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Title:
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Approval of a Real and Personal Property Transfer Agreement, Bill of Sale, and Termination of Lease Agreement with Time Warner Cable Related to the Antenna Tower and Appurtenances Located in Culver City Park.
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City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council approve a Real and Personal Property Transfer
Agreement, Bill of Sale, and Termination of Lease Agreement (the “Transfer
Agreement”) related to the antenna tower and appurtenances located in Culver City
Park.
BACKGROUND:
In 1987, the City and American Cablesystems of California (the predecessor in
interest of Time Warner Cable – TWC) entered into a lease agreement which
enabled TWC to construct and maintain a communications tower and appurtenances
on a parcel of land owned by the City located in Culver City Park (the “Lease
Agreement”).
In 2010, TWC notified the City of its intent to terminate the Lease Agreement as its
needs for the communications tower had changed since the Lease Agreement was
initiated. As part of the Lease Agreement termination, TWC indicated it would
remove the communications tower and the appurtenant building from the site. At
that time, the City reviewed the terms of the Lease Agreement and alleged that TWC
had miscalculated the rent due under the Lease Agreement. The City informed
Meeting Date: 09/24/12 Item Number: C-1
CITY COUNCIL AGENDA ITEM: Approval of a Real and Personal Property
Transfer Agreement, Bill of Sale, and Termination of Lease Agreement with Time
Warner Cable Related to the Antenna Tower and Appurtenances Located in Culver
City Park
Contact Person/Dept.:
Martin R. Cole, Assistant City Manager
Phone Number:
(310) 253-6000
Fiscal Impact: Yes [X] No [ ] General Fund: Yes [X] No []
Public Hearing: [ ] Action Item: [] Attachments: []
Public Notification: Meetings and Agendas – City Council (09/20/12)
Department Approval:
Martin R. Cole (09/19/12)
City Attorney Approval:
Carol Schwab (by H. Baker) (09/19/12)
Chief Financial Officer Approval:
Jeff Muir (09/19/12)
City Manager Approval:
John M. Nachbar (09/19/12) City of Culver City, California
Agenda Item Report
TWC of this miscalculation and requested TWC remit the correct amount due under
the Lease Agreement.
As a result, negotiations ensued amongst the parties to resolve two main issues: (1)
the alleged back rent owed the City and (2) the desire of the City to take title to the
communications tower and appurtenant buildings as both had value to the City.
DISCUSSION:
Staff and TWC have reached a tentative agreement which resolves both of the main
issues with the following major points:
1. TWC has made monthly rental payments (and shall continue to make such
payments until September 30, 2012) despite the communications tower
having little value to TWC since early 2011;
2. TWC has agreed to transfer title to the City of the communications tower and
appurtenant building in an AS IS condition at no cost to the City;
3. In consideration of the above two items, the City withdraws its claim for back
rent and accepts title of the communications tower and appurtenances
4. The City grants TWC a Right of Entry for a period of ten years to access
certain under and above ground facilities which will remain after the
termination of the lease.
Should the City Council approve the Transfer Agreement this evening, it is expected
the transfer of title will occur on October 1, 2012.
FISCAL ANALYSIS:
The City received approximately $3,200 in monthly rent during the term of the Lease
Agreement. Upon termination of the Lease Agreement, the final rental payment will
be for the month of September, 2012. However, approval of this Transfer
Agreement allows the City to take title to the communications tower and
appurtenances. In the case TWC were to remove the communications
tower/appurtenances, the City would likely have incurred hundreds of thousands of
dollars to reconstruct the tower or to find an alternative location for the City
communications facilities now present on the tower. Approval of the Transfer
Agreement avoids these costs to the City. Also, there may be opportunities for the
City (as owner of the tower) to lease space on the tower to third parties which could
generate lease income to the General Fund. City of Culver City, California
Agenda Item Report
ATTACHMENTS:
None.
MOTION:
That the City Council:
1. Approve a Real and Personal Property Transfer Agreement, Bill of Sale, and
Termination of Lease Agreement with Time Warner Cable; and,
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.