Riverhead Town’s 2013 move to increase the rents its charges to cellular companies that lease space on town water towers has now resulted in yet another federal lawsuit against the Riverhead Water District claiming breach of contract.
The latest lawsuit comes from Sprint Spectrum Realty Company, which leases space on the Pulaski Street tower, the Route 58 tower across from the former Walmart site, and on a tower on Great Rock Drive in Wading River.
Last year, Metro PCS and T-Mobile Northeast sued the town, claiming the town was trying to “strong-arm” them into agreeing to pay more for their leases.
The claims in all three lawsuits are similar, and the same law firm — Porzio, Bromberg & Newman, PC, of Manhattan — represents all three companies.
The lawsuits stem from a 2013 move by the Riverhead Town Board, which is also the board of the Riverhead Water District, to hire a Garden City-based company called Bench Strength Partners to examine the cell tower leases and the payment histories of the cellular companies leasing space from the town and to try and increase the amount paid to the town, should they determine that the town is not charging enough or is owed money.
According to the agreement, the amount that BSP is paid by the town is determined by a percentage of the amount of additional money they make for the town by renegotiating with the companies.
In the Sprint Spectrum lawsuit, filed on Feb. 24 in US District Court Eastern Division, Sprint claims that BSP refused them access to the towers and refused to allow them to make equipment upgrades unless Sprint agreed to shorten their current lease, eliminate their current right of cancellation if certain events occur, and to pay “substantially more rent to the Riverhead Water District by upwards of 78 percent of the current rental amounts.”
Sprint says “this holdup tactic is a breach of the leases.”
In the lawsuit, Sprint says its current equipment has become dated and is only compatible with 3G technology, whereas the demand for greater speeds and signal powers brought on by the proliferation of wireless devices and video content requires 4G LTE technology.
Sprint is currently paying annual rents of $46,332 for the Route 58 tower, $55,786 for the Pulaski Street tower; and $45,060 for the Great Rock Drive tower, according to court documents.
In a 2013 Town Board work session discussion when the town was first considering hiring BSP, Frank Clerkin of BSP told the Town Board that his company examines the leases and the payment histories of cellular companies and if they find something they feel is too low, they seek to increase it.
Councilwoman Jodi Giglio said at the time that many of the cellular leases the town has are old and need to be renewed because cell tower infrastructure and technology have advanced so much.
“We’re not getting our fair share of the fees,” she said at the 2013 work session. “Every time they make an amendment, they are supposed to report to the town and the town is supposed to get increased fees.”
Sprint claims their leases with the town state that they, “shall have the right to make any improvements, alternations, or additions upon or to the fenced area required for Lessee’s use,” and the scope of the upgrade work at issue “is modest and contains the same basic footprint.”
Their lawsuit accuses the town to breach of contract, and is asking the court to force the town into allowing them access to the three towers so they upgrade their equipment.
The lawsuit also unspecified compensatory damages, the exact amount which would be determined by trial.
In addition, they are asking for attorney’s fees and other costs associated with the case.
Asked for comment, Supervisor Sean Walter said he cannot comment on litigation.
Photo caption: The Pulaski Street water tower, one of three on which Sprint Spectrum has cell equipment. Photo by Tim Gannon