Municipalities – Building and Owning Your Own Cell Tower
Municipalities have a tendency to handle things internally, deciding upon best-practice solutions for sustainable, strategic results that benefit their constituents. We applaud any pro-active problem-solving, yet want to be clear that when it comes to wireless lease negotiations or the efficient deployment of wireless technologies and infrastructure, expert advice can save money and instill peace of mind – well into the future. We’ve created this website to be a valuable public resource for our clients and potential clients. When it comes to procuring the best possible lease rates for wireless leases, we can help with that, and handle the negotiations for you. However, if you represent a municipality that wants to limit its reliance on outside organizations, we can advise you on the process-steps towards building and operating your own cell tower.
How You Can Increase Revenue by Operating Your Own Cell Tower
If your goal is to increase revenue, then you should consider building and managing the tower yourself. While there are numerous reasons why this should be considered as an option, the main reason is that the revenue from such a structure could add to the coffers of your municipality.
To illustrate this point better, let’s discuss the financial basics of building a tower. A tower might cost $150,000 to construct. However, a fully loaded tower can bring in $100,000 in revenue annually. After a few years, that means that the tower is paid off and the municipality is receiving $100,000 a year in income. In addition to the profit, the municipality would have a valuable asset on its books, and be in charge of any zoning or land restrictions.
Contrast that with the municipality that leases land on which a wireless carrier or tower company builds a tower. The municipality would receive somewhere between $12,000 – $24,000 per year depending upon the tower location. In this case, the annual revenue would be the same, regardless of the number of tenants. Even if the municipality were able to negotiate a lease wherein it would receive an increase in rent along with the collocation of additional wireless tenants, the total revenue would still fall short of the revenue received if the municipality owned the tower outright.
What makes this process even more attractive is that often times the municipality is in a much better position to regulate the development of competing towers. With well written ordinances, the municipality can decrease the proliferation of cell towers while increasing its coffers. All in all, it’s a lucrative investment.
Steel in the Air can assist your municipality in reviewing whether or not it makes sense to develop your own tower. Steel in the Air can also create a pro forma for the municipality to evaluate the potential of the tower by doing a competitive analysis of likely tenants. Furthermore, as experienced tower developers, we can walk you through the process from beginning to end.
If your municipality is contemplating leasing land to a wireless provider or has been approached by a tower company to build a tower on municipal property, please contact us for additional information.
Broadcast tower leases cannot be appropriately valued using standard cell tower metrics. At the end of the day, they are worth more. Contact us for fair market evaluations to ensure that you don’t leave money on the table.
Consumer demand for higher speeds brought on by robust and rising Smartphone and tablet usage, and the pervasive 4G technology migration, will drive future demand for cell site leasing. The number of cell sites in the U.S. alone is expected to surpass 400,000 by 2015.