Public Sector Solutions

Working With State and Local Governments to Solve Budget Problems

The recession has created severe budget problems for many state and local governments nationwide. Many government workers have been furloughed or laid off, and in some instances essential public services have been curtailed.

APWIP works with governments across the United States to help address budgetary shortfalls. We do so by assisting governments with privatizing their “non-core” assets. Specifically, APWIP helps state agencies and municipalities turn their cell site leases into cash.

What leases are you referring to? During the last 10-15 years, states and municipalities have leased both rooftop space and land to wireless carriers. The carriers have placed antennae on these cell sites, and usually pay monthly rent for the use of the site.

What, specifically, is APWIP offering relative to these cell sites? APWIP is offering to pay a significant, up-front lump sum for the right to receive future cell site rent for a fixed period of time (typically 30-40 years). Subject to “due diligence” standards, APWIP will provide this payment relative to leases with most major wireless carriers and tower companies. We do not limit our interest to only a few of the very largest carriers and tower companies, and therefore provide state and local governments with an expansive opportunity to “monetize” site leases. This can result in a substantially higher up-front cash payment than would otherwise be available. Carriers and tower companies typically have the right to terminate cell site leases with 30-90 days’ notice, so in making this payment termination risk is assumed by APWIP.

If our leases can be terminated, why does APWIP want to buy them? The price offered by APWIP for future rent is discounted to take into account the potential risk of site termination. In addition, APWIP seeks to compile a diversified portfolio of leases to mitigate the impact of future site terminations.

What are APWIP’s terms? Assuming a government cell site meets APWIP’s due diligence criteria, the up-front lump sum payment to the government is unconditional and unrestricted. Future site rent will be assigned for a limited, agreed-upon, fixed period of time. At the end of the lease prepayment period, the government can seek another lease prepayment or, alternatively, begin receiving periodic rent as it has in the past.

Can you summarize the benefits? Yes. By providing state and local governments with an opportunity to privatize cell site leases, a significant amount of cash can be raised immediately. In addition, the government would effectively mitigate any risk of future site termination.