The next time you pass a church, look up and take a closer look at its steeple. There is a reasonably good chance it’s a cell phone tower.
Churches have been loading wireless antennas on their steeples, bell towers, and spires, and also on rooftop crosses, trees, and billboard signs on the property. In some cases, cell phone companies, which are under pressure to find new cell phone tower sites, have sought out the church for its location. But sometimes churches are also marketing their own buildings. Some churches have even designed their buildings with the intent of attracting wireless providers, so they can secure a steady income from the leases.
Churches Earn Significant Revenue from Cell Phone Towers
It is easy to see why churches plan ahead for this, as they can make a lot of money. For example, in California, the Canyon Creek Presbyterian Church in San Ramon reportedly went looking for wireless companies when it built a new church just a few years ago. It wound up with a deal with T-Mobile, which reputedly pays the church as much as $30,000 annually.
While this is not a new trend, more churches have had the opportunity to make deals as wireless providers add sites. Some churches reached agreements with companies many years ago. The Trinity Presbyterian Church in Spring Valley put cellular equipment in its sanctuary roof nearly 25 years ago. The church has since loaded antennas on a 75-foot-tall cross and an artificial palm tree in the playground of its church school. In La Habra, the Green Hills Baptist Church first leased space to a provider two decades ago and has since put several transmitters on an outdoor cross, earning a reputed $20,000 annually.
No statistics are available on the number of churches that have deals with wireless providers. A 2012 study by California Watch found that nobody is compiling numbers on the trend, according to the Los Angeles Times. The Times reported, however, that wireless providers are adding thousands of new sites each year. Church buildings and properties are good options for these companies because they have tall structures and are centrally located in neighborhoods with zoning restrictions. It is often difficult for these companies to gain approval to build standing towers in the same neighborhoods.
Cell Phone Towers Can Draw Controversy
That brings us to the downside of doing these deals. Cell phone towers often draw controversy and planning boards in California cities have been known to reject applications. In Burbank, for example, the city turned down a proposal from T-Mobile in 2012 to load a dozen antennas on a church’s steeple and put other equipment in the sanctuary. By contrast, in 2010, the city of Mountain View approved an antenna on the top of a Presbyterian church. The church, however, took a big public relations hit because the tower would be located near a preschool and parents were outraged.
Many people still fear that cellular towers pose a health hazard because the equipment emits levels of radiation. Although there’s little evidence to support claims that cellular towers are dangerous, it is a common fear. Neighbors also often worry that the cell tower will be ugly and lower surrounding property values. Here again, this fear usually has more to do with popular belief than reality. Cell towers on churches are often unrecognizable and they can be disguised to look like crosses and natural spires.
Unfortunately, even well-hidden towers can draw protests. Neighbors of a church in Grand Junction, Colorado, saw earth moving equipment on the church property and discovered that the church was installing disguised wireless equipment on its building. They protested outside the church, claiming that the congregation was trying to hide the development from their neighbors.
Common Mistakes When Negotiating with Cellular Providers
We mention the potential controversy because a church should expect some opposition and needs to avoid alienating its close neighbors. A church also faces other potential costs. For example, the congregation will likely have to pay some taxes on the income and could potentially lose its tax-exempt status. Also, churches can easily make mistakes when doing deals with providers. A couple common mistakes to watch out for include:
Losing control of the space: Some long-term lease deals have made the cell phone provider the priority user of the space, effectively giving them control of the building. A church should be careful to read the fine print in these agreements to make sure that their lease with the wireless provider gives them the ability to do renovations and future expansions on their buildings.
Playing softball in negotiations: Cellular companies are under pressure from competitors to be the first to find new sites, so the church has the upper hand in negotiations. The congregation should make demands regarding how the towers will be disguised and get flexible terms on the rental agreements and compensation. Several churches have even structured deals that allow their space to be leased to several wireless companies. This can substantially increase the revenue. If a wireless company won’t budge, the church can walk away and field offers from that provider’s competitors.
Getting the Most Revenue from a Church Building
In one way, at least, churches are no different than commercial businesses and other nonprofits: they need money to survive. As costs to run a modern building continue to rise, more and more churches are doing deals with wireless providers that provide a steady income. A church may have other, less-controversial options, however. For example, churches can sometimes raise revenue by leasing their surplus space and buildings to other churches and nonprofits. It’s important to consider alternate revenue sources if the church is facing opposition to an agreement with a cellular provider.
As with any commercial deal, however, a church shouldn’t leap into an arrangement, but study its options thoroughly and consult with a team of professionals, including a commercial real estate consultant who can help identify all potential revenue sources in the facilities and property.
If your church is looking at ways to raise revenues from its buildings, you don’t have to go it alone. You can get a thorough analysis of your exisitng property from a consultant whose community values align with your own. Contact DCG Strategies today to learn more.