Wireless Site Acquisition Contracting
In the wireless infrastructure business, three models explain contracting for site acquisition:
The first model is wireless carriers contracting multi-national program management firms,
tower companies, equipment suppliers, and site acquisitions individuals or firms to perform
In the second model, multi-national program management firms, tower companies, and
equipment suppliers may be the entities contracting site acquisitions individuals or firms
as direct contractors or subcontractors of a wireless carrier.
In the third model, site acquisitions firms contract individuals to perform acquisition services
Employment of Individuals vs. Contracting
Performance of site acquisition responsibilities as an employee, paid by W-2, yields a salary or an hourly rate plus benefits and, maybe, eligibility for a bonus. Non-disclosure, non-compete statements, and agreement to company policies in writing are expected. Wireless carriers, site management companies, turf vendors, and equipment manufacturers often enlist employee leasing agencies to hire hourly temporary help. The job opportunity may only have a specific time frame or could lead to permanent employment, known as contract-to-hire (C2H) or contract-to-permanent (C2P). Employees in clerical or coordinator jobs are often given opportunities to perform coordinator roles in site acquisition. Companies are hesitant to hire full-time personnel for site acquisition responsibilities without a proven track record.
Wireless carriers, tower companies, turf vendors, and equipment manufacturers commonly contract site acquisition services with site acquisition individuals or companies using consultant agreements. Tower companies, equipment manufacturers, and turf vendors compete with each other and site acquisition companies to perform site acquisition services for wireless carriers. Site acquisition contracts express the client’s desire to utilize the consulting services and the consultant’s agreement to perform services for the client.
Milestones or Pay Points
Milestone compensation is not payable until documentation is submitted that the milestone event has been satisfactorily achieved. Milestones are billed on a project-by-project basis. Separate invoices may be required for the same milestone achieved on different projects. Again, be in the habit of quickly submitting invoices as each milestone can be verified. It may be helpful to list actions taken, approvals granted, and other events building up to milestone completion. Based on the project and the milestone amounts, expenses may not be eligible for reimbursement beyond a collectible pay point. Most reputable companies routinely pay compensation and reimburse expenses in twenty-one to thirty days.
New Build Milestones
1st Milestone Category—Site Selection and Submittal of a Site Candidate Information Package (SCIP)
The initial due diligence work results in a SAR. This is a report regarding the nature of the search area including three or more qualified candidate locations. Upon review of the SAR by the project team, a single macro site or multiple microsites are selected for development. Due diligence and identification of the best candidate sites usually pay more than other milestone categories because of the nature of initiation, drumming up willing property owners, and doing original research. The quality of the SAR and the SCIP is a critical factor necessary to get the project off on the right foot. For more on SARs and SCIPs see Module 13 Search Area Report (SAR) and Module 15 Site Candidate Information Package (SCIP).
The following three SCIP sub-milestones apply if the general pay point is split into partial tasks, as may be the case.
Search Area Report (SAR)–Only Pay Point
A SAR-only pay point applies if the client delays site selection after receipt of the SAR or is otherwise willing to pay for the SAR separately. The value of a well-researched SAR may have a limited shelf life. SAR due diligence is normally 90 percent of what goes into a SCIP. A new SAR pay point is appropriate when a search area is moved or relocated. Negotiation is fair for substantial partial completion of an original SAR or partial overlap of two search areas.
SCIP-Only Pay Point
A SCIP-only pay point applies if the SAR milestone is paid separately or if another person researched and prepared a valid, current SAR, but that person isn’t available to prepare the SCIP after site selection.
Shortly before or after site selection, certain members of the project team typically conduct a site tour, also known as a site visit, site walk, or site technical review. One purpose of this physical visitation is to fix and agree on the proposed space with the team and property owner present. This pay point compensates for the time required to coordinate, travel, and initiate the project for the other team members if this isn’t taken into consideration as part of the first general milestone. For more on the project team, site-visitation see Module 16 Project Initiation.
2nd Milestone Category—Agreement Execution for Space Rights
Wireless clients prefer that space rights agreements are signed and notarized, also known as execution, by the property owner first (partial execution). After all due diligence is reviewed and regulatory compliance is complete, the wireless developer fully executes the agreements. Conversely, existing structure owners often require the carrier to execute the agreements first. For more on a lease execution, see Module 23 Collocation Agreements and Module 27 Final Space Rights.
Partial or Full Execution
Partial and full lease execution may be two separate pay points. It’s common to qualify for the lease pay point upon submission of a property owner’s signed agreement that has been pre-approved by the client and prepared by the project attorney. Another pay point may be available after the full execution of the agreement. Full execution of space rights is discussed in greater detail in Module 27 Final Space Rights.
Option or Letter of Intent
Short of securing a partially or fully executed agreement for space rights, it might be appropriate or the wireless facility developer may suggest that a lease option, a purchase option, or letter of intent (LOI) be obtained from the property owner. Since the option is intended to be enforceable while the LOI is not, the compensation for an option can be expected to pay more. In either case, the client is likely to specify its preference. Options and LOIs are discussed in greater detail in Module 21 Initial Space Rights.
Temporary Site Lease
Agreements established for short-term periods to place temporary cell sites in the vicinity of events promising to draw many thousands of spectators or participants don’t require as much due diligence as permanent facilities do. Temporary sites are compact mobile cell sites. The pay point for securing a partially or fully executed lease for a temporary site may pay less than for a permanent site build. For more on temporary sites see Module 4 Wireless System Design; Module 21 Initial Space Rights; Module 26 Miscellaneous Agreements; and Module 28 Local Permit Applications.
Additional Agreements Executed
Separate Ground and Structure Space Leases: Some sites require additional agreement(s). One example is when space is leased on an existing structure but the owner doesn’t control enough space for a carrier’s associated equipment. A second site agreement may be needed on the adjacent property.
Tower companies are prone to take it upon themselves to negotiate for an expanded site footprint to accommodate the new carrier. If a carrier owns the structure, it is more likely to require another carrier on the site, a competitor, to negotiate for its own adjacent ground space. A separate space lease then becomes necessary in addition to the structure space lease. For more on separate ground and structure space leases see Module 11 Lease-ability.
Another example is if the access road needs to cross property owned by another party or entity or if moving the access road to another property could shorten its length, saving construction cost and maintenance expense, making site access easier. These scenarios could also apply to utility easements for the extension of power, telephone, and fiber-optic service connections. For more on easements see Module 11 Lease-ability and Module 26 Miscellaneous Agreements.
Non-Disturbance and Subordination Agreements:
Besides a separate space agreement or easement, project legal counsel may ask for agreements to be signed that would remove the risk that a mortgage company, existing tenant, or an underlying landowner may take action to disturb the wireless space rights. For more on subordination and non-disturbance agreements see Module 22 Leasing Concepts and Module 26 Miscellaneous Agreements.
3rd Milestone Category—Zoning Approval
The invoicing for zoning approval, one component of local permit rights, occurs with documentation from the appropriate jurisdiction authority in their official minutes or other official correspondence. For more on zoning approval see Module 28 Local Permit Applications; Module 29 Planning Staff Review; Module 30 Community Due Diligence; and Module 31 Local Governing Bodies, Public Hearings, and Final Documentation.
Below are variations of zoning approval. Not all variations apply to every project. For instance, item A is mutually exclusive of items B, C, and D.
No Zoning Letter
If there will be no zoning approval requirements, a letter from the jurisdiction verifying the details should be obtained. If this is true, there are no other zoning pay points on this project. For more on no zoning, letters see Module 9 Zone-ability; and Module 15 Site Candidate Information Package (SCIP).
Jurisdictions that offer incentives for collocating on existing structures often use administrative approval as the process to grant permits without public hearings. Incentives might be available for low structure height or microcell site development as well. For more on administrative approval see Module 9 Zone-ability; Module 15 Site Candidate Information Package (SCIP); and Module 29 Planning Staff Review.
Zoning Permit Application
Completion and submittal of the zoning permit application may qualify as a pay point. The outcome of the application may take months. Wireless clients often decide to apply for a site that is less likely to be approved because the site more closely meets the objective than one that would be easier to get approved. Zoning denials may not be the site acquisition consultant’s fault. Qualifying the application as a pay point is one way to compensate for applications that get denied. For more on zoning applications, see Module 15 Site Candidate Information Package (SCIP) and Module 28 Local Permit Applications.
Public Hearing Representation
A public hearing or two are normally required for zoning approval. If attendance is advisable at more than a couple of public hearings, each additional attendance may qualify for a pay point. Extra hearings may be necessary if a jurisdiction needs more time or information to make a decision. City council and county board decisions require a quorum. Sometimes inclement weather, travel schedules, or illness makes a quorum difficult to obtain. Extra hearings often result from local opposition. For more on public hearings see Module 15 Site Candidate Information Package (SCIP); Module 30 Community Due Diligence; and Module 31 Local Governing Bodies, Public Hearings, and Final Documentation.
4th Milestone Category—Building Permit Approval
A building permit, the second component of local permit rights, is itself evidence the building permit approval milestone was obtained and qualifies for payment. The A&E, the construction manager, or the general contractor may get assigned the responsibility of obtaining the building permit. For more on building permits see Module 15 Site Candidate Information Package (SCIP); Module 28 Local Permit Applications; and Module 31 Local Governing Bodies, Public Hearings, and Final Documentation.
It may be necessary to verify that no additional local permits are required. The following building permit sub-milestones may exist.
Driveway or Highway Approach or Entrance Permits
A driveway or highway entrance or approach permit may be necessary for site access or as a prerequisite for building permit approval. Procurement of a highway approach or entrance permit or a driveway permit may qualify as a pay point, like a building permit milestone. For more on driveway and highway approach and entrance drawings and permits see Module 15 Site Candidate Information Package (SCIP); and Module 20 Site Design—Supplemental Drawings and Reports.
Building Permit Expiration Update
Building permits are usually issued with an expiration, ranging from six months to two years. Wireless companies don’t build all sites within two years of securing real estate entitlements. A building permit update or renewal qualifies as a pay point. The building permit renewal may be simple or complex depending on the jurisdiction. This is discussed further with Site Development Process #15 about Periodic Reviews.
Collocations originate with an inquiry, verification of tower (and, possibly, ground) space availability, site selection by the project team, submittal of a collocation application with the site sketch, and an application fee to the structure owner. The application includes detailed information regarding the proposal. Preliminary approval of the application may be returned within three to five weeks.
Upon preliminary approval, a structural analysis (SA) is ordered. A draft SLA becomes available for review. Once the structural analysis process is complete a determination is made whether structural modifications (mods) are to be made to the antenna structure. If they are, the extent of the mods is determined, and if the cost proposal is acceptable to the parties, they are ready to proceed to complete the SLA.
Site Modification Milestones
Site mods occur on either owned or leased structures. Owned structure mods involve review of the ground lease terms. Leased structure sites are also known as collocations. The initial collocation on a structure represents additional loading to someone else’s structure. Subsequent collocation mods change the loading from the original collocation agreement. Site mods add, replace, or otherwise reconfigure equipment.
5th Milestone Category—Site Modification or Maintenance Project
The milestone pay points listed below apply for maintenance or mods of prior collocations and maintenance or mods on owned structures.
Site Mod File Review
To initiate site mod projects, a review of previous site agreements, drawings, and permits takes place. These are analyzed to determine what actions need to be taken to complete the project. This is referred to as a file review or audit. Regarding existing site agreements, the site mod action is typically just to make a notice, obtain a signed consent, or negotiate an amendment with the property or structure owner. The permit portion of the audit regards a determination of action required by the jurisdiction for approval of the mod.
Site Mod Notice
The language of the existing space rights agreement points to when and if notification (i.e., a notice) is the only requirement for a modification. If so, write the notice and document its delivery. Courtesy notices are an option even when notification is not specified in the site agreement.
Site Mod Written Consent
The site agreement language may say mods can be made only with written consent. A standard consent form will be created for each mod project. Drawings may be attached to the consent for the owner to sign and return. Consents are typical when the quantity, size, and weight of existing equipment on a site will not be increased, such as a maintenance or equipment replacement project or when the original agreement contemplated the change but it hadn’t been implemented yet.
Consents do not constitute a reason to compensate a site or property owner. The language “such consent shall not be unreasonably withheld or delayed” is often found with a requirement for a written consent. The spirit of requiring a consent for mods is that they don’t significantly change the original agreement. Site owners don’t always agree. They may hesitate, thinking they can get more money. One strategy that has worked for me with hesitant or difficult property owners is to get them to sign the simple, little consent by minimizing its big-picture importance to them.
Site Mod Amendment
Mods that mandate revised drawings for an exhibit to the space rights agreement require an amendment. The lease area might need to be increased. If the mods will increase size, weight, or amount of antenna attachments or change their locations, a study of the impact is standard procedure, as well as a rent increase. The strength capacity of structures can be measured. Every increase in loading decreases available structural capacity for other carriers. If mods reduce or don’t change the size, weight, or amount of attachments and maintain their locations, no study is necessary. Amendments without rent increases are common if loading isn’t increased.
Site Mod Zoning
As with the zoning pay points listed above, mod projects require zoning approval or verification that no zoning approval is required. As discussed in Module 1 Industry Structure Section 6409(a) of the Middle-Class Tax Relief and Job Creation Act of 2012 may preclude the local jurisdiction from imposing a discretionary zoning process if the mods proposed do not substantially increase the existing wireless facility. Nevertheless, local zoning needs to be confirmed and documented.
Site Modification Building Permit Approval
Building permit approval or documentation that no building permit is required is a pay point for work on site modifications and maintenance projects to replace existing equipment, as with new builds. This pay point might or might not receive the same compensation for a site modification as it would for a building permit for a new build project. Whichever is the case, documentation is required for payment of the milestone. Section 6409(a) of the Middle Class Tax Relief and Job Creation Act of 2012 does not preclude local jurisdictions from imposing a standard building permit process for modifications of any type.
The first three modules summarized the context for performing cell site acquisition and permitting within the wireless infrastructure industry project management environment, including industry culture, job details, and compensation opportunities. Milestones provide a glimpse at work products. The next three modules discuss wireless systems nomenclature, the standard components of a wireless facility, and the design of search areas for wireless site acquisition assignment.