Release date: SFMTA Transit Shelter Advertising Agreement Approved by SF Board of Supervisors
*** Press Release ***
Today, the San Francisco Board of Supervisors approved the San Francisco Municipal Transportation Agency (SFMTA) Transit Shelter Advertising and Maintenance Agreement with Clear Channel Outdoor, Inc. (Clear Channel). The new Transit Shelter Agreement will increase the SFMTA’s revenue from advertising by at least $11.5 million per year. The agreement is effective December 10, 2007 and will last fifteen years with a five year option at The City’s discretion.
The Port Commission approved the agreement on September 25. The designs for the transit shelters and kiosks will require approval by the Arts Commission. The SFMTA and Clear Channel are working closely with the Arts Commission to ensure that design approval is received by March 2008.
The main provisions of the Agreement follow:
- This agreement will generate approximately $12 million to $15 million annually and over $300 million throughout the life of the contract.
- The total number of allowed kiosks, 150, is identical in both the existing and proposed agreements. The 2 to 1 ratio of commercial to non-commercial shelters will also stay the same.
- Replacement of all existing shelters and kiosks is required to begin within 12 months from the date the designs are approved.
- The new shelters will include technology to allow visually impaired persons to hear the NextMuni information, a beacon for waiting passengers to notify approaching transit vehicles, recycled and sustainable materials, solar power, and the technologically-advanced materials to deter or withstand graffiti.
- 3,000 bus poles with solar-powered signs will be installed at transit stops where there are no shelters within seven years from the date the designs are approved.
- The SFMTA will have approval over the construction schedule to ensure that priorities such as volume of passenger boardings and distribution throughout The City are followed. The construction of new shelters will include removing the current NextMuni equipment and placing it on the new shelters.
- The agreement calls for robust maintenance services, including a tight maintenance schedule. Clear Channel will be required inspect each shelter and kiosk at least twice per week, and those on Market Street at least three times per week.
- The agreement requires Clear Channel to make daily inspections of all platforms and pick-up trash, remove graffiti, clean and wash each boarding platform, inspect LED signs and lighting fixtures, and replace defective lights. Additionally, all low-level boarding platforms will be maintained and necessary repairs made twice a week.
- The agreement also requires Clear Channel to provide a Bicycle-Sharing Program, at the SFMTA’s request, details of which will be negotiated in an amendment to the Agreement. The bicycle-sharing program is subject to the completion of the environmental review of The City’s Bike Program.
- During the term of the agreement, Clear Channel may install an additional 400 shelters and 111 kiosks with the appropriate approval by the SFMTA and required permits.
The SFMTA made the following changes to the Agreement based on the BOS Budget and Finance Committee recommendations:
- The bike sharing program (implementation is contingent upon the completion of the Bike Plan environmental review process) must be self-sustaining and can be provided by a different vendor if the negotiations are not completed within 180 days after the contract begins.
- Experimental advertising must be approved by the SFMTA Board of Directors and, therefore, will be subject to public hearing.
Mayor Gavin Newsom stated, “San Francisco will now have a new set of tools that will make riding transit easier and more inviting. Getting around San Francisco will be more convenient than ever with improved transit and easy-to-use bike stations.” Supervisor Aaron Peskin also expressed his support, “This contract is a great deal for the hundreds of thousands of Muni riders who depend on the system every day to get to work, school, and around town.”
Nathaniel Ford, Executive Director/CEO of the SFMTA added, “This agreement provides a balance between a strong revenue stream and appropriate controls and oversight. The SFMTA looks forward to finding aggressive and innovative ways to leverage our assets in order to maximize our revenue. This is all about making better use of our resources to provide our customers the service they deserve.”
- Agreement with Clear Channel for the exclusive right to sell print advertising on transit shelters and kiosks, including on property under the jurisdiction of the Port, subject to the provisions of SFMTA’s advertising policy.
- These rights are incidental to the SFMTA’s transportation services, which may undergo changes affecting the advertising rights granted.
- Clear Channel will pay $5,000,000 upon execution of the Agreement.
- Clear Channel will make annual payments of $500,000 in administrative fees, $200,000 in marketing fees, and $265,000 for the Arts Commission. All these fees will escalate annually according to the Bay Area CPI.
- Revenue sharing will be 55% for the first 15 years of the Agreement.
- Voluntary commitment to an SBE goal of 15% of the supplies and services, including construction services, to be subcontracted by Clear Channel.
- Strong financial provisions, such as those for liquidated damages, a $10 million performance bond, and a $2 million letter of credit to be renewed each year of the Agreement.