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S.F. Muni board OKs plan for Clear Channel to sell transit shelter ads

Date: September 05, 2007

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S.F. Muni board OKs plan for Clear Channel to sell transit shelter ads
San Francisco Chronicle
Rachel Gordon
September 5, 2007

San Francisco -- San Francisco transportation authorities approved a plan Tuesday that would allow Clear Channel Outdoor to sell advertising on bus shelters in exchange for millions to the city.

The proposal, approved unanimously by the San Francisco Municipal Transportation Agency's board of directors, also needs approval by the Board of Supervisors and the San Francisco Port Commission.

The plan would give Clear Channel Outdoor the right to sell advertising on bus and streetcar shelters and free-standing kiosks.

In return, the company would pay the city at least $306 million over the life of the contract, which has an initial term of 15 years but can be extended to 20 years. The company also would have to replace all 1,100 existing shelters at bus and streetcar stops around the city, and, with additional approval, have the chance to install an additional 400 more.

In addition, Clear Channel would have to replace the existing 39 advertising kiosks and could get the OK to add an additional 111. The company would be responsible for the upkeep of the shelters and streetcar boarding platforms.

The agency, which operates Muni's buses, streetcars and cable cars, needs at least $100 million more a year on top of its existing $670 million annual budget to make noticeable service improvements, officials say. The money from the transit shelter contract would help fill the gap, they say.

The existing shelter advertising contract, held by CBS Outdoor, expires in December. Under the current agreement, Muni receives about $300,000 a year from the contractor.

The proposed contract calls for the new bus shelters to be outfitted with devices that will let blind people know when their next bus or streetcar is due to arrive. The company also would install 3,000 poles with solar-powered signs at bus stops where there are no shelters.

The company may be asked to install canopies over the Market Street subway entrances, a plan that would need approval by BART, which shares those stations. Clear Channel may be required to set up a bicycle-sharing program in the city.

Under the proposal, Muni would get $5 million up front and then would be guaranteed minimum annual payments of almost $7 million in the first year and more than $25 million in the last year. The total amount could exceed $381 million, plus administrative expenses. The city is eligible for additional payments, if Clear Channel's advertising revenue exceeds a set amount.

Sonali Bose, the Municipal Transportation Agency's chief financial officer who took the lead in negotiating the contract, noted that Clear Channel would be penalized financially if the terms of the contract are not carried out.

Clear Channel beat out CBS Outdoor and another company, Cemusa, in the competition to negotiate a new transit shelter deal with the city. Representatives from those companies are expected to continue their lobbying efforts as the proposed contract moves through the final approval stages.

The 6-0 vote by the Municipal Transportation Agency's directors came despite opposition by the civic improvement group San Francisco Beautiful, which decried the potential increase in advertising on city property, likening it to commercial blight.

"San Francisco will be dancing with the devil if the bus shelter contract is approved," said Dee Dee Workman, executive director of San Francisco Beautiful.

But others, such as Irwin Lum, who heads the San Francisco Transport Workers Union, said Muni needs the money to improve service. Rob Black, a representative of the San Francisco Chamber of Commerce, agreed, saying the proposed private-public partnership with Clear Channel will not only provide a much-needed funding stream for Muni, but also make sure that the old shelters are replaced.

The new shelters, the designs of which must be approved by the San Francisco Arts Commission, would start being installed within six years.

"We commit to you that we will deliver a program that is worthy of San Francisco," said Bill Hooper, president of Clear Channel's Northern California operation.

 

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