PHOTO COURTESY OF VARNUM
By Cynthia Price
Legal News
An Internet search for “cell tower leasing attorney” brings up John Pestle of Varnum or something he has written as the second, third, and fourth entries below the paid advertising.
Pestle is one of a handful of attorneys specializing in this aspect of telecommunications. His skills and long experience mean that he is able to advise a broad range of landowners and companies across the country on how to get the best deal for leasing or selling their cell towers.
For his efforts, he was named the Member of the Year 1996 by the National Association of Telecommunications Officers and Advisors, and given the organization’s Ovation Award twice during the 1990s, as well as its Certificate of Appreciation in 1994. He also received a Special Award of Merit in 2006 for his work to help municipalities preserve local cable franchising and control over public rights-of-way.
Perhaps this should not be surprising considering Pestle’s educational credentials. He graduated magna cum laude from both Harvard with his B.A., and Yale with his M.A., and followed that up in 1975 by receiving his J.D., also magna cum laude, from the University of Michigan Law School.
At that time, he says, “I was licensed to work on radio and TV?transmitters. I put myself through college doing that work. I understand the technology end of it, and that’s very helpful.”
His current practice focuses on representing and advising individual or group property owners on getting the best possible lease if a cell company wants to put up a tower on their property, and on realizing the highest potential for sales of existing towers.
But earning money from a cell tower is not something that comes about as a result of the desire of the landowner or building owner. “One of the two most common questions I get is, ‘How do I get a cell phone tower on my property?’ But the way it works, you don’t call them, they call you,” Pestle says. “Whether the cell phone companies need one or not is driven by engineering concerns.”
He adds, “Cell towers have to be in precise locations, so there’s not a gap. The consideration used to be primarily to avoid dropped calls, but you notice you don’t have that as much as you once did. Now it’s usually because there’s too much traffic in an area, and capacity needs to increase.”
The capacity or traffic issue has only expanded as people expect their smart phones to do more, faster.
The landscape has changed in other ways over the years since cell phones became popular. Currently, a cell tower may be owned by or leased to a management company. In fact, Pestle says, “A few years ago two of the major companies sold around 15 to 20,000 cell towers to a management company, and then leased them back. They found that was just the easiest way to do it.”
Where Pestle comes in is after the first approach, when, he says, the providers and management companies will set forth a deal that is not necessarily in the best interest of anyone but the providers and management companies. “In general, the lease that’s offered you as a property owner will make their use primary and your use secondary. But you’ve got your legitimate needs too; a lot of [lease negotiation] is preserving the value for both sides.”
As far as sales, Pestle cautions that property owners will profit most from selling towers and future leasing rights separately from, and before, they sell the property. He tells of a client wanting to sell an older building with four cell towers on its roof, who realized $2 million for the leasing rights which, if sold as a unit with the rest of the property, would not have added as much.
Pestle gives freely of his expertise and time to such organizations as the Legal Section of the American Public Power Association; the International Municipal Lawyers Association, whose Technology and Franchise Section he chaired from 2007-2009 and also served as an officer in its Municipal Contracts Section and a member of its Legislative Advocacy Committee; the Federal Communications Bar Association; and the Michigan Association of Municipal Attorneys, in addition to a stint chairing the Municipal Lawyers Section of the State Bar of Michigan.
The emphasis on municipal legal work stems from Pestle’s cellular focus as well as from other telecommunications matters that touch cities such as cable franchises and FCC proceedings.
In fact, two important recent Varnum projects include the sale of cell tower leases for an urban school district for almost $7 million, and an agreement for a large urban county to lease antenna sites to a management company resulting in shared revenue.
“These are very complicated cases,” Pestle says. “It’s an urban area, you’ve got older buildings, environmental and municipal laws to contend with, and a whole range of other issues. We always involve a local real estate attorney; we feel that’s absolutely necessary.”
His practice also includes assisting municipalities with zoning, as well as property owners with figuring out zoning constraints. “Everybody wants electricity, they want their solid waste taken care of, but nobody wants the plant or the transfer station near them. In the same way, people don’t want to see the cell towers,” Pestle explains. “So the zoning people are charged with squaring the circle.”
One way around this is to camouflage the cell tower, Pestle adds. He notes that common methods for doing this are to put them inside a church steeple or hide them behind public art. “There’s a place I’d driven past 50-60 times,” he says, “and I started thinking, you know what, that tree looks a little different, so I got out and checked — and it was a cell tower.”
Though Pestle is firmly attached to the Grand Rapids office, as is the other Varnum telecommunications attorney Timothy Lundgren, the countrywide nature of his work allows him to telecommute. “We work on cell tower projects all across the U.S., from New England to Hawaii, from the Northwest all the way to Miami,” he says. “So when I needed to move to Arizona as my parents were taken ill, I could easily telecommute. Basically, it makes no different to clients as long as I answer the phone.”
In addition to his Internet presence and long-term reputation, Pestle says he holds monthly webinars which inform but, secondarily, serve to advertise his services. He also gets a lot of business from past clients; and some people, he says, just get in touch with Varnum because they know of the firm’s general expertise.
Pestle says that another common question is whether the “next big thing” is going to come along and make cell tower infrastructure worthless, often asked as a result of purchasers trying to get an owner to accept lower prices. “But the answer is, as best we can tell, there’s nothing currently out there that could replace it, nothing that’s commercially developable within the next 5 to 15 years. Companies have tried and lost millions. So it’s worth it to negotiate a good long-term deal for yourself.”
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