Sprint Spectrum Addendum to the city of Redmond, WA Facilities Lease for Telecommunications Facilities

It is the position of Sprint Spectrum L.P. that this lease is not commercially reasonable, is not typical of leases entered into for purposes of wireless communication facilities and that it should not be considered as a viable example of a lease for this purpose by people viewing this document. It was only entered into due to the unique factors present in this situation. In any other situation, it would not have been considered by Sprint Spectrum L.P.

When cities act both as a market regulator (zoning code authors and administrators) and a market participant (land owners seeking compensation for leasing their land), they have a ethical responsibility to act in a commercially reasonable manner. Many cities are re-writing their zoning codes to encourage, if not require, wireless communication facilities to locate on city owned land. Cities should not use their role as market regulator to exact commercially unreasonable terms in their role as market participant when they lease their land with unprecedented provisions in the market place such as have been included in this lease. For the business reasons outlined below, challenging the city's lease provisions in conjunction with the zoning code provisions which essentially necessitated locating the Sprint Spectrum L.P facility at the city owned property would have taken far too long. Consequently, other jurisdictions, courts and landowners are discouraged from considering this lease as a model for use in any manner.

Sprint approached the City of Redmond in December of 1995 to begin lease negotiations to use the water tank which is the subject of this lease. Alternative locations would have required a new monopole. A new monopole was essentially precluded by the City's zoning code which required exhaustion of alternative building-mounted locations the city owned water tank was an obvious alternative. In 1996 the City decided that an ordinance should be adopted to allow the leasing of public property for such projects under very restrictive conditions. It was not until March 18th, 1997 that the City finally enacted the requisite ordinance. The actual lease, drafted on the basis of the ordinance, was not approved by the Council until May 20th, 1997.

The goal of Sprint Spectrum L.P. was for commercial launch in early summer, 1997. The water tank was a critical site to enable the commercial launch and it would have taken too long to negotiate more reasonable terms in either the lease or the underlying ordinance. Consequently, a reluctant business decision was made to accept the lease and to rely on the good faith of the people at the City of Redmond that the lease would not be implemented in a manner as onerous as the terms of the lease might otherwise allow (i.e. that the potential to be evicted every year would not be realized, that renewal applications would not be required every year, that the one-sided liability provision would never be tested, etc.).