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Bedford County authority sues cell tower company, alleging breach of contract

Bedford County authority sues cell tower company, alleging breach of contract

Huddleston broadband tower installation

In this Feb. 5, 2020 file photo, Blue Ridge Towers workers in Huddleston prepare to assemble a broadband tower as part of a system being built across Bedford County to improve high-speed internet access.

The Bedford County Broadband Authority filed a lawsuit Jan. 29 that accuses Roanoke-based Blue Ridge Towers of breaking contract in the county’s broadband project and demanding overblown payment to turn over ownership of a cellphone tower.

At the heart of the lawsuit is the authority’s claim that Blue Ridge Towers intended to either keep the tower for itself or “extort a massive profit from the Authority and the public” before transferring ownership to the authority.

The authority launched the broadband project in 2018 to bring better internet access to Bedford County residents and contracted BRT to design and construct 11 new cell towers across the county to meet those ends. Between grants and taxpayer funds, the entire project cost $3.5 million, and partners in the project are still connecting residents to service, which remains spotty in places.

With construction now complete, Roanoke-based internet service provider partner BriscNet is contracted to take over the rollout and management of services, for which it pays the authority rent on the towers.

For coverage around Big Island, BRT was slated to represent the authority in purchasing property for the tower from Georgia-Pacific in May 2019 at a “favorable” cost of $30,000, the lawsuit states.

At the time, the company tried to negotiate ownership of the Big Island tower and site, which would’ve required a change order, but the agreement meant the authority would be the owner of the property and tower.

James Richards, an attorney representing BRT, said in a statement that the company is disappointed that Bedford County officials resorted to litigation in the middle of negotiations “but remains hopeful that the parties can resolve their dispute equitably and amicably.”

BRT worked directly with Georgia-Pacific for the deal, and emails from Bedford County Attorney Patrick Skelley at the time stated he had “no problem with BRT following through with that purchaser without my involvement, and that once you have closed with GP, the interest in the property can be transferred to the County,” according to the complaint.

Details for how to draft the deed for the authority were discussed at an advisory committee meeting on May 9, 2019, the lawsuit states, but BRT had drafted a deed with itself as the owner two days prior. The company then filed that deed later in the month.

In May 2020, BRT demanded $302,324 to turn the tower back over to the authority, part of which was for entering into those leases, the lawsuit states. The initial agreement was for BRT to turn over the tower after being refunded $30,000 for the property purchase.

Tower construction ended seven months overdue, for which the suit states “Briscnet and one of its principal investors, Radius Capital” encouraged the authority to sue BRT, indicating the authority didn’t do so. BriscNet started using the tower at the end of June to provide services and has paid BRT monthly rent of $10 instead of paying the authority.

BRT closed leases with T-Mobile and US Cellular later in 2019 so they could also offer service through the Big Island tower, according to the lawsuit. Those leases would be void by law except for the fact that the providers were unaware of BRT’s “subterfuge,” making them “bona fide purchasers for value” whose leases “should not be disturbed,” the complaint states.

Instead, the authority is demanding damages from BRT for unjust enrichments that match the leases. Those unjust enrichment counts claim that BRT collected money it wasn’t entitled to.

In one count, the authority demands $27,470 in lease payments that BRT has received so far, plus any future lease payments while the lawsuit is pending.

As an alternative to that, it demanded $769,000 in damages from BRT: the combined value of the leases with T-Mobile and US Cellular plus the amount the authority had spent on construction costs.

“BRT’s actions in acquiring the site and obtaining wireless carrier leases on the tower were transparent and made with the full knowledge and cooperation of County representatives,” Richards said on his client’s behalf. “The only issue that remained to be resolved was just and fair compensation to BRT for the land acquisition and an industry-standard commission on the leases.”

Every other tower has been turned over to the authority without hitches, according to the complaint. The authority gave BRT written notice of a breach and offered the initially agreed $30,000 to turn it over, which the company has refused.

Failing that, the authority encompassed that breach of contract in a lawsuit, asking the court to enforce the original $30,000 transfer deal, plus damages.

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