Tower deals look sour

Controversial lease: Taxpayers, not middlemen, should gain most from telecommunications pacts.

February 05, 1999

AS THE only jurisdiction in the Baltimore area operating with a cap on property taxes, Anne Arundel County needs all the revenue it can get, its officials often say. So why didn't they negotiate more favorable leases for telecommunications antennas on county property?

As The Sun's Laura Sullivan reported this week, the terms of county leases vary greatly. In 14 of 15 leases for telecommunications towers, the county charges companies a rates that vary from $4,500 to almost $40,000 annually. The lessees must renegotiate to sublet space on the tower for others.

However, in one arrangement, made with West Shore Communications (now owned by Pinnacle Towers), the lessee is allowed to sublet space. The county receives a guaranteed payment with step increases and a 25-percent share of profits from the subleases.

Last year's $25,400 payment from West Shore to the county was, in fact, the second largest the county received for a tower lease. Yet the bulk of the revenue generated went to what is, in essence, a middleman. West Shore, whose principals included two well-connected county businessmen, made a handsome return by subleasing the county property to other firms. This arrangement naturally raises questions.

The water towers are valuable to telecommunications companies because they can accommodate radio towers without raising community ire. Judging by the lucrative return generated by the West Shore lease, the flat rate leases appear to be underpriced.

A county starved for cash should be making every effort for a reasonable return on assets. The County Council, which removed itself from reviewing these leases three years ago, should direct the county auditor to examine the 15 current leases and make recommendations. The county -- and more to the point, taxpayers -- should realize the appropriate share of revenue from use of public property.

Pub Date: 2/05/99

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