’s 22 cell-tower leases in a way that would allow the City to keep the most valuable leases and possibly monetize the riskier ones.
Staff’s direction comes from the City Council, which on Aug. 18 upheld a recommendation by the Investment Advisory Commission (IAC) to keep the ongoing revenue stream from most of Mission Viejo’s leases of antenna sites to cell phone companies. The recommendation included staff determining which leases pose the greatest risk of termination and analyzing the feasibility of selling those leases. The City’s leases are expected to generate roughly $500,000 in annual revenue.
The decision was based on a request from ATS Communications, which is under contract with the City to provide services related to cell-tower leases. ATS approached the City regarding possible monetization of the City’s 22 cell-tower leases.
The City Council – wanting to make an informed decision and assess the complex issue and proposals considering risk, financial benefits and other impacts – had asked the IAC to review the matter. ATS solicited and received three proposals from investment companies willing to buy the leases for IAC review. The City hired Steel in the Air (SITA), a national firm specializing in the area, to help with the technical review of the proposals.
After extensive review, the IAC determined that the $4.95 million offer, which was the highest and best offer, from Communications Capital Group (CCG) was not enough compensation for the sale of the cell tower leases and voted unanimously against the monetization.
The City Council’s Aug. 18 meeting followed with testimony from ATS, SITA, the chair and a member of the IAC and public comments. Taking into consideration the City’s thorough work to assess the proposals and weigh financial benefits and risks along with the extensive testimony, the City Council concurred with the IAC and adopted both of its recommendations.
City staff is expected to report back to the City Council with its findings within the next few months.
