AT&T Asks Berryville Town Council, “Give Us A Break?”

Times are tough for consumers and businesses alike and the wireless industry is no exception. For several years the Town of Berryville has leased space on and around the elevated water tank on Tom Whitacre Circle to Triton PCS Property Company, LLC for antennas that AT&T uses for wireless phone service. Now AT&T is seeking a lower lease rate citing financial strains. The current lease allows AT&T to locate 3 antennas on the top of the tower and an accessory equipment building on the ground. The 4 year, 11 month lease generates a monthly payment to the Town that has reached $2,111.29. The current term of the lease includes a 3% escalation fee applied to the rent annually and expires at the end of September this year. AT&T sees this as an opportunity to renegotiate the lease and   implement a rent reduction program.

Black Dot Wireles, LLC, a wireless lease management and services company has been retained by AT&T to implement a “Lease Optimization Program.” AT&T is citing economic hardship as a reason for the town to extend a 5-year rent reduction for the space. In a letter dated 4/8/2010, Mike Haley, lease consultant for At&T wrote, “In these tough economic times, AT&T is actively reviewing its portfolio of sites to determine ways to make its network more efficient and economical. Specifically, AT&T is requesting a 60-month rent reduction for the site located at 201 Tom Whitacre Circle Berryville, Va, 22611.”

The terms would reduce the rent for five years and then restablish the rent to its current rate   in the sixth year. The new lease also does away with the language limiting the number of antennas that can be installed on the tower. As an enticement AT&T is floating out “Rent Guaratee Periods” some of which extend out 36 months. When coupled with automatic renewals this could guarantee the lease income for up to 360 months.

Black Dot has presented the town with three options that reduce the rent and extend the terms. To ensure that the council had a clear understanding of the proposal Town Manger Keith Dalton initiated a conference call between Mike Haley and the Council during open session. Mr Haley thoroughly explained the reasons and scenarios to the council, and closed without any questions from council members. The proposed options are shown in the table below:

Rent Schedule and Rent Guarantees Current Option #1 Option #2 Option #3
Base Rent (months 1-60) $2,111.29 $1,847.90 $1,910 $22,920
Base Rent (beginning month 61) $2,174.63 $2,174.63 $2,174.63 $26,095.56
Base Rent Frequency Monthly Monthly Monthly Annual
Escalations 3% 3% 15% 15%
Escalation Frequency Annual Annual Annual Term
Rent
Guarantee Period (months)
36 36 36 36

After the Call Mayor Wilson Kirby was quite clear, “We’ve considered this but I feel like we should not take a back step in this.” Councilman Allen McWilliam agreed with mayor.

Keith Dalton pointed out that, ” The only real meat on the bone is the merit of the rent guarantees.”

After some discussion the council decided not to refuse the proposal at this time but to continue discussions with Black Dot to see if there is some real benefit to the proposed lease. Mayor Kirby tasked the Town Manger with continuing the dialog and closed by saying, “Bottom line is let’s keep this case open.”

Comments

  1. Come on says:

    If there is one company that has not suffered in these economic hard times, its AT&T…think iPad, iPhone. Hopefully, we, as a county, stand firm here.

    • Kenlynne White says:

      Ditto

    • Christina says:

      I agree here. AT&T is definitely not one of the companies experiencing “economic hardship”. They know exactly what they’re negotiating here…lower rent, increased antennae = more bottom line for them. If anything we should increase their rent since they are riding high with the Iphone and I pad contracts.

  2. Time4Change says:

    In a time when AT&T is charging more for less service, adding charges that were previously bundled and continually fault their service problems to “multiple degraded towers” they hardly put forth a climate of compromise. I am personally disgusted that they’d even ask. I hope no one seriously considers.

  3. Right Winger says:

    Say no. Period. Obviously, they want to put more antennae up there and lower their rent payments. No way. Stand firm. If they want more antennae, it’s going to cost them more money too. What are they gonna do, back out of Clarke County? No way, that’s a good spot for them on that tower, and AT&T knows it.

  4. Give AT&T a break. The NEED the money!

  5. Hay zoos says:

    The smart thing would be to re-bid to all carriers. But hey, this is Berryville, so good luck with that.

  6. Mayor Quinsby says:

    I say: ask the school board what to do. By the time they’re finished hiring firms to tell them what to think…the water tower will have rusted, and tumbled to the ground. Then we can let the town build AT&T a brand spankin’ new tower with a I-Phone wind vane on it. [for free-of course].

  7. Bill Bell says:

    Let’s see here. Less rent for more antennas? Right! The actual lessee (Triton PCS) is looking to sub-lease more antenna space to other carriers and pay us less money. They can get another couple of grand per month for each additional carrier they are able to sub-lease to. Don’t fall for the, “We’re doing this for for poor old AT&T” line. They are looking to increase their revenue, not reduce AT&Ts costs, and hoping that us “country bumpkins” won’t notice.

  8. The attitude of “stand firm and increase the cost, especially for more antennas” and “AT&T isn’t hurting” is a rather like Not In My Backyard activism. I’ll guarantee that a majority of commenters will be found complaining monthly about the cost of cellular service and reception around the community, or overage charges when their teenager sends thousands of texts. Lower rent and increased antennae = better reception in your community, and lower monthly payments. The range of service of the Berryville tower does not extend much farther than perhaps 5 miles from town, let alone out of the county. Your cellular phone plan is as expensive as it is because AT&T is sinking billions of dollars into expanding the network to offer better quality of service in a world with increasing bandwidth requirements. If you find yourself wondering why you cannot attain instant gratification on your iPhone after removing incentive for AT&T to expand network resources in your area (I.E. lower rent), consider that fact that business expenditures in infrastructure are extremely high.
    And holding the opinion that a private business should be charged more for use of a public resource is more left than right wing. Get your facts and opinions straight before labeling yourself improperly.

  9. Richard says:

    The cellular coverage in this community is horrible. Instead of taking a wait and see attitude to what AT&T is going to do, how about engaging them in conversations on what would the county have to do to get better service in this area so that it became worth it for AT&T to pay even more for the lease instead of less. They may agree to continue to pay the current lease but I doubt very much if they will put better equipment in this community until we help to make it worth their while. By the way that is true for Verizon and all the others. To me we need a more proactive approach at getting better cellular and wireless service into our community. The communications capability in this community is woefully inadequate for the times, and my guess is that it would be virtually useless under any large scale emergency.

    • Bville-Bud says:

      Ding ding ding…

      I think we have a winner here. I pay AT&T way too much each month to feel very sorry for them, but a “help us to help you” idea may pay dividends for everyone involved. How about some broadband discounts for the County, more wireless coverage (both cell & internet); maybe a tax deductible technology donation to the schools would help make everyone more comfortable with lowering the lease rate.

  10. Sometimes my AT&T phone drops out on Main Street, but the bill I pay has gone up. So too has the salaries of the mid & upper level AT&T managers (I know this because my cousin is one) has gone up. In these economic times my salary to pay the bill has gone down. With local towers you would think my phone would ring when someone calls. Actually sometimes not for days, then I get a ‘missed call’ message. The service is poor, and they charge the customers way more than the actual cost of services used. This comment is based on months of no phone calls, but with the same bill as a month when I actually use the phone. Then I often notice a message unit charge on my bill when someone sends me a non-solicited text message. Why am I paying for what someone else sent (let us also note the sender possibly is also being billed for the cost of their message, just like I am if I am dumb enough to text them back). My point is, in no way is AT&T feeling a pinch. Put it to a vote of the residents of Clarke. I vote no to their request. Raise their rents. Let them cut executive bonuses to cover the cost of doing business.

  11. Tony Reynolds says:

    Cell companies have their customers by the throat – and do not – WOULD NOT – consider a ‘rate reduction plan’ for any customer who had a financial problem. I say do not cave in. Less that $2.5K per month is not even an accounting error for AT & T. Better yet, call Verizon and see if they are interested in the tower and if for a few bucks more they want to boot AT & T off.

  12. This message is directed to Reid:

    Do you by chance work for the Marketing/Public Relations Department at AT&T? I run a successful home based business in Berryville. My Business Licence is extremely expensive. I get nothing in return for the money that I pay out. Well, I suppose I do. The town allows me to work from the house that I own. A bit of a scam really.

    Anyway. My point is that if we give the Telecoms giants discounts because they’re down to their last Billion dollars, who is going to be responsible for the shortfall when the town has to pay it’s own bills? Well, I know it’s going to be the likes of the small business owners in the town.

    BTW: I’m sure that AT&T wasn’t hurting when it picked up it’s share of the $60 Billion Networx contract during 2007.