Churches Find Revenue Leasing Steeples to Cell Companies

The practice has created additional work for property tax assessors, who are responsible for determining how much of the church's property is no longer tax-exempt.

By Kendall Taggart
|  Tuesday, Nov 27, 2012  |  Updated 8:39 AM PDT
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Churches Lease Steeples to Cell Companies

Inside the bell tower of the Church of St. Leo the Great, constructed in 1926 on a corner of Piedmont Avenue in Oakland, isn't the obvious spot for a cell antenna, but that's where AT&T installed one.

Across the state, wireless companies are installing an increasing number of cell sites inside church steeples and bell towers. With the growing use of tablets, smartphones and other wireless devices, the wireless industry has approached churches because of their height and residential locations, where putting new towers would be difficult.

The practice has created additional work for property tax assessors, who are responsible for determining how much of the church's property is no longer tax-exempt. Churches and other nonprofits often are exempt from property taxes, but only if the property is used for religious or charitable purposes. If property is used for commercial purposes, such as leasing space for a cell tower, tax assessors must charge the organizations.

For most churches, the extra revenue for hosting the cell towers generally exceeds the hit they might take from increased property taxes. Leases can range from $2,000 to $4,000 per month, depending on the church’s location. Officials at the Church of St. Leo the Great did not respond to requests for comment about their lease.

At Canyon Creek Presbyterian Church in San Ramon, a contract with T-Mobile brings in between $25,000 and $30,000 a year for the church, said Pastor Martin Scales. The church approached cell companies when it was constructing a new building six years ago because it knew the companies were having trouble putting antennas in the area.

Although the church lost part of its property tax exemption, the cell site revenue puts it ahead financially, Scales said. And it's a solution for cell companies looking to place antennas.

"Nobody can tell that they’re there unless they’re sharped-eyed and looking for them," Scales said.

An AT&T spokeswoman said the company has worked with a lot of churches and is committed to camouflaging the infrastructure so that it blends with the community. T-Mobile prefers to install antennas on existing structures whenever possible, spokesman Steve Caplan said in a statement.

Amy Storey, spokeswoman for CTIA – The Wireless Association, said many wireless companies are grappling with increasing demand.

"The industry looks to all types of existing structures in addition to church steeples – fire stations, hospitals, etc., in neighborhoods where there is growing demand and a shortage of suitable sites for new towers,” she said in a statement.

The difficulty of installing new towers in neighborhoods where residents often object to them has spawned an offshoot industry – several companies now specialize in disguising cell sites.

“California is really the hotbed of concealment," said Chris Hills, the western region sales manager for Stealth Concealment Solutions. "There’s more concealment there than anywhere in the world.” The company has installed cell sites in flagpoles, church steeples, trees and boulders on behalf of all the major service providers, he said.

No one tracks how many churches in California have installed cell sites statewide, so it's difficult to estimate how many have had their property taxes increased.

In any case, churches lose only a fraction of their tax exemption, determined either by the square footage leased to the cell company or the value of the lease. It isn't clear how much additional revenue counties might be collecting. But enough assessors were asking questions about the church leases that the California State Board of Equalization issued guidelines in 2008 to help county assessors determine how much churches should pay in property taxes.

In San Diego County, how much more property tax a church has to pay depends on the income it is receiving from the cell company. If a lease is for $100,000 and the assessed property value of the church is $1 million, for example, it would lose one-tenth of its exemption, said Jeff Olson, division chief of assessment services at the San Diego County assessor's office.

Just finding the cell towers can require some detective work on the part of county assessors.

“Most churches don’t realize that that would affect their exemption,” said Eric Gayden, a senior assessment technician at the Orange County Assessor Department.

The Alameda County assessor's office usually learns about the new cell sites through permits filed by the cell companies when they're installing the antennas, said Brian Hitomi, the chief deputy assessor.

Hitomi said the county is still processing the permit filed by AT&T for the cell site at Church of St. Leo the Great, so it hasn't seen any increase in property taxes yet.

View this story on California Watch

This story was produced by California Watch, a part of the nonprofit Center for Investigative Reporting. Learn more at www.californiawatch.org.

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