DATE: April 12, 2022
SUBJECT:
Title
ASSIGNMENT OF TIDELAND USE AND OCCUPANCY PERMIT, WITH CONSENT TO SUBLEASE, FOR WIRELESS COMMUNICATION EQUIPMENT LOCATED BEHIND THE SAN DIEGO CONVENTION CENTER AT 224 MARINA PARK WAY, CITY OF SAN DIEGO
A. RESOLUTION CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF A TIDELAND USE AND OCCUPANCY PERMIT FROM SPRINT PCS ASSETS, LLC TO VB RUN, LLC FOR WIRELESS COMMUNICATION EQUIPMENT
B. RESOLUTION CONSENTING TO A SUBLEASE THROUGH SEPTEMBER 30, 2025, WITH ONE FIVE-YEAR OPTION TO EXTEND THE TERM FROM VB RUN, LLC TO SPRINT PCS ASSETS, LLC FOR WIRELESS COMMUNICATION EQUIPMENT
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EXECUTIVE SUMMARY:
Sprint PCS Assets, LLC, a Delaware limited liability company (Sprint) occupies one wireless communication equipment site, located behind the San Diego Convention Center at 224 Marina Park Way in Embarcadero Marina Park South under a Tideland Use and Occupancy Permit (TUOP) (District Clerk Document No. 56867). The TUOP currently expires September 30, 2025 with one, five-year option to extend the term, which if exercised would extend the expiration date to September 30, 2030. Sprint is proposing to assign its rights and obligations under the TUOP to VB Run, LLC, a Delaware limited liability company (VB Run), which is a subsidiary of Vertical Bridge, REIT, LLC a Delaware limited liability company.
Conditioned on the approval of the Board of Port Commissioners (“Board”) of the assignment of the TUOP, VB Run will assume the ownership interest of the above referenced wireless communication equipment currently owned by Sprint and in turn, VB Run will sublease the equipment back to Sprint for the remainder of the term of the TUOP.
RECOMMENDATION:
Recommendation
Adopt a Resolution consenting to the Assignment and Assumption of a Tideland Use and Occupancy Permit from Sprint PCS Assets, LLC To VB Run, LLC for wireless communication equipment located behind the San Diego Convention Center at 224 Marina Park Way; and,
Adopt a Resolution consenting to a Sublease through September 30, 2025, with one five-year Option to extend the term from VB Run, LLC to Sprint PCS Assets, LLC for wireless communication equipment located behind the San Diego Convention Center at 224 Marina Park Way.
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FISCAL IMPACT:
There is no direct fiscal impact from this item.
This agenda item is subject to Board of Port Commissioners Policy No. 106 - Cost Recovery User Fee Policy.
Compass Strategic Goals:
This agenda item supports the following Strategic Goals.
• A Port that the public understands and trusts.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
Background
Sprint has a TUOP with the District for the operation and maintenance of wireless communication equipment located at Embarcadero Marina Park South, in the City of San Diego (as shown on Attachment A). The site includes approximately three hundred fifty (350) square feet for the tenant's equipment (Equipment Space) and approximately 25 square feet east of the Equipment Space for Tenant's antennas. The TUOP’s term commenced September 7, 2010 and will expire September 30, 2025. There is one remaining five-year option to extend the term, which if excised, would expire September 30, 2030. Sprint is currently under contract to sell and assign its ownership interest of the TUOP to Vertical Bridge REIT, LLC, which is the direct owner of VB Run and consists of investment grade and institutional investors, including the following: Goldman Sachs Group; California Teachers Association Employees’ Retirement Benefits Trust; Caisse de depot et placement du Quebec (DCPQ); and several private equity investors. Please see Attachment B for the ownership structure of Sprint PCS Assets and VB Run, LLC.
Should the Board approve of the assignment of the TUOP, VB Run proposes to operate and maintain the wireless communication equipment at the same standards and in the same location that currently exist, via a sublease back to Sprint. Please see Attachment C, Existing and Proposed TUOP Information Summary.
Conclusion and Recommendation
The proposed assignment and assumption of the TUOP to VB Run is consistent with BPC Policy No. 355. Staff recommends the Board consent to an assignment and assumption of the TUOP to VB Run and a sublease back to Sprint.
General Counsel’s Comments:
The Office of the General Counsel has reviewed this agenda sheet and the attachments presented to it and approves the same as to form and legality.
Environmental Review:
The proposed Board actions, including without limitation, assignment and assumption of a Tidelands Use and Occupancy Permit to VB Run, LLC with consent to sublease to Sprint PCS Assets, LLC for the installation, operation, and maintenance of a wireless communications facility was adequately covered in the Final Negative Declaration for the Sprint Embarcadero Marina Park South Telecommunications Project (SCH# 2014081004; UPD# ND-2014-70), prepared and adopted/certified by the District on October 14, 2014 pursuant to Resolution No. 2014-202. The proposed Board actions are not a separate “project” for CEQA purposes but is a subsequent discretionary approval related to a previously approved project. (CEQA Guidelines § 15378(c); Van de Kamps Coalition v. Board of Trustees of Los Angeles Comm. College Dist. (2012) 206 Cal.App.4th 1036.) Additionally, pursuant to CEQA Guidelines Sections 15162 and 15163, and based on the review of the entire record, including without limitation, the Final Negative Declaration (SCH# 2014081004; UPD # ND-2014-70), the District finds and recommends that the approval of the assignment and assumption of a Tidelands Use and Occupancy Permit does not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the FND due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; and 2) no new information of substantial importance has come to light that (a) shows the Project will have one or more significant effects not discussed in the FND, (b) identifies significant impacts would not be more severe than those analyzed in the FND, (c) shows that mitigation measures or alternatives are now feasible that were identified as infeasible and those mitigation measures or alternatives would reduce significant impacts, and (d) no changes to mitigation measures or alternatives have been identified or are required. Because none of these factors have been triggered, the District has the discretion to require no further analysis or environmental documentation (CEQA Guidelines §15162(b)). Pursuant to CEQA Guidelines §15162(b), the District finds and recommends that no further analysis or environmental documentation is necessary. Accordingly, the proposed Board actions are merely a step in furtherance of the original project for which environmental review was performed and no supplemental or subsequent CEQA has been triggered, and no further environmental review is required.
In addition, the proposed Board actions comply with Sections 35 and 87 of the Port Act, which authorizes the Board to do acts necessary and convenient for the exercise of its power; and allows for the construction, reconstruction, repair, and maintenance of highways, streets, roadways, bridges, belt line railroads, parking facilities, power, telephone, telegraph or cable lines or landings, water and gas pipelines, and all other transportation and utility facilities or betterments incidental, necessary, or convenient for the promotion and accommodation of any of the uses set forth in this section. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board actions are consistent with the Public Trust Doctrine.
Finally, the proposed Board actions were covered in the Non-Appealable Coastal Development Permit for the Sprint Embarcadero Marina Park South Telecommunications Project (CDP-2014-03) approved by the District on October 14, 2014 pursuant to Resolution No. 2014-203.The proposed Board actions are consistent with the project in Coastal Development Permit (CDP-2014-03). No additional action under the California Coastal Act is required at this time.
Diversity, Equity, and Inclusion Program:
This agenda item has no direct DEI impact on District workforce or contract reporting at this time.
PREPARED BY:
Christian Anderson
Program Manager, Real Estate
Attachments:
Attachment A: Location Map
Attachment B: Proposed VB Run/Sprint Ownership Structure
Attachment C: Existing and Proposed TUOP Information Summary