Fines. Permit denials. Tower removal. These drastic measures could be lurking in the fine print of hundreds of local government zoning regulations around the country. Tower companies, and the wireless carriers that lease space from them, need to be aware of “status-changing” events that could place their operations at risk.
Both prior to and after the changes ushered in with the Federal Telecommunications Act of 1996, there has been an increasing number of transfers of ownership with respect to existing towers. These status-changing events have triggered the need to comply with the stricter local community regulations that have been enacted by many communities during the past five years. Tower owners and operators can avoid difficulties with the local authorities, which, in some communities, may impose fines, deny permits for wireless tower users and in extreme cases, take action to compel removal of the tower at issue.
Existing tower sites are often “grandfathered” from having to comply with more recently enacted tower regulations. However, depending on when a tower transfer occurs and the wording of the local regulations, existing towers may be subject to the new regulations. During the past six years, wireless tower companies have been working at warp speed to build both new tower sites for their wireless customers and acquire large tracts or “trenches” of existing wireless tower sites from the providers of wireless service that want to exit the tower infrastructure business, allowing them to focus on providing expanded wireless voice and data services to their customers.
The sell-off of these existing tower inventories usually results in the tower purchasers taking possession and control of the same, in “as is” condition and “where is” location. Tower company acquisition staff, or in-house or outside counsel, then would perform the normal due diligence check with respect to title, survey, environmental, structural and related investigation. Ideally, a more fine-grained examination of both the local zoning ordinance and resolution would be conducted, which would unearth any related ordinances or resolutions regulating wireless telecommunication towers in that particular community. Wireless telecom tower regulations often are not found in the actual zoning regulation section, but are situated elsewhere in the local community’s code of laws and regulations.
In conducting tower zoning due diligence, it is essential to consider two main items. First, whether the existing tower sites were constructed without meeting all the requirements of the local zoning code, and second, whether or not a change in the ownership of a tower triggers any need to comply with local regulations that may not have been in existence at the time the tower was built, but which may now apply should the existing tower ownership interest be assigned or transferred.
Items requiring attention include, but are not limited to, the following:
Conditional-use permits:
Whether or not a change in tower ownership requires the new owner to apply for a conditional-use permit. In most cases this will necessitate a hearing before the local community’s Board of Zoning Appeals. The Board of Zoning Appeals has the power to deny a permit transfer, even on an existing tower. Tower purchasers should always have clauses in their purchase and sale agreement stating that no purchase price is owed for any tower for which zoning approval cannot be obtained, and/or have said money put into an escrow fund pending zoning approval.
Cost:
Careful attention should be paid to the local zoning ordinance or resolution to ensure that tower ownership transfers do not trigger the new owner’s obligation to comply with the local community’s more stringent tower regulations that were enacted since its original construction. Some of those requirements can add one-time and/or recurring costs to the new tower owner such as:
(a) Paying an annual tower registration fee of up to $1,000 per year;
(b) Presenting a certificate to the local building authority showing that the tower is structurally sound as evidenced by a certificate of inspection from a licensed structural engineer (again, a potential $1,000 fee);
(c) Annual presentation of a certificate of public liability insurance to the local authorities that establishes proof that the tower owner has insurance coverage to pay for any personal injury or property damage claims presumably arising from either tower structural failure, ice damage or injury caused by falling ice, or other mishaps,
(d) Installing safety and aesthetic screening at the tower site with local community-required fence screening, trees or shrubbery, or
(e) Annually filing a notice of tower ownership with the local authorities (much of the time there is no fee involved).
Sanctions:
It is risky to assume that the local governing authority will not take action against a new owner of a transferred existing tower. This “head in the sand” strategy is a bad one. In the course of reviewing hundreds of zoning and telecommunication ordinances and resolutions in Ohio, we discovered some of the following requirements and sanctions that local governments could impose:
(a) An annual registration fee, required proof of insurance, structural engineering inspections and landscaping requirement(s);
(b) A citation, which could result in a fine; and
(c) Permit denial, preventing a wireless telecommunication user to attach an antenna and otherwise make their wireless system operational.
It’s plain to see how a lack of zoning due diligence in the tower acquisition process can come back to haunt a tower owner/transferee. Very often, the issues cited above can lay dormant, not just for months, but for years before becoming problematic. No tower owner/operator wants to have wireless tower users/licensees signed up and ready to go, only to have to tell their customers “you’ll have to wait a month … or four, until we get the local regulations worked out.” With a little tower-zoning due diligence and planning, a lot of future headaches with local zoning and building officials can be avoided, helping to assure a more productive and profitable tower-acquisition program.
Michael R. Rankin, Esq., is counsel with Hahn Loeser + Parks L.L.P., Columbus, Ohio. Rankin is Chair of the firm’s Telecommunications Practice Group and can be reached at mrrankin@hahnlaw.com
