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File Number: 23-429 fiber optic cable infrastructure will be leased to carriers, commercial entities, and enterprises throughout the region to greatly enhance telecommunications connectivity and operations. Bandwidth has an approved lease and/or is in the process of leasing submerged lands owned by the California State Lands Commission, the City of South San Francisco, and City of San Leandro (“City”). The land contemplated in the lease encompasses both submerged lands and terrestrial land for supporting equipment on the shore and through City owned properties. A legal description describing the proposed easement alignment for the proposed fiber optic cables in the City parcels are included as Exhibit A of the Lease Agreement. Analysis The term of the agreement under the proposed lease is twenty-five (25) years, with an option to extend at the City’s discretion. The rental rate for the submerged land is $5.00 per linear foot. The amount of $5.00 per linear foot was derived from a rent comparison conducted by the State Lands Commission (“SLC”) for leasing the State of California’s portion of submerged land for the project. The SLC utilized historical data and surveyed rental rates of other state agencies for submerged fiber optic cable. Based on the survey, rental rates were found to range from $0.14 per linear foot to as high as $20.52 per linear foot. The rental rate of $5.00 per linear foot, which was the previous amount used by SLC, was found by the SLC to still be a reasonable and a rational rental rate. For the terrestrial portion of the lease, a formal appraisal could not be completed in time so a prior appraisal for a comparable fiber optic cable lease from 2013 was used to provide a base rent. The appraisal consists of valuation of industrial, commercial, and residential land and for the purpose of estimating the highest and best use for the lease, the average value of an industrial and commercial land was used. The value was then escalated using the shelter component of the Consumer Price Index (CPI) to determine the approximate value of the lease today. Using this analysis, the rental rate was determined to be $8.00 per linear foot. The City and Bandwidth agree that a formal appraisal within the next twelve (12) months for the terrestrial land lease is still the best option. Once a formal appraisal is completed, the City and Bandwidth will meet and confer, and come to agreement on the appraisal value and associated rent increase, if any. Additionally, under the proposed lease, Bandwidth has agreed to install city conduits and vaults along Lewelling Boulevard and Wicks Boulevard valued at $549,334.50. These conduits are identified in the Smart City Strategy for fiber expansion and will complete gaps in the Fiber Optic Master Plan. This alignment is represented as segments 7 and 8 of the attached Exhibit B of the Lease Agreement. The addition of these conduits will provide the infrastructure for future high speed fiber connection to underserved communities in the south area of the City, Woodroe Woods School, and city controlled traffic signals. Page 2 City of San Leandro Printed on 9/13/2023