American Tower and Home Developer Can’t Come to An Agreement Regarding Two Cell Towers

American Tower has two cell towers on a piece of property in Batavia, IL. A home developer appears to have put together a plot plan to develop 110 houses and 88 multi-family units in an unincorporated area of Batavia. The property has two ATC cell towers located on the south side of the property. The developer proposed to the City of Batavia that they annex the entire development but wasn’t able to come to terms with ATC regarding the cell tower lease areas.  As a result, they ended up annexing everything around the cell towers but leaving the half-acre the cell towers sit on in the County.  This created a “donut” of land where the cell towers that stays in the county.

Why would they not include the cell towers?

The article suggests that the annexation of the property was against the provisions and requirements of the lease. I started to wonder what clauses of the lease could prevent the annexation. First and foremost might be just the presence of the cell towers. The developer may have planned to terminate the leases and move the cell towers only to find out how expensive that would have been. Having assisted clients with negotiating early relocations with tower companies, they aren’t easy or cheap.  I could see why a developer might choose not to relocate the towers and end up planning around them.

Alternatively, the lease may prevent the landowner from changing the zoning of the parcel without the consent of the tower owners. This clause exists so that landowners can’t rezone a parcel to where the towers are no longer allowed.

Lastly, there may have been what we call “reverse setback” issues.  This is where a city or county limits what can be built within certain distances of a cell tower.

I suspect that when these leases expire, they won’t be renewed. Or, the lease rate may be higher than ATC is willing to pay.   However, one has to question whether the present value of the lease payments exceeds the value of the “donut” land for housing development.