BaselineHow the feasibility study estimate compares to industry baselines

The board-commissioned feasibility study, the only documented construction estimate in the project file, puts total design plus construction at $590,920 for a standard self-supporting steel tower or $883,920 if Sonoma County requires a fake tree (monopine) design.

Cell tower construction costs vary widely depending on site complexity and design requirements. Industry data (pre-tariff) groups projects into roughly three classes:

Sea Ranch sits firmly in the third class on cost. The more important question is which design the County and Coastal Commission will require, because that choice is the single biggest swing in the construction estimate. Both the $590,920 self-supporting figure and the $883,920 fake tree figure predate the structural cost factors below that have compounded since the study was prepared.

+ Cost Factor 1The fake tree (monopine) premium: a real but genuinely uncertain $293K

The feasibility study treats the $293,000 fake tree (monopine) premium as optional. Whether it is actually required is the biggest single uncertainty in the construction cost, and the evidence cuts both ways. This is why the optimistic member case assumes a plain pole and the pessimistic case assumes a monopine.

Reasons the County or Coastal Commission could require a fake tree design:

• Regulatory framework. Sea Ranch is within Sonoma County's coastal zone, so the project requires both a Sonoma County Use Permit and a Coastal Development Permit consistent with the certified Local Coastal Program. Sonoma County Code Section 26-88-130 governs all telecommunication facilities and requires an alternatives analysis for any facility in a designated scenic resource area or residential zone, with the proposed design subject to design review. Sections 26-64-040(c) and 26-64-050 add specific scenic-resource design standards.
• Recent Sonoma County approvals show the pattern. Major freestanding wireless facilities approved by the County in the past three years in scenic landscape units have been designed as fake trees (monopines), including the AT&T Mark West Station 98-foot fake tree (mono-pine) in 2022 (CEQA Notice of Exemption) and the Camp Meeker / Bohemian Highway 140-foot faux-tree (monopine) in 2022 (CEQA Notice of Exemption).
• Coastal Commission precedent. The Commission has upheld county fake tree requirements in coastal scenic areas under Coastal Act sections 30240 and 30251, as in the Verizon Wireless Rincon Point appeal (December 2016).

Reasons a plainer pole could be permitted, or even preferred:

• The Coastal Commission does not always favor fake trees. Its general preference is for facilities that blend naturally into the landscape, and its historical stance has at times favored simpler, less obtrusive structures over tree mimics that can read as artificial.
• The Point Reyes precedent. In a recent coastal tower review, a monopine was not recommended because the site had few existing trees for it to blend with. The carrier's consultant advised that a plain pole would be a better fit for the site than a fake pine, and noted that the tree-like crown would add roughly six feet of height, observing that without the faux crown the silhouette "resembles a toilet brush." Both the Coastal Commission and the carrier ultimately rejected the monopine, and a plain steel pole was built instead (Point Reyes Light, May 2022; follow-up, 2025). Sea Ranch's open, windswept north end shares the same low-tree character.
• Sea Ranch's own design ethos. Sea Ranch's architectural tradition favors honest, unadorned structures over imitation. A fake tree may sit poorly with both the community's aesthetic and the Commission's stated preference for blending rather than disguising.

Because the outcome is genuinely uncertain, the calculator treats the monopine as a toggle. The optimistic member case leaves it off (plain pole, no premium); the pessimistic case turns it on (+$293K). Members can test either assumption.

+ Cost Factor 2Section 232 steel tariffs doubled twelve days before the study was finalized

Cell towers, foundations, fencing, antennas, and equipment cabinets are predominantly steel and aluminum. On June 4, 2025, the federal government doubled Section 232 tariffs on these products from 25% to 50%, with no in-transit exemption. The feasibility study is dated June 16, 2025, just twelve days later, likely before the cost shock had filtered into project quotes.

Subsequent industry data confirms the impact has been material and persistent: 407 additional product codes were folded into the 50% tariff scope by August 2025 (including structural shapes and tubing used in tower construction); steel mill products were up over 20% year-over-year and aluminum mill shapes up 33% by January 2026; and XL Construction's December 2025 California cost impacts report identifies steel tariff exposure as a leading risk, with subcontractors building in 15-20% contingencies on imported metals. The cost basis in a June 16, 2025 study materially understates today's build cost.

+ Cost Factor 3California coastal construction premium

California is consistently among the most expensive U.S. construction markets, with San Francisco ranked the second-most-expensive city to build in the world by Turner & Townsend's 2025 Global Construction Market Intelligence Report, and coastal scenic-resource sites carry an additional premium on top:

• Regional baseline: California construction runs 8-12% over Midwest and Southeast pricing on materials and labor (2026 bidding trends report).
• Coastal versus inland: California coastal and urban-corridor projects routinely cost 20-35% more than comparable inland projects (City Ventures 2026 guide).
• California cost inflation: 4-5% annually, 6-8% with tariffs, per the XL Construction December 2025 report cited above.
• Steel fabrication lead times stretched from a historic 8-10 weeks to 12-16 weeks in late 2025, exposing any fixed-price bid that does not lock in materials early to escalation risk (CyberStockroom industry analysis, December 2025).

+ Cost Factor 4Site-specific factors at this location

• High Fire Hazard Severity Zone. The proposed site is in a Sonoma County HFHSZ, which can impose additional structural and material requirements under California Building Code Chapter 7A.
• Coastal Development Permit required. Sea Ranch sits within Sonoma County's coastal zone, so the project is subject to both a County Use Permit and a Coastal Development Permit. The permitting timeline alone can stretch the construction window by 12-24 months, exposing the project to additional cost escalation.
• Access road through coastal terrain. The Site Walk Checklist indicates approximately 520 feet of access road grading and drainage from the nearest public way.
• Sea Ranch design covenants. Materials, colors, and finishes must satisfy Sea Ranch's design review process in addition to County and Coastal Commission requirements.

+ Cost Factor 5Site items the feasibility study leaves out

The feasibility estimate sets a long list of items aside as "TSRA" responsibility, meaning they are NOT included in the $590,920 or $883,920 figures. With externally sourced cost estimates:

The April 2025 Finance Committee memo treats several of these items as effectively free, on the assumption that TSRA's own facilities staff will perform the work rather than hiring it out. That assumption understates the true cost. Staff hours are not free: they are paid for by member dues, and every hour spent grading the access road, building the compound, or maintaining the site is an hour not spent on the trails, roads, and common facilities those dues are meant to support. Whether the work is contracted out or done in-house, the labor has a real cost and is ultimately borne by members. Booking in-house labor at zero does not make the project cheaper; it simply moves the cost off the construction estimate and onto the operating budget, where it is harder to see.

The April 2025 Finance Committee memo broke out roughly $100,000 in up-front non-construction costs as a line item within its total $600,000 "TSRA Out of Pocket" figure: $75,000 in consultants (architecture, environmental, telecom counsel, land use counsel, survey, photosim/NEPA/FAA), $23,000 in permits (Coastal Development Permit $8,000 plus Building & Site Permits $15,000), and $2,000 in FCC fees. The August 2025 Board agenda revised the total upward to $700,000 to $1,000,000 but no longer breaks the up-front items out as a separate line. The calculator's TSRA presets split this combined total back into its components for clarity: $600,000 to $900,000 of construction (Input 1) and $100,000 of up-front (this input), so the combined TSRA up-front outlay still matches TSRA's stated $700,000 to $1,000,000 figure exactly. The Member case uses the same split structure with both portions revised upward to reflect the realistic construction cost breakdown and documented fees billed since 2023.

The records production also includes payment histories for at least six consultants and law firms billing TSRA on this project since 2023. The roster includes outside cell tower consultants (with more than 30 invoices since October 2023, billed hourly), an architecture and design firm (feasibility study, design work, site walk, photo simulations), outside counsel on this matter, geotechnical work, and additional specialists. TSRA stated the underlying invoices "are not segregated between Cell Tower issues and the other matters" so the exact cell tower share cannot be calculated from the records produced. The project will continue to generate professional fees through Coastal Commission permitting, Sonoma County approval, and additional legal work given known opposition.

No industry evidence could be found to support one-time capital contributions from carriers in excess of approximately $10,000 per carrier. Independent industry consultants put the typical range for one-time payments (option payments and signing bonuses) at $100 to $10,000 per carrier, with the upper end reserved for the most competitive urban markets (Steel in the Air). The executive lease negotiator's own Letter of Engagement (Section 3.B.iv) is consistent with this: it states that one-time compensation from carriers "tends to be around $1,000" and is typically structured as an option payment to gauge tenant interest. The actual carrier responses to TSRA's Expression of Interest have not been shared with members, so it is possible, but seemingly unlikely, that carriers committed to 10x more than this for the Sea Ranch project specifically. Two factors argue against that being the case here: only three firms responded to TSRA's Expression of Interest, and major carriers already advertise coverage of Sea Ranch on their public maps so they are not under pressure to sign.

Important note on what TSRA actually receives: The Letter of Engagement with the executive lease negotiator (covered in detail under Model Input 6) provides that the negotiator is paid "Fifty percent (50%) of any one-time payment [the negotiator] is able to negotiate and collect for Client" (Section 4.B.I). Under plain reading, a carrier capital contribution is a one-time payment negotiated as part of the lease. If that interpretation holds, TSRA receives only half of any contribution the carriers actually pay. The Board has not separately disclosed whether or how this 50% reduction is treated in its published financial figures. The calculator's negotiator toggle, when on, applies this reduction.

• TSRA's 2024 Expression of Interest received only three responses; the Board declined to identify the respondents. The history is documented in the Davis-Stirling records inquiry and analyzed in the group's May 2026 Part 1 communication.
• Verizon, AT&T, and T-Mobile all currently advertise LTE coverage at Sea Ranch on their public coverage maps (Verizon, AT&T, T-Mobile). The FCC's official mobile coverage map shows the same.
• Cell carrier consolidation has reduced the addressable tenant pool to three major facility-based U.S. carriers. T-Mobile completed its acquisition of UScellular on August 1, 2025, removing the largest remaining regional carrier from the market. The DOJ noted at closing that the "Big Three" (Verizon, AT&T, T-Mobile) now account for more than 90% of the country's 335 million mobile subscriptions. DISH/EchoStar (parent of Boost Mobile) declined to make a $326 million interest payment in May 2025, faces FCC review of its 5G buildout obligations, and is selling spectrum to AT&T to fund operations, making it an unlikely fourth tenant for a new rural tower.
• Carriers frequently drop out of rural sites during the permitting cycle as alternatives (small cells, satellite, fixed wireless) become more attractive. Industry sources confirm carriers are "more aggressive than ever in trying to renegotiate their leases".
• Operating costs do not scale down proportionally if a carrier leaves; management fees, property insurance, generator service contracts, routine maintenance, and inspection costs are largely fixed regardless of tenant count. The TSRA-owned Moonraker tower's operating statement (analyzed in detail under Model Input 7) demonstrates this directly: its ~$67,500 typical-year operating costs do not scale with carrier count.

This is the single place where TSRA's assumption has diverged most sharply from current market reality. Multiple industry sources document a clear, persistent decline in new cell tower lease rates driven by carrier consolidation, lease optimization firms pushing rates down, and the emergence of satellite direct-to-cell as a competing technology:

• Steel In The Air (2024 industry report): "On average, wireless carriers entered into new lease with landowners at an average of $1,050 per month or $12,600 per year on a nationwide basis. There is a wide variation though in what landowners are offered." Source
• Vertical Consultants (Jan 2026 forecast): "In 2024, cell tower companies and wireless carriers signed cell tower lease agreements with property owners around the United States, for an average of approximately $1,145 per month" ($13,740/yr) with a range of "$400 per month to $1,800 per month" ($4,800 to $21,600/yr). Source
• cell-tower-leases.com (2026 forecast): "Most new cell towers in 2026 will lease for between $500 and $900 per month" ($6,000 to $10,800/yr). Source
• Why rates are falling: "Wireless carriers are more aggressive than ever in trying to renegotiate their leases. They hire third party optimization firms that are paid solely to get landowners to reduce their lease rates." Source
• Carrier consolidation impact: "Consolidation may lead to network optimization efforts, affecting the demand for certain tower sites." Source

Even after accounting for Sea Ranch as a coastal California location that might command a small premium, TSRA's assumed range of $1,820 to $2,415 per month sits at or above the very top of the documented 2024 national range and is substantially above the 2026 forecast.

Records produced in the inspection show that the board's own outside cell tower consultant has billed time discussing this market dynamic with TSRA staff in early 2025, including the per-tenant tower lease rate ("tower cap rate") and the potential for technology advances to replace traditional tower infrastructure.

The Moonraker tower's existing leases are not a useful benchmark for new leases. Those leases were negotiated decades ago and have escalated annually. The economic question is what carriers will pay for a NEW lease in 2026 or 2027 with full knowledge of satellite alternatives, not what they pay for legacy leases.

The records production includes the Letter of Engagement between TSRA and its external lease negotiator. For a new tower, Section 4.B sets the negotiator's compensation in three layers:

• 20% of all rental income derived from tenants, for the full duration of every lease, including holdovers, extensions, and renewals (Section 4.B.II)
• 50% of any one-time payment the negotiator is able to negotiate and collect for Client (Section 4.B.I). The carrier capital contribution discussed in Model Input 3 falls under this provision.
• The first three months of rent from each tenant as an "Initial Fee" (Section 4.B.III)

The 20% rent share is a permanent claim on the revenue stream. The 50% one-time fee takes half of any carrier build-out contribution. The Initial Fee takes another three months of rent in the first year of each lease. All three are contractually committed for the full sixty-month term of the engagement, and persist through the full term of every lease the negotiator helps put in place.

Because TSRA did not produce its financial model, members cannot verify whether the published net revenue or NPV figures are shown before or after any of these three reductions.

Moonraker operating statements give a benchmark for what it costs to operate a Sea Ranch tower. Comparing line-by-line for the FY 2027-28 typical operating year:

TSRA's $22K assumption matches the Moonraker baseline operating-only costs almost exactly. What it misses is the new tower's TSRA-owned generator (the feasibility study specifies a 60 kW propane generator with associated fuel and service costs, where no equivalent line item appears in the Moonraker statement), the management labor allocation (Moonraker's is bundled into a separate fee), and the reserve for major repairs. The lease negotiator's 20% rent share is covered separately in Model Input 6 and is not part of operating expenses.

Industry data shows annual rent escalators in new cell tower leases "dropped from an average of approximately 3% annually to around 2% annually" in recent years, as carriers and tower companies push harder on lease terms. TSRA's 3.0% is defensible against historical practice but at the upper end of current new-lease economics.

Why this matters: When financial analysts evaluate a project that will generate cash flows over many years, they use a single number to capture two things at once: the time value of money (a dollar next year is worth less than a dollar today) and the risk that the projected cash flows might not actually materialize. That number is the target financial hurdle, known in finance as the discount rate. A higher hurdle means the project is being treated as riskier, and the result is a lower Net Present Value. TSRA's implied 7% is a major understatement of this project's risk profile.

TSRA's own materials flag financing as uncertain

From the staff materials prepared for the April 19, 2025 Finance Committee meeting (with estimates later revised upward in the August 23, 2025 TSRA Board agenda):

We do not know whether TSRA has formally approached any banks or received a formal decline. What we do know is that TSRA's own staff identified bank financing as uncertain enough to flag in Finance Committee materials. Regulated banks withhold financing when they assess that a project's risk outweighs its likelihood of generating a positive return. If staff anticipate banks may decline this project, the appropriate risk-adjusted hurdle is materially higher than what is appropriate for a stable, financeable infrastructure asset.

Industry benchmarks for infrastructure project risk tiers

• Lowest-risk infrastructure (roads, power grids, well-established utilities that banks will reliably finance): 7% to 10% target annual return. ION Analytics
• Moderate-risk infrastructure (already-operating parking facilities, existing data centers): 10% to 13% target annual return.
• Higher-risk infrastructure (new construction, technology that could be displaced by alternatives, no diversification across multiple sites): 14% or higher.
• Digital infrastructure funds (the investment category that includes cell towers and data centers specifically): median 14.0% target annual return per Cambridge Associates' November 2025 review. Cambridge Associates
• Portfolios of already-built, leased cell towers trade at 15x to 40x annual cash flow (an implied 2.5% to 6.6% annual return on price paid). Critically, these are operating tower assets with proven income streams. A single tower that has never been built or leased before carries materially higher risk than an established portfolio.

Why 7% is too low for this specific project

This project carries an unusual stack of risks that a 7% rate does not reflect:

• It has never been built before. There is no track record to draw on.
• It would be a single asset. There is no diversification across multiple towers or sites to cushion a bad outcome.
• Construction risk. TSRA's Finance Committee rated overrun risk "high" in April 2025, and the cost estimates were revised upward in the August 2025 Board agenda.
• Technology displacement risk. Satellite direct-to-cell service is actively rolling out (see Input 10).
• Regulatory risk. The project still needs Coastal Commission approval, and deed-restriction litigation is possible.
• Demand risk. Carriers already advertise coverage in the area, so it is not clear they will pay to be on this tower.
• Concentration risk. One association, one site, one set of carrier relationships.

The lenders who professionally evaluate and price these risks are likely to see this combination as too risky to finance at normal rates. That is consistent with what TSRA's own staff said about banks possibly declining to lend.

If TSRA staff anticipate that banks may not lend at normal rates, then a higher target hurdle is the financially appropriate way to reflect that risk in the model.

Why this matters: Net Present Value (NPV) is heavily weighted toward the later years of any long-lived project, because that is when the up-front construction outlay has been recovered. Shortening the useful life by even five or ten years removes the most valuable part of the income stream.

The cellular industry is in an active period of technological substitution, moving from ground-based cell towers to satellite direct-to-cell service:

• SpaceX and T-Mobile launched their first Direct-to-Cell satellites in January 2024, opened a beta service in February 2025, and made the T-Satellite commercial service available on July 23, 2025, with broadband data added in October 2025. As of early 2026, more than 650 Direct-to-Cell satellites are in orbit.
• AT&T signed a definitive commercial agreement with AST SpaceMobile in May 2024, completed the first satellite voice call over its spectrum in February 2025, made a native voice/text call in July 2025, and is launching a beta service for select customers in the first half of 2026.
• Verizon entered a strategic partnership with AST SpaceMobile in May 2024 (including a $100 million investment), then signed a definitive commercial direct-to-device agreement in October 2025 with service targeting 2026.
• Apple's satellite Emergency SOS feature has shipped on every iPhone since the iPhone 14 launched in November 2022, operating via the Globalstar constellation.
• In May 2026, AT&T, T-Mobile, and Verizon announced plans for a joint venture to pool their satellite-to-device partnerships and spectrum, a direct response to SpaceX's growing Starlink Mobile footprint. The three largest US wireless carriers organizing collectively around satellite is a strong signal from the industry itself that satellite is reshaping the economics of rural coverage.

For dense urban environments, macro cell towers will remain essential for the foreseeable future. The economics are different for low-density rural coverage. Sea Ranch's north end has on the order of 200 to 300 lots within the proposed tower's primary service radius, which is the precise coverage problem satellite direct-to-cell is designed to solve.

For a more thorough treatment of the satellite displacement thesis and historical precedents for technology substitution in communications infrastructure, see the group's May 2026 Part 1 communication. The record from the records inquiry also shows that the board's own outside cell tower consultant has been billing time on the question of satellite technology displacing tower infrastructure since at least February 2025.