Ordinary Meeting of Council 13 August

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1 Ordinary Meeting of Council 13 August ITEM 5 REF: CM172/12 File: LEASE AND LICENCE OF TELECOMMUNICATIONS FACILITY TO OPTUS MOBILE PTY LIMITED AT MT KEIRA TELECOMMUNICATIONS TOWER Optus Mobile Pty Limited has approached Council seeking to renew their lease and licence in respect to part of Council s Telecommunications Tower located at Mt Keira Summit Park, Queen Elizabeth Drive, Mt Keira. This report outlines the details of this proposal and seeks Council s approval to the Lease of the Equipment Cabin within Council s external equipment building and a Licence for the right to install, maintain and operate telecommunication facilities on part of Council s Lattice Type Tower. Recommendation 1 Authority be granted for a lease and licence to be entered into for Part Lot 1 DP875991, Mt Keira Telecommunications Tower, Mt Keira Summit Park, Queen Elizabeth Drive, Mt Keira, to Optus Mobile Pty Limited for two consecutive terms of five years each (totalling 10 years) in accordance with the terms set out in this report. 2 Optus Mobile Pty Limited be responsible for payment of Council s legal costs for the preparation and completion of the Lease documentation up to $3,000 (excluding GST). 3 Authority be granted to affix the Common Seal of the Council to the Lease and Licence documents. Attachments Lease and Licence Plan Report Authorisations Report of: Authorised by: Background Peter Coyte, Manager Property and Recreation Peter Kofod, Director Infrastructure and Works Optus Mobile Pty Limited currently holds a lease and licence in respect to Part Lot 1 DP Mt Keira Telecommunications Tower, Mt Keira Summit Park, Queen Elizabeth Drive, Mt Keira which expired on 22 June 2008 and has been holding over under a yearly basis pursuant to the lease. Optus Mobile Pty Limited has requested to renew the lease of the Equipment Cabin and licence for the right to install, maintain and operate telecommunication facilities on part of Council s Lattice Type Tower for a term

2 Ordinary Meeting of Council 13 August of five years plus further five year consecutive lease and licence on the terms and conditions outlined in the proposal below. Under the provisions of the Telecommunications Act 1997, Optus has the power to enter Council s land and operate its equipment with or without a lease, should they choose to exercise their powers under the Telecommunications Act, Optus Mobile Pty Limited however is willing to negotiate a lease/licence with Council and agreement has been reached on a proposal as set out below: Lessee Site Address/Lease Area Optus Mobile Pty Limited 1 Lyonpark Road MACQUARIE PARK NSW 2113 PO BOX 888 NORTH RYDE NSW 1670 Part Lot 1 DP being par Folio Identifier 1/ being part of the premises described as Optus area hatched on the attached plan within the extended equipment building and a licence granting the right to install, maintain and operate telecommunications facilities on Council s Telecommunication Lattice Type Tower at a height of 30 metres on the Tower as shown on the attached plans. Permitted Use Construction, maintenance and operation of a telecommunications network and telecommunications service in accordance with relevant Australian Standards and other legislation. Term Commencement Date Rental Rent Review Subletting Legal Costs and Stamp Duty Two (2) consecutive leases of five (5) years. To be determined. $36,000 per annum (plus GST). Annually on the commencement date by fixed percentage increase of 4% with a Market Review at the commencement of the 7 th year of the lease term (2 nd year of the consecutive lease term). Council will not agree to Optus Mobile Pty Limited subletting the lease/licensed areas without the prior written consent of Council. Optus Mobile Pty Limited is to pay up to $3,000 capped towards Council s reasonable legal costs for the preparation and completion of the lease documentation and for all costs associated thereto such as all survey, registration and stamp duty costs (if applicable).

3 Ordinary Meeting of Council 13 August Other Costs (Outgoings) Contribution to Backup Power Generator Costs Insurance Maintenance of the Facility Optus Mobile Pty Limited shall be responsible for all outgoings payable including all Sydney Water and Council rates and charges (if applicable), electricity, garbage, telephone, gas, water usage and any other charges whatsoever relating to the leased/licensed areas. In addition Council will require a contribution of $1,100 per annum GST inclusive towards the Power Generator running costs. Council requires the Lessee to effect the following insurance policies: a) Public Liability insurance for a minimum of $20 million; b) Damage to the building and equipment on the land and the Tower and any property or things located upon the land including contents insurance for equipment installed by the Lessee; and c) Workers Compensation insurance. Council s interest is to be noted on the Policies as owner of the land and for its respective rights and interests in the land. On the anniversary of the Lease term, or on request, the Lessee must produce evidence to Council of the current insurance policies. If the Lessee fails to maintain the required policies and recover the insurance premium from the Lessee as a charge under the Lease. The Lessee is responsible for all maintenance and repairs to the Lessee s equipment on the Tower and to keep the premises and its facilities in good and safe repair and condition, free of rubbish and debris. The Lessee is also required to comply with Council s Access Protocol and Induction Program and must give notice to Council of entry to the land for the purposes of planned maintenance and major maintenance activities. Any modification to the equipment within the Leased Area and Licensed Areas will also require Council s consent and the Lessee will need to provide structural analysis reports, independent radiation hazard reports and site management plans and safe work method statements as directed by Council.

4 Ordinary Meeting of Council 13 August Proposal It is proposed that Council enter into a lease/licence with Optus Mobile Pty Limited which will provide market rental and additional revenue to Council. The negotiated terms of the lease/licence are as outlined above. Consultation and Communication All other relevant divisions of Council were consulted and no objections were raised. The subject land (part Lot 1 DP875991) was reclassified from Community Land to Operational Land on 17 December 2010; therefore Council is not bound to advertise this lease and licence. Planning and Policy Impact The granting of this lease is consistent with Council s Commercial Lease Policy and is submitted to Council being in excess of the term delegated to the General Manager, ie 10 years or more. Risk Assessment Due diligence undertaken by Council Officers will minimise any risk to Council by ensuring that Optus Mobile Pty Limited meet Council s standard requirements in respect to Work Health and Safety at this site and adherence to Council s access protocols. In addition, the Lessee has the experience and demonstrated capacity to meet the requirements of the proposed lease Financial Implications Entering into a lease/licence with Optus Mobile Pty Limited will provide additional income to Council (total rental of $194,986 plus GST over the first 5 year term of the Lease). The new rental negotiated of $36,000 per annum plus GST is based on market rental as determined by Valuers, BEM Property Consultants and is similar to other tenancies at this location. The new rental is significantly higher (an increase of 50%) than the previous rental received by Council of $24, per annum plus GST. Conclusion The negotiated term of five years plus further five year consecutive lease is favourable to Council. The income will increase the revenue generated from commercial leases and licenses, will formalise the tenure arrangements and assist Optus Mobile Pty Limited in meeting its telecommunications strategy for the Wollongong Local Government Area.

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