Agenda Item No. ______________
Washburn University Board of Regents
SUBJECT: KTWU Tower Replacement
DESCRIPTION: The current KTWU tower is over 40 years old. Numerous structural studies including those conducted in May of 1990, December 1998, and April 1999 conclude the tower cannot support additional antennae including the new antennae required for digital broadcasting. Federal law mandates we begin digital broadcasting in mid 2003. A new tower is essential to this conversion.
In November of 1999, Washburn began actively seeking a solution for the replacement of the existing KTWU tower. The initial assumption was it might be possible that a new tower with other broadcast tenants could be provided to Washburn at no or little cost or risk to the university.
In January of 2000 a Request for Proposal (RFP) was completed soliciting tower manufactures interested in building a tower which could be shared by multiple broadcasters at the present KTWU site. That proposal included a "reversion clause" that transferred the ownership of the tower to WU at the end of 25 years. Five tower builders were solicited and only one bid received that was far outside acceptable cost parameters. All proposals were rejected.
Nations Media Partners were subsequently engaged to assist WU in securing a tower solution with commercial tower operators. A second RFP was developed and distributed to 13 companies. In March 2001, only one, Richland Towers, submitted a proposal.
Richland Towers proposes to enter into a landlord-tenant relationship under which the University would enter into a ground lease for the construction by Richland of a new 969' tower and a 6,000-8,000 sq. ft. transmitter building (and/or remodel the existing building) and dismantle the old tower on our current tower site. Richland would then lease space on the tower to the University for our antennae. Richland will make ground lease payments after the first 10 years. Ground lease payments after the first ten years would be at a fixed monthly rate with periodic increases. The proposal calls for Washburn to make an initial payment of $1,000,000, half in each of two consecutive years, toward the approximately $3.9 million cost of the construction. The $1 million payment will be considered discounted pre-paid rent on the tower for the entire term of the agreement. The lease would have an initial term of 40 years, automatically renewable for an additional 40 year term. In 2001 dollars, the equal value of tower rent for the initial 40 years of the lease is $2.8 million, thus making this a low cost alternative to building and operating our own tower.
FINANCIAL IMPLICATIONS: The $1,000,000 cost to the University will be funded from state and/or federal grant monies.
RECOMMENDATION: President Farley recommends the Board give the administration authority to negotiate and enter into contract for ground and tower leases for this project.
(date) Jerry B. Farley,