The city of New Port Richey can make money from thin air -- up to $360,000 a year, eventually -- by leasing some sod.
For a council confronted with a $375,000 general fund deficit last summer while cobbling together the city's 2011 budget, the windfall is a godsend.
Or, at least, an old-school economics lesson in generating revenues from emerging technologies: There's ever-increasing demand for cellular service, but ever-diminishing land for cell towers.
The city has land.
Tuesday unanimously approved a first draft of a proposed 25-year exclusive master agreement with Collier Enterprises II, LCC, of Tampa, to erect cell towers on city-owned property.
Collier Enterprises is looking at leasing "five or six" city-owned sites to erect 150-foot tall cell towers, said .
Each of the sites' towers could support cellular services for up to six different providers, he said, noting Collier Enterprises would pay the city $10,000 to $15,000 a year for every provider using the towers.
Last July, during stressed budget deliberations, the city's Information Technology and Communications Director Clark Jones told the council that a single cell tower site could net the city more than $60,000 a year.
The revenue-generating potential for the city is too good to pass up, Councilwoman Ginny Miller said, noting that when it was discussed during a December workshop, the council was eager to make a deal. "It was all systems go," she said. "Some of our budget is relying on this income."
Not so fast, City Attorney Michael Davis said. The master agreement is merely a procedural precursor to negotiating leases for individual sites, he said.
In fact, Davis suggested, the council should not formally approve the master agreement until negotiations for individual leases with Collier Enterprises are "well under way." The soonest that will be, he said, is May.
The master agreement and subsequent individual leases are modeled after contracts with Collier Enterprises approved in 2006 by the Hillsborough County School Board, Davis said.
To erect towers on school campuses, Collier Enterprises pays the school district 50 percent of the rental revenues.
Last year, according to Collier Enterprises, the cell towers generated $143,000 for the district; this year, $230,000; next year, nearly $500,000.
The prospect of building cell phone towers on school campuses often fosters controversy, with some claiming the radiation and radio frequencies (RFs) emitted by them endangers young children.
Those fears will be addressed when each individual lease is reviewed by the City Council.
Site locations will be scrutinized "on a case-by-case basis," Miller said. "If there is something proposed for you neck of the woods, there will be a public hearing."