Akron jumps at $11 million telecom lease deal to fill budget hole

In Daily News Briefs by Wireless Estimator

The city of Akron, Ohio has completed the sale of 15 lease agreements to Pittsburg, Pa.-based EIP Communications and will receive $11 million.  City leaders were expected to move forward with the deal since they had already spent about $6 million that they had earmarked from the sale when they passed their 2017 budget nearly a year ago.

The city sold the 15 lease agreements it had with telecommunications companies that use space on 13 publicly owned properties: a parking deck on Opportunity Parkway; the rooftop of the downtown CitiCenter building; the sides of four water towers, two of which have two leases; and seven city parks and open spaces.

Akron has been making around $480,000 a year on those leases.

EIP’s bid was the highest of 11 submissions the city received for the 50-year lease deal. The 15 agreements expire between 2023 and 2028. EIP has approximately 12 employees.

The additional $5 million the city received from the sale will go into a “rainy day fund” that ideally should be $27 million and is only at $5.2 million. By increasing it to $10 million, bond rating agencies might look at the Akron’s financial condition more favorably, or at least not downgrade it which would raise the city’s borrowing costs.