Summit Broadband will pay $7.25 million for ownership of the network.
(TNS) — LEESBURG — The city of Leesburg has reached agreement with a broadband company to sell its fiber-optic utility for $7.25 million, according to city spokesman Derek Hudson.
City officials expect to close on the deal with Summit Broadband in January.
The city will keep its fiber-optic connectivity for its own use, which was a key negotiating point. "For us, it's seamless," Hudson said.
The six city workers who work in that department will either be relocated to other city jobs or become employees of the buyer.
Summit Broadband provides voice, video, data, high-speed internet phone and TV services to business and residential customers in central and southwest Florida, as well as ethernet.
"The city has done business with Summit Broadband for several years, both as a customer and as a wholesale communications service provider," City Manager Al Minner said, in a press release Monday.
"Customers will continue to receive the high-quality service they have come to expect from the city of Leesburg, while getting the opportunity to explore additional solutions and services to enhance their telecommunications package further," said Mark Lipford, Summit's CEO.
"I think it's a great opportunity for the city of Leesburg," said Mayor Bob Bone.
Officials have no immediate plans for the cash. "I don't want the city to think it's burning a hole in its pockets," Bone said. He would like to see money from the sale turned into some kind of economic investment.
"I believe when you sell an asset that was making money, you should turn it into another investment," Bone said, explaining that It could be intangible, something that would make the city a more attractive place for people to come and live.
The city has been on a major capital improvement campaign, with "gateway" landscaping projects, and improvements to Venetian Gardens, including Ski Beach, a new playground and splash pad and plans for a new community building. The town is not going into debt, but is on a "pay-as-you-go" basis.
Leesburg is also in the process of selling 1,938 acres for $11.9 million to The Villages. Both sides are working to fulfill contract details before they can close the books on that deal.
Like the fiber optics sale, the city has no immediate plans for that money, either.
That's another example of the city using an old asset as a new asset, Bone said. The city bought the land for a wastewater sprayfield site. Later, it decided to sell it for industrial uses. When the mega retirement community decided to expand to Fruitland Park and Sumter County near the Florida Turnpike, the city was in a position to sell the land along County Road 470 to The Villages.
"It's going to expand the tax base, the utility base and increase the number of jobs for Leesburg," Bone said.
The city got into the fiber optics business in 1993. It was new then, and not much competition. Though it brings in some revenue to the general fund — about $100,000 each year — "not crazy bad," Minner told the Daily Commercial earlier this year. "Fiber optics is not really a core business for us."
The city would have had to reinvest some money soon to stay competitive, he said.
The city gets about 25 percent of its revenue through the sale of electricity. Other utilities, like natural gas and solid waste disposal bring in 10 percent.
Officials started putting out feelers for a buyer of the fiber optics business last year but there was not much interest at first. The initial offer was for $1.5 million. Six months later, the numbers "exploded," according to Minner.
©2017 Daily Commercial, Leesburg, Fla. Distributed by Tribune Content Agency, LLC.