Should Your Church Consider a Cell Tower Lease?

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Should Your Church Consider a Cell Tower Lease?

A sales rep stops by your church office with a simple offer. Your building is ideally suited to be a cell phone tower. The equipment will be practically invisible. If you lease the space to install it, your church will earn $2,500 per month.

Sounds tempting, doesn’t it? Imagine the ministry that this additional revenue could fund. Is the opportunity legit? More than three years ago the Los Angeles Times reported that increased demand was prompting cell phone providers to get creative about where to put their transmitters and antennas:

Wireless companies are hunting for new sites as they scramble to close gaps in phone reception and expand their networks to meet the explosion of smartphones and tablets. Conventional cellphone towers in neighborhoods are often opposed as eyesores, and sometimes banned. Churches offer an alternative.

Churches have actually been saying yes to opportunities like this for decades. The Times article cites one in La Habra, California, that’s been doing it for twenty years. The article also includes a cautionary word from an attorney who specializes in these kinds of leases:

Legal experts say ministers and other church leaders should read the fine print closely when considering a carrier’s offer. “Often church people are entirely too trusting,” said John W. Pestle, a Tucson-area lawyer who frequently advises property owners who are considering hosting cell sites.

Pestle wrote on the topic for his law firm’s website. “Considerations for Church Cell Tower Leases” lists fourteen ”practical points churches should consider if they are approached about a cell tower lease, amendment or buyout.” Several of them speak to negative aspects of these kinds of leases, including:

Taxes. Check out whether the church will have to pay income tax on the rent it gets, or whether it may lose other tax exemptions. For example, if it now has to pay real estate taxes, make sure they’re reimbursed by the cell company.

Don’t Mortgage the Church’s Future. Cell leases typically make the cell company’s use of church property primary and church use secondary. This is often hidden in the fine print. Such terms can limit or prohibit future expansions or changes that are needed for the church to fulfill its mission. Buyouts … are even worse on this. Make sure such terms are stricken or changed so church use is primary and the “tail does not wag the dog.”

Lender Approval. If a church has a mortgage, typically the lender will have to approve the lease. Investigate this first. If the lender vetoes the deal or demands extensive changes it’s usually because the terms were harmful to both the church and lender. Make sure the cell company covers the church’s costs if its lawyer has to revise or redo the lease to get lender approval.

So it turns out cell tower and antenna lease offers are anything but simple. To avoid entering into a contract that has the potential to hamper your ministry, Pestle suggests consulting someone who has experience with these agreements before you start negotiating one.

 

Reprinted with the permission of the Evangelical Christian Credit Union.

By | 2016-10-12T10:59:28+00:00 September 13th, 2016|Banking, Great Buildings, Legal|

About the Author:

Jac La Tour

Jac La Tour began his career as a journalist and communications professional and moved into vocational ministry by joining the staff of Insight for Living. He then served nine years at EvFree Fullerton as their communication director and four years as a pastor on their adult ministries team. He then took a pastoral role at LakeView, an Evangelical Free Church in Stoughton, Wisconsin. Now back in Southern California, he works as a freelance writer, editor and storyteller.