Global Signal Sprint sublease questioned in IL Court

In late 2005, Global Signal announced the lease of 6600 Sprint towers and the sublease back of the towers by Sprint. One of the questions that we pondered during that time was how this lease would be interpreted if the underlying ground lease between the ground owner and Sprint prohibited subleasing. In a number of cases, Global Signal’s response was to simply craft a site management agreement and not sublease the tower.

Fortunately, it appears that we will soon find out. Oak Forest, IL has sued Sprint PCS over the alleged improper sublease of the tower to Global Signal, claiming that the sublease violated their underlying lease agreement. One of the other questions we pondered was whether there was any damage to the landowner by allowing Global Signal to sublease the tower. In effect, all Global Signal was doing was taking the place of Sprint in managing the tower. If the underlying cell tower ground lease prohibited subleasing, Global Signal could not sublease space on the tower without Oak Forest’s consent.

Oak Forest could argue that by subleasing to Global Signal, that now there were two companies that need access to the cell tower. But really is the burden any greater?

Either way, it really does not appear that this suit was motivated by the “damage” from the unauthorized sublease. Oak Forest is developing a mixed use development where the cell tower sits- and negotiations on the voluntary removal of the tower weren’t moving fast enough. Rather than use eminent domain to “take” the cell tower and compensate Global Signal, the city simply sued for breach of the lease. Having assisted a number of municipal clients navigate through the issue of eminent domain and cell towers, Steel in the Air has found that many municipalities are poorly informed about the cost of relocation of a cell tower.

The legal question here is whether or not the City was actually damaged, and if so, if removal and forfeiture of the tower is an equitable solution to the issue. That will be for the court to decide, if this actually isn’t settled prior to the court hearing arguments.

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