Welcome to the seventh edition of the Tower Genius podcast with Kevin Donohue and Steve Kazella. Hello, Steve.
Steve Kazella:
Hey, Kevin. I can’t believe it’s been seven episodes already.
Kevin Donohue:
Time flies when you’re fooling around.
Steve Kazella:
Time flies.
Kevin Donohue:
Yeah, well you’re correct. But we had an interesting call come in today. And it happens all the time when sites in urban areas, say, get decommissioned and the landlord is sent a provision, a notice, that they’re going to no longer be the site. This landlord in particular had kind of a crazy provision where it said that the carrier could remove their stuff. It didn’t say that they shall remove. And maybe you just want to go into some of the importance on restoration provisions and termination. That’s important for them to get it in writing to have power. You can always accept things later on if there is some need or something that you would have that would be beneficial for the landlord to keep, but maybe go into those restoration provisions and why they’re important.
Steve Kazella:
Okay, well it’s actually essential. If you’re presented with an opportunity to amend a lease agreement if anyone’s asking for your consent. The restoration provision needs to be done properly because you don’t want to be stuck with someone else’s equipment on your rooftop that no carrier needs. It doesn’t matter what they’re telling you. When they’re offering you, look at your decommission letter and say, “Hey, Mr. Landlord, Ms. Landlord. We’ll give you $25,000 if we can leave our junk on your roof.” That’s still becoming your headache, your responsibility. You can have potentially people going up there to steal things from you. It’s a huge liability. “Get it off my roof. It doesn’t need to be there. Get it out of there.”
Kevin Donohue:
And those other carriers are never going to use those lines or those antennas, right?
Steve Kazella:
Yeah. So you don’t need everything. I would leave structural steel up there, Kevin. Just, you don’t need the antennas. You don’t need the cabling. You don’t need the Telco boxes. A lot of those get resold in third world countries, by the way. But you could leave the dunnage on the roof. Maybe you want to put some air conditioning equipment up there or you want to put a Jacuzzi and a bar or something for sunbathing purposes. But you don’t need that equipment.
Kevin Donohue:
And sometimes there are some buildings that are always looking for extra storage, just a place to put shovels and stuff. And if they have a pre-fab building up there at, say an old Verizon or NextTel site, those buildings would have worth maybe to keep for those circumstances. But if they’re not, I always recommend that people would take it out if you don’t think there’s any need.
But the bigger thing is even when you’re done with… How many people have we seen get stuck with major costs for removing towers, right? Not just the rooftops, but we’ve had landlords when the tower company convinces them they’re abandoning this site and they don’t want to pay to have the steel taken down, so they get the landlord to think that they’re going to be in the tower business now and be making all the money and attract three or four carriers.
Steve Kazella:
Kevin, I had North Dakota offer me a… He just wanted to give me his tower for free last year because he was stuck with it. And it was a naked tower, basically, No tenants on it.
Kevin Donohue:
Many times, over a year, you have to take them down if they’re abandoned.
Steve Kazella:
An acre of land with a tower. I’m like, “What am I going to do with that? No, I can’t. Sorry.”
Kevin Donohue:
Yeah.
Steve Kazella:
It’s not going to be my responsibility when some crazy person decides to climb on it to take a selfie on Instagram.
Kevin Donohue:
Or the municipality knocks on your door and says, “Hey, it’s been abandoned for a year or two years. Time to take it down. That was part of your zoning approvals.”
Steve Kazella:
Yeah.
Kevin Donohue:
And when the code states that, now you’re stuck with at $40,000, $50,000 restoration and removal of a tower, right? So even thought the guys who are knocking on your door to finalize some of these termination provisions may seem like nice guys, you have to be really careful.
Steve Kazella:
Right. At the end of the day, there’s two dozen items in your lease agreement. This is one of them that we look at. I mean, there’s probably never been a lease agreement that Kevin and I have looked atin the past 14 years that we didn’t have to make a least a handful of modifications. Even on the ones where the landlord did a great job, there’s usually several items that need to just have a little TLC. But it’s worth it because you need to be protected as a property owner. Again, the rental price is one component. And a lot of what I’ve seen, and just from talking to property owners, thousands of cell tower landlords, and then they’ve talked to some more competitors. I mean, some of these guys are just out there trying to jack the rent up and completely ignoring 90% of the lease agreement.
Kevin Donohue:
You have to protect your initial investment, your principle, right?
Steve Kazella:
It’s a problem.
Kevin Donohue:
It’s the first rule of investment. And if you’re leaving open all these other gaps just to make a few extra dollars, in the end it’s going to cost you big time.
Steve Kazella:
Right.
Kevin Donohue:
For sure.
Steve Kazella:
So yeah, removal and restoration, a very important provision. Don’t leave your cell tower lease negotiation without it.
Kevin Donohue:
Yeah, yeah. Yeah, don’t. Definitely seek expert help on this sort of stuff. But also, People have to understand that there’s a lot of things that look great and they’re totally fine provisions to have in a regular commercial lease where you’re dealing with telecom because the technical aspects, the actual equipment and how the systems work. You literally could be leaving money on the table or breaking your back in the end by having the wrong provisions in there. That’s why, as great as it is to have an attorney you can trust to look things over, very few of them have the experience in dealing with the technical aspects of a lease when it comes to wireless technologies.
But okay, Steve. Thank you so much for your expert answer tonight. And I like your banner in the background.
Steve Kazella:
When I was a kid I never thought I’d be a cell tower expert, but I guess I surprised myself. But remember, talking to Tower Genius will cost you $29.99 (not $99), but not talking to us could cost you a small fortune.
Kevin Donohue:
And if you end up using our other services that we offer, that $29.99 is credited back to you. So many times, that initial call really saves you, in some cases, a couple hundred thousand dollars.
Steve Kazella:
And a world of pain.
Kevin Donohue:
Yeah.
Steve Kazella:
So let’s leave it there.
Kevin Donohue:
Okay. Thanks so much, Steve. Have a good evening.
Steve Kazella:
All right.