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End to mystery of Metro PCS payments to the town


The mystery of what looked like missing revenue due the town from a company for payments to keep an antenna on the cell tower at the Recycling Center is solved.

Supervisor Gary Gerth said that when it was brought to his attentionthat no payment had been received from  Metro PCS since 2015, he called Florida-based SBA Communications, the company that leases the tower from the town .

Senior Site Administrative Coordinator Nikki Korval had a copy of a letter that had been sent to previous Supervisor Jim Dougherty informing him that Metro PCS had cancelled its contract in 2015.

Moving forward, the Town Board is looking to hire  a consultant to assist in reaching a decision about whether to take a $2.2 million offer from SBA Communications to buy the cell tower at the Recycling Center or continue to receive revenue  from cellphone companies that have antennas on the tower.

Currently, the tower has antennas  belonging to Verizon, Sprint, T-Mobile and New Singular. But there have been  discussion with Sprint about its possible removal of its antenna from the tower and that, of course, would lessen the annual revenues the town receives.

With Sprint — and if all others currently on the tower remain — Town Attorney Bob DeStefano Jr. said the total of  $134,264 received in 2017 could continue to be the annual cash flow. But if Sprint leaves, that would drop the annual income to $98,000. Over the time of the current contract that runs to 2033, the town could receive $3.2 million, Mr. DeStefano said.

In a conference call with Ms. Korval the Town Board and members of the public discussed the possible buyout at Tuesday’s work session, leaving the town to weigh whether it is better off taking the money now and providing an easement to SBA for maintenance of the tower or continuing to receive annual payments.

Among the risks of the annual payments, Ms. Korval said, is the possibility that new technology could make the tower obsolete, ending the revenue stream. 

Even if there were some remaining cellphone companies continuing to use the tower for their antennas, that could lessen the amount of the annual payments, she said.

At the same time, Ms. Korval said SBA is very much involved in the use of new technology. But she said she doesn’t envision all towers being replaced by other technologies.

Still, she emphasized that if the town accepted the $2.2 million buyout, it wouldn’t be risking the year-to-year revenue stream that could change over time.

In response to Heights Property Owners Corporation General Manager Stella Lagudis about any changes to the tower that could become unattractive to neighbors, Ms. Korval said she didn’t envision any extensions to the tower, but if there were to be any proposed, they would have to go through the vetting process with the Planning Board and Zoning Board of Appeals, so the public would have ample time to weigh in on possible changes.


Asked what the advantage is for  SBA Communications to purchase the tower, Ms. Korval explained that buying up the leases on towers such as the one at the Recycling Center is similar to a homeowner paying off a mortgage and, therefore having more cash flow without the monthly mortgage payment. For the company, buying up 4,000 leases is like paying off 4,000 mortgages, she said.

“It really changes our cash flow,” she said.

What that does is to change the company’s balance sheet relating to assets and liabilities, reducing the company’s liabilities.

Responding to a question about ongoing maintenance of the tower, Ms. Korval said the company would continue to upgrade the tower after the buyout since it wants to remain competitive in offering those who put their antennas on the tower the best service.

What’s more, she said there are “many scammers out there” — a lot of small buyers, some of whom are the same people who introduced Real Estate Investment Trusts (REITs) several years ago. They ended up leaving a lot of investors hurting when anticipated returns took a dive. Some of those same people who brought REITs to market are now focused on cell towers and because of their lack of knowledge about the industry, could leave investors holding the bag for investments gone bad.

Mr. Gerth acknowledged that since the possible purchase by SBA of the town’s tower became public, he has received many calls from others seeking to buy the tower.

Ms. Korval described the purchase by SBA of the Island’s tower as a “win-win” for both the company and the town.

Attorney David Harms, who lives behind the Manhanset Firehouse where a second cell tower has been proposed, has been fighting that installation. But he said he liked what he heard about the tower at the Recycling Center.

He added that he thought there were alternatives to a new tower on Cobbetts Lane where he thinks lower poles could improve communications for firefighters who have said they lack the ability in Hay Beach and the Ram Island communities to call in  backup assistance when they are handling emergency calls.

The plan for the Cobbetts Lane tower is awaiting a hearing before the Town Board and if it passes muster there, would have to get clearance from the ZBA for a variance that would be needed to shorten the distance between a new tower and the rear lot line.

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