What's happening is, you -- (Indiscernible; parties talking over each other.)
Let him answer my question, Ms. Miller. I want to know, what are we talking about?
What's the issue? 82 12/10/08 FISCAL STABILITY, RES. 080603, 890
Here's the issue: Under their estimate, as much as $200 million is on the streets right now. In our current configuration, we only get 30 percent of the percent, which is 7 capped at $750. 8
We want to 10 consider increasing the cap so that the City of Philadelphia gets a larger portion of that share. And then we want to look at means by which I hope the City Solicitor is in negotiations on how we receive that thou -- the rest of that $900 that's owed on the streets, which could be as much as $200 million. Now, I have questions about -- what has been helpful to me is that the economic assessment of the individual receiving bail is not done by you.
It is done by the Controller's Office, so the question be -- 83 12/10/08 FISCAL STABILITY, RES. 080603, 890 (Indiscernible; parties talking over each other.)
The real estate part, correct. And my issue on real estate is, is there a question of economic viability that we're trying to be a little more liberal so that we have don't have over-crowding in jails, and that's a reality. But in cases where people have means to pay, we should be going after -- if somebody jumps bail, we should -- and the person has means to repay the City of Philadelphia, we should be going after those dollars.
Right. And we are working with the City Solicitor's Office 84 12/10/08 FISCAL STABILITY, RES. 080603, 890 to go ahead and make sure that that happens, that there's a collection (inaudible).
That's a possibility, but at the point where we're closing libraries, fire stations, and pools, we're going to reassess how we deliver bail, we're going to look a little harder at the economic viability of the individual. And if we can get real estate, we want it; and if they violate and jump bail, we want the property.
I think in terms of -- you mentioned it yourself. In terms of looking at the cost, is trying to collect a thousand dollars going to cost you more? By keeping 'em in jail, does it cost more than the thousand dollars to keep 'em in jail than to keep the cap on the 750? Because the ability to pay the 750, if it's not there, then you increase the population in the prison, and that 85 12/10/08 FISCAL STABILITY, RES. 080603, 890 cost goes up to the City.
And as we look at this, we're looking at this in total context of house arrest and other things we can do to try to balance this out. And I appreciate your comments there. We don't want to be penny-wise and pound-foolish. It does not make sense for us to hold somebody in jail at a hundred dollars a day cost to the City of Philadelphia. So your point is well taken. But as we look at all of these things as cost considerations, we need to take into account that $200 million is a lot of money that, you know, we can possibly go after.
I want them to explain that 200 million. What -- whose money is that; is that our money? If we're at a 750 cap, what -- I don't -- see, I don't understand the process, so that's why I'm not sounding 86 12/10/08 FISCAL STABILITY, RES. 080603, 890 real smart about this stuff. You can't know everything, right? So how do you come to -- is that $200 million that has not been paid of the 30 percent of the money that's floating out there for bail?
How do you get to $200 million? And what is that; whose money is that?
The commission and the forfeited bail is two separate categories. The commission is already automatically earned, it's automatically taken from the bail money.
No, but Councilman Jones is saying we have $200 million on the street that we need to capture.
It's the City's money. 87 12/10/08 FISCAL STABILITY, RES. 080603, 890
The 750 is commission. That money is separate from forfeiture; that's what I'm saying.
So you're saying there are people out there on bail who didn't pay the percent. 10
There's an administrative fee that they're already getting; they get that off the top.
But what is missing in that 200 million is people who jump bail, who don't come back; that is owed to the City of Philadelphia.
Yeah, that's the 70 percent. 88 12/10/08 FISCAL STABILITY, RES. 080603, 890
Joe Brown 10 goes to court, he has to pay a bond, and he has to pay 750 to the City. And he pays -- whatever he pays, 750 comes to the City.
Does he put the 10 percent up at the time he's put on bail?
He has to post that money at the time that he pays the bail; he has to put the money up, right? So you get 10 percent bail, and that's $2500, and then you take --
So how do you not collect it if you're not collecting it upfront? Shelly, can you explain it to us? Let Shelly explain it to me 'cause I'm a little slow at this. (Witness comes forward.)
And for the record, just for the record, we have three individuals who are in the next panel that have to be at a 3 o'clock appointment, so if we can't wrap it up relatively shortly, we're going to ask for you to submit to the chair for the committee members in writing the structure of how it works.
Yes, of how it works. SOLICITOR SMITH: Shelley Smith, City Solicitor. All right. Hypothetically, a person is -- a judge imposes bail of 90 12/10/08 FISCAL STABILITY, RES. 080603, 890 $10,000. The person is required, in order to be released, to post percent of that 4 bail, $1,000. 5 Of that 10 percent, the court 6 charges an administrative fee of 7 30 percent; that would be $300. 8 The amount of the administrative 9 fee, the 30 percent of that 10 percent, is 10 capped at $750. Therefore, no matter how high your bail goes, when you pay the -- if the 30 percent of your 10 percent would theoretically exceed $750, the court's administrative fee is still capped at $750. That's how it works.
So how do we get to the -- SOLICITOR SMITH: And the remaining amount of money then -- how do we get to the...
They said there's $200 million on the street. SOLICITOR SMITH: Okay. The $200 million, assuming that's the 91 12/10/08 FISCAL STABILITY, RES. 080603, 890 number -- and I'm not sure that that is the number. But assuming that's the number, whatever amount of money is outstanding in -- in -- that money is bail judgment. In other words, it's people who have forfeited their percent and also, 9 therefore, forfeited the total amount of 10 bail that was imposed against them. So when they forfeited -- when they jumped bail, they forfeited the deposit and they forfeited the total amount of the bail. So in my hypothetical, they forfeited the total $10,000. Whatever they have not paid is the remaining amount of the judgment against them, and they owe that. And those total amounts for all of those people who jumped bail and forfeited their 10 percent and then the total amount of bail amounts to the 200 million, or whatever the number is.
Thank you. SOLICITOR SMITH: You're welcome. 92 12/10/08 FISCAL STABILITY, RES. 080603, 890
Yes. Are we moving to look at that $200 million for collection? SOLICITOR SMITH: We are.
Thank you. And I won't ask question's; I'll just ask you to provide this information to the chair. Could you please get to us what your estimates would be if we increased it to a thousand dollars from 750, if we increased the fee from 30 to 35 percent. And then also give us a breakdown of the 90 percent that is not part of those fees, you know, the two or $300 million, whatever that number is, 93 12/10/08 FISCAL STABILITY, RES. 080603, 890 give us a breakdown of how much of that is collateralized by real estate or some other method or has a surety other than the actual bail jumper, what percent is that, so that we can get some kind of likelihood of collection analysis from that data. And then, finally, do we not have bail bondsmen in Philadelphia?
And, you know, if there are sureties, why we're not going after those people first, I guess, would be -- why it's hanging out there. Thank you.
All right. Thank you very much for your testimony. SOLICITOR SMITH: Thank you, 94 12/10/08 FISCAL STABILITY, RES. 080603, 890 Mr. Chairman.
Thank you, Miss Smith, for helping us. If you can -- when you compile that information, if you could forward it to the chair and we'll distribute it among the members both on the committee and Councilmembers. Thank you so much for your support.
All of us have been through Clerk of Quarter Sessions and their funding issues over the years, and it's always been an issue with 95 12/10/08 FISCAL STABILITY, RES. 080603, 890 them. Certainly, we support this department and we want it to survive and to continue. And we believe that any issues that are raised about departments, I would prefer that they come to Council and talk to us, because the functions of these departments still have to go on. So to say what departments should stay and which should lose, that's easy; anybody can say anything. But what happens to all that they do to raise these funds for the City, maintain records, and all that goes along with that. And, you know, the issue has always existed. They get a commitment that they'll get funded, their department does, and they never get it. So we wanted to speak for the Clerk of Quarter Session and praise them for the work that they do.
Thank you, Mr. Chairman. 96 12/10/08 FISCAL STABILITY, RES. 080603, 890
Councilwoman, I suspect if the recent newspaper reports go beyond simply statements, there will be significant discussions about what row offices will stay and leave, and there will be substantial discussions with respects to those proposals. Thank you so much. Next we'd like to call up Mr. Mark Madden, the Director of Business Development from SEMUSA; and Paul Levy from the Center City District. (Witnesses come forward.)
And, Mr. Madden, there will be some discussion about the ability to have a coordinated municipal advertisement program. And I understand that there was an attempt in the last administration to move this forward, but we did not conclude that. I understand Miss Cutler is here to provide any support as it relates to questions and the status of any new 97 12/10/08 FISCAL STABILITY, RES. 080603, 890 proposals. We're going to have a PowerPoint presentation.
Good afternoon, Councilmembers, committee teams, and citizens. My name is Mark Madden, and I'm the Director of Business Development for SEMUSA. If you could turn to the next slide, please. We're a global leader in the outdoor street furniture industry. We were established in 1984, headquartered in Madrid, Spain, and we're a century-old company -- rather, a subsidiary of a century-old company, FCC, which is Spain's largest municipal-services provider, with over $16 billion in annual revenue. Next slide, please. We're in 13 countries, over 160,000 structures in the ground in over 160 cities, such as Milan, Barcelona, Madrid, Rome, Rio de Janeiro; and, most importantly, the New York City contact. 98 12/10/08 FISCAL STABILITY, RES. 080603, 890 The 20-year New York City contract is for 3,300 bus shelters, 330 newsstands, 4 automatic public toilets, and a number of 5 other amenities. 6 Next slide, please. 7 SEMUSA's sole business is just 8 the design, fabrication, installation, and 9 maintenance of world-class street 10 furniture complemented by dedicated 11 advertising sales force. This is 12 important because street furniture 13 advertising is the only medium that we 14 sell. 15 This is a crucial factor in 16 revenue maximization as it eliminates 17 internal competition for advertising 18 dollars by selling other competitive 19 media, such as billboards, radio, 20 airports, or shopping malls. We use internationally renowned designers such as (indiscernible) Di Giotto for our street furniture, who designed the Maserati; Richard Rogers, who did the Centre Pompidou in Paris; and Sir 99 12/10/08 FISCAL STABILITY, RES. 080603, 890 Nicholas Grenshaw, who did the Waterloo Station in London. The next few slides are basically just some examples of our street furniture and different designs and different design shapes. This is some standard bus shelters as well as some large bus shelters. Next slide. Here you have some newsstands with different functionality, with the garage-shaped enclosure in the front and also open paneled doors on the lower left. Next slide. Here you have honor-box corrals, or newspaper corrals, which are designed to reduce street clutter. And, finally, automatic public toilets, several different designs. And then information kiosks or way-finding kiosks, which are used for maps and things like that. Trash receptacles, which can be combined with other furniture such as 100 12/10/08 FISCAL STABILITY, RES. 080603, 890 benches at bus shelters or stand-alone furniture. Also, with all of our structures, we have the ability to put in -- we have the flexibility and innovation to put in the time and temperature clocks, digital media, next bus, or next (indiscernible) bus lights. One of our core values is respect for the environment. We use high-quality, pollutant-free recycled materials, and maintain our future, using biodegradable cleaners. More than 95 percent of each (indiscernible) structure is recyclable. We implement solar-powered structures when possible. For example, we installed 1200 solar-powered shelters in Miami. The power they generate provides a minimum of six hours of illumination during the night and reduces carbon dioxide emissions by 2300 tons a year. Next slide. Bicycle-sharing systems. I know 101 12/10/08 FISCAL STABILITY, RES. 080603, 890 this was a -- on the docket several months back, in early 2009. SEMUSA has a long history of supporting green and sustainable policies. Through this, we've come up with the bicycle-sharing program, which we've launched in Pamplona, Spain, which is stations and 350 bikes; and 9 most recently, Rome, which was a pilot for 10 20 bicycle stations and 200 bicycles; as 11 well as San Sebastian. 12 Next slide, please. 13 When a city selects us to 14 install street furniture or bicycle- 15 sharing programs, we partner with local 16 design, engineering, and manufacturing 17 firms to maximize the local economic 18 development.
For example, in Miami, local 19 partners performed 90 percent of SEMUSA's 20 work. Next slide. We look forward to continue an open dialogue with the City of Philadelphia and Councilmembers. My contact information is in my testimony 102 12/10/08 FISCAL STABILITY, RES. 080603, 890 submittal, which I have here. Should you want to meet or discuss a street furniture program for Philadelphia, we'd be more than glad to meet and talk with you folks. Thank you very much for your time and attention.
Thank you. Mr. Levy, I know you have a time issue. Oh, you're okay? Real briefly -- again, thank you for coming down and being very patient. I know you had some --
This is obviously something that has been discussed in the City of Philadelphia for a period of time. I believe we came close to entering in some agreement to have advertisement on street furniture and other municipal opportunities in the past, and I don't believe we concluded that. And it has obviously been lucrative not only in New York, but in other cities. 103 12/10/08 FISCAL STABILITY, RES. 080603, 890 One of the things that we've experienced in the City of Philadelphia -- be it good, bad, or indifferent -- is that we have traditionally had significant advocates for -- I guess it would be opposed to -- I forget the term they use. But essentially, it -- what's the term they use. UNIDENTIFIED SPEAKER: Outdoor advertising?
No, it's a certain term they use basically. They call it "visual litter" or something like that, where people essentially don't want to be able to see anything else other than the sky. And we've had these advocates every time there was an attempt to enhance the billboard program or wall wrap programs in the City to increase revenue generation both for the public and the private sector, and more often than not, they've actually won, so to speak, from their perspective. In these cities that you've 104 12/10/08 FISCAL STABILITY, RES. 080603, 890 worked in, have you experienced the level of pushback from the types of advocates who would be opposed to outdoor and public advertisement and things of that nature?
Yes, Councilor, we have. For example, two years ago, Toronto issued an RFP, and they restricted the amount of advertising that could be essentially in a zone or in a geographic area but that adver -- bus shelters would be able to possess advertising. So I'd be glad to pass on that RFP to City Council, or whoever it might be, so you can look at kind of what the parameters were. Again, when you start -- you know, the way the business model works is that we provide the structures for free to the City, using a long-term contract. And 90 percent of our contracts are greater than 15 years, and we provide those free, at no cost to the City or the citizens, you know, with the proliferation of 105 12/10/08 FISCAL STABILITY, RES. 080603, 890 advertising. And that's how it's financed throughout. So when you start to move -- as you know, as you start to move the parameters back in terms of what is allowed, then, of course, the availability in terms of the revenue share that we would be able to provide to the City is -- subsequently, the scales are tipped and then restricted. Mostly the West Coast states and the Northwest, like Oregon, Washington, they have very strong first-right amendments, so they're very, very keen to scrutinize advertising programs, because they're, you know, very much into what you've described, you know, visual pollution. They're concerned about clutter and things like this. Again, you have a very outdoor-focused communities there. And so, you know, for example, I think it was Portland had a bicycle-sharing program that they issued an RFP for, but weren't 106 12/10/08 FISCAL STABILITY, RES. 080603, 890 allowing advertising on it. So, again, you know, there was -- you know, it was a bit of a disconnect in terms of how they went. And, you know, unfortunately, they canceled their program just to review it further. I don't know if that answers your question.
And maybe you haven't experienced the level of opposition that we have in this particular city.
During the course in any of the cities that you either participated in or know of, has there been, either from your, the company's, standpoint or the municipality, a sharing of ideas as it relates to design and content during the course of the RFP, formulating the RFP, or during the course of the implementation of the outdoor 107 12/10/08 FISCAL STABILITY, RES. 080603, 890 advertisement? Did your company -- I'll ask about your company.
Did your company -- and I don't know what degree you participated, if you essentially responded to what the city put out as an RFP or --
Did we provide guidance to cities on the forefront prior to an RFP is issued; is that --
Or were you involved in any way, shape, or form of dealing with the opposition? Were you asked to sit down with some of the opposition?
Oh, in terms of some of these people who are against, quote/unquote, advertising --
Sure. As a matter of fact, you know, we were participating in the last RFP that was issued by the 108 12/10/08 FISCAL STABILITY, RES. 080603, 890 City of Philadelphia, and we met with -- I believe the organization was SCRUB. And we had a very open conversation, it went very well. You know, we talked about how we -- you know, we -- as an organization, we self-man -- we self-police our advertising. So, for example, when we arrived in Miami, they had bench advertising, which had a lot of bail bonds, "1-800-divorce lawyer" advertisements. Immediately, as soon as we took over the contract, we got rid of all of those. We just said we'll take that one on the nose and we'll definitely -- you know, we want to clean up. And we basically got rid of bench advertising; that was something that we put forth to the city.
You know, we're always looking to work with the city. You know, our motto is, you know, we want to -- you know, we're your partner, you know. And that's kind of what we want to 109 12/10/08 FISCAL STABILITY, RES. 080603, 890 do. If we're going to be in a long-term contract with the City for 5 years and a municipality for 20 years, 6 then we need to get together on kind of 7 what the city is looking for in their 8 vision, and include all of the business 9 improvement districts, the NGOs, anyone 10 who -- you know, the business influencers, 11 kind of putting it together, because it is 12 a streetscape at the end of the day, and 13 we all have to live with it. 14
All right, 15 okay. I wasn't going to bring the name up 16 of one of the advocacy groups, but since 17 you brought it up, we do have SCRUB here 18 in the City of Philadelphia; it's been 19 very aggressive in, to some degree, 20 thwarting some of the initiatives that have been put forth as it relates to public advertising. So you've had some experience; I'm glad to hear that.
Certainly. We had 110 12/10/08 FISCAL STABILITY, RES. 080603, 890 a very open and a very positive discussion when we met with them.
Okay. One of the other questions: Given what's happening in the economy, unfortunately -- and I want to acknowledge this, that in terms of our ability to get significant revenue as a result of the public advertisement, there -- and correct me if I'm wrong. It appears to be a shrinking of the advertisement dollars from the --
-- from the advertisers. And I think they're making prudent decisions on how to spend money as it relates to their being able to get the maximum benefits of the advertisement. Have you seen any significant reductions in the willingness to provide that opportunity for the municipalities?
You know, there hasn't been a major RFP in quite some time from a municipal standpoint. I'm talking 111 12/10/08 FISCAL STABILITY, RES. 080603, 890 about a large, you know, multifaceted such as, like, New York, San Francisco, Atlanta, were all out at the time Philadelphia had issued theirs.
Phoenix was out last year, smaller in scope. But, again, it would be a large program. Haven't seen a large program in the last probably a good five months. Now, you know, you've -- you know, credit to you and your team. You've obviously been doing your homework, you know, with the economy, and that's going across the board. But yes, you're seeing definitely a diminishment in terms of the marketing dollars that an advertiser such as -- and I'm talking about the national advertisers, 'cause those are typically the ones that drive the revenue stream significantly; you know, the airline industries, the auto industries, all of those major industries that are obviously 112 12/10/08 FISCAL STABILITY, RES. 080603, 890 pulling back on anything, any sort of, you know, disposable income that would be allocated towards marketing or advertising. So, yes, you're definitely seeing a dip in the revenue streams. And it's just something -- you know, again, the advertising industry is definitely similar to real estate; it's very cyclical. When the economy buckles, you know, so do those industries.
Right. In terms of locations and opportunities for advertisement -- and, again, I'm an extreme novice in this issue, but my assumption is that when people make decision as to where to advertise, they want to have one of the most visible locations to either vehicular or pedestrian traffic. Assuming that in the City of Philadelphia there's probably substantial opportunities of municipally-owned, be it sidewalks or be it buildings, and the 113 12/10/08 FISCAL STABILITY, RES. 080603, 890 assumption is that they would probably be in the extremely visible location, particularly in Center City.
And I'm not asking you to speak for an advertiser, but if there's a decision to be made about spending this limited dollar, would the likelihood that they would spend in a building that's owned by the City, that everybody sees -- and if anybody's listening, I am not talking about putting a wall wrap around City Hall 'cause I know that somebody's going to say that I'm suggesting that. Would you say that those would be --
You're absolutely correct. I mean, when we study -- when any outdoor street furniture organization studies a city, you know, the first thing they want to look at is all of the locations of the existing inventory, and 114 12/10/08 FISCAL STABILITY, RES. 080603, 890 they want to find out where the densely populated -- where the most eyeballs, essentially vehicular and pedestrian traffic, are going to see those advertisements because, again, at the end of the day, it's going to be those national advertisers, those large organizations with the large advertising budgets that will look for those types of things.
Okay. Thank you. I had a few more questions, but I'm going to defer to Councilman Jones at this time.
Good. Is there any estimate on what we receive from outdoor advertisement annually?
You know, when we were looking at Philadelphia before you could expect -- I don't know what the annual could be, but it was over -- if you were looking at a 20-year contract, you were looking at over $20 million over 8 years at a minimum, all right? 9 And it was probably more than 10 that; I don't have the figure, but it was 11 probably more than that. 12 This was -- again, those numbers 13 were at the time that the RFP was issued, 14 right? Obviously, all of that would 15 change given today's economy and 16 everything. 17 And we would also need to 18 understand -- you know, stepping back with 19 all of that, there is a significant amount 20 of ambiguity within the RFP itself, so it lends a large range in terms of what types of revenue could be distributed, you know. So with a clearer picture, then we would be able to tell you, you know, more fine points or, you know, drill down 116 12/10/08 FISCAL STABILITY, RES. 080603, 890 into what number we could get to, you know, provide to the City over the course of time.
And, very quickly, how does that compare to cities like Washington, D.C. versus New York?
It's a whole social, political, economic study. Essentially, I mean, you know, you're looking at population density. You're looking at, you know, population, tourism. You know, a small city like Miami Beach, which only has several hundred thousand, you know, citizens, but then you have tourism, which is 8 million to almost 12 million a year. You know, it starts to pave the way for how many eyeballs or, you know, individuals are seeing those advertisements. You know, Philadelphia ranks high, no doubt; it's the number-four city in terms of population, and it's definitely going to be up there with, you know, the leading, you know, I guess, 117 12/10/08 FISCAL STABILITY, RES. 080603, 890 cities and outdoor furniture contracts.
Right. In the earlier question from Councilman Jones -- I'll just follow up to his questions with respects to the estimates on the municipal contract. And I think you gave an estimate in terms of the last RFP, but I believe that the earlier RFP was limited in scope; it didn't include all municipally-owned buildings or properties. I think it was --
Right. There were restrictions on where, for example, the bus shelters themselves -- you know, there was -- in Center City alone, there was some restrictions just due to -- I think there had been some recent upgrades to some of those shelters, and there had been some ordinances -- I don't really recall watt language was. But, yes, there were restrictions on where one could advertise on -- I think those are on Chestnut Street 118 12/10/08 FISCAL STABILITY, RES. 080603, 890 and some of other major thoroughfares, and I think that had to do with collaboration with the local BID.
All right, okay. All right. I'm going to actually go to Mr. Levy next. But, Councilman Green, you had a question for Mr. Madden?
I'll actually wait till Mr. Levy finishes. And then are you both going to -- are they both going to be there to answer questions?
We'll come back. Mr. Levy, please state your name for the record.
My name is Paul Levy, and I'm president of the Center City District. Good afternoon, Councilman Clarke, Councilman Green. Thanks for the 119 12/10/08 FISCAL STABILITY, RES. 080603, 890 opportunity. I'll be very brief. But just the perspective I bring as an organization over the last years 5 that has installed a great deal of street 6 furniture, signs, maps, honor-box corrals, 7 et cetera. But since 1994, we've actually 8 managed the transit shelters on Walnut 9 Street and on South Broad Street. 10 And we've worked very closely 11 with the City's selected outdoor- 12 advertising agency, CBS Outdoor. And we 13 provide their opportunities of advertising 14 for nonprofit and cultural groups. Those 15 are areas where there was a prohibition on 16 commercial advertising, so we fronted the 17 cost on those shelters in order to provide that opportunity. Since 1998, we also managed the transit shelters on Market East, which not only provide opportunity for nonprofit and cultural groups, but the commercial revenue there goes to maintain the transit shelters, bus stops, et cetera. But most recently -- and you 120 12/10/08 FISCAL STABILITY, RES. 080603, 890 alluded to this -- in the last year of the Street Administration, I served on the Review Committee the last time there was a public advertising offering by the City. And out of those experiences, I just want to offer a few suggestions and recommendations. I think, number one, the City needs to think carefully about what it wants a achieve. Is the primary goal revenue generation, or is the primary the provision of public amenities? You can do both, but you really need to decide what you want to emphasize. It's clear, as you've heard, that a substantial revenue stream can be generated from commercial advertising, but it may actually require more commercial advertising than the City or its communities are prepared to support. I'll just give you an example. In the last street-furniture public bidding, the City was requesting about ten public toilets, each of which cost about a 121 12/10/08 FISCAL STABILITY, RES. 080603, 890 half a million each. And to support that, the advertising agencies wanted a great deal more advertising on the street; whereas, if you had taken the public toilets out, you would have had a lot less advertising. So it's a question of: What is the City is trying to achieve? If I had one piece of advice, it's really to avoid what I think is a false either/or choice. As you've alluded to, there are people who are 100 percent and categorically against any form of commercial advertising, and I think there's a middle ground that the City should seek to find. I think outdoor advertising can be used very effectively to provide public amenities like transit shelters, benches, trashcans, recreational facilities, screens to cover construction during temporary periods of time. And you can clearly do so with high-quality design. The City, I think, needs to think first about the design standards it 122 12/10/08 FISCAL STABILITY, RES. 080603, 890 wants to set for ads. And I'll give you a very simple example is, we installed banners all over Center City for more than 60 cultural, civic, nonprofit groups, and those really announce events of nonprofit organizations. And by agreement with the Art Commission, no more than 5 to 10 percent of the area of the banner is devoted to sponsorship. And so you have a discreet logo of a corporation or their name taking 5 to 10 percent, and 90 to 95 percent is the message; and, therefore, it's not commercial advertising everywhere. So there's a design standard of how much advertising is appropriate, and I think that's clearly a standard. You could do the same on basketball backboards. That is, if it was plastered across there with the name of a soft drink, people might find that offensive, but if it was limited to a size so it's appropriate. 123 12/10/08 FISCAL STABILITY, RES.
080603, 890 I think the City also needs to carefully think about where things are allowed, and that's effectively what we do in zoning. I mean, if you remember a couple of years ago, there was an April Fool's issue that announced we were going to rename it "The Taco Liberty Bell," and everybody was incredibly offended by that, but we're very comfortable with Citizens Bank Park or Lincoln Financial Field. And so I think commercial signs and advertising should be allowed appropriately in commercial districts and not in others. I would make a distinction between we wouldn't want commercial advertising on the Benjamin Franklin Parkway, but it's probably appropriate on Market East. So I think there needs to be a planning and zoning process. I would echo your comment. In the current economy, the value of outdoor advertising has probably dropped dramatically, but if the City were to go through a bidding process, hopefully, by 124 12/10/08 FISCAL STABILITY, RES. 080603, 890 the time it's finished, the economy would recover. But I would not go out today with an RFP in this environment. But that said, I do think it's appropriate for the City to move forward with issuing an RFP for street furniture. The current transit shelters we have all over the City were installed in 1994, they're years old and they're really 11 showing that wear and tear. 12 The current provider has been on 13 a year-to-year extension of his contract 14 and, therefore, is making no substantial 15 capital investments and not removing or putting in expensive graffiti-removal film, so they simply don't look up to standard. Most importantly -- and you just heard this -- is that not simply SEMUSA, but there are two or three other competitive firms. The technology has moved way beyond what we've installed in 1994. Realtime information, a whole number of technologies really could enrich 125 12/10/08 FISCAL STABILITY, RES. 080603, 890 the street furniture we have out there. So my own recommendation, to simply conclude, is: Do not think about this as a gigantic cash-generator. Think about this -- and when the current recession is over and -- and let me just say, during the current recession, when we're dealing with cutbacks and the kind of psychology, I think street furniture is one of those things that could happen sooner rather than later that would show continuous signs of improvements in neighborhood commercial areas. It would be like a psychological shot in the arm that we're installing new street furniture, we're upgrading recreational facilities. And particularly streetscape and public-area improvements paid by others is part of a coordinated public advertising program. It could enliven streets, it could improve streets, it could provide new amenities, but in accord with pre-thought-out design standards and with a clear set of what do 126 12/10/08 FISCAL STABILITY, RES. 080603, 890 we think is appropriate. You cannot put out an RFP that says, Give me the nicest-looking design and maximize the revenue, with no further guidance, which is something that needs to occur before then. But I thank you for the opportunity to come in.
Mr. Levy, are you participating in any way, shape, or form with the Zoning Code Commission.
You're not? One of the issues -- and you actually referenced it -- with respect to some zoning initiatives involved in the process of implementing a program, one of the things that I found in representing a district that includes substantial opportunities. And there have been occasions when developers or owners of property, private property, were interested in having certain advertisement attached to -- as an accessory to their 127 12/10/08 FISCAL STABILITY, RES. 080603, 890 buildings and were shot down at the Zoning Board simply because some of the advocacy groups were able to muster a reasonable amount of opposition. And, frankly speaking, I didn't agree with it, but this is America, and people have the right. And in those cases, they won. And there was actually some instances where there was actually oppositions raised, and the owner of the building eventually was successful, but they had to go through the process of hiring a lawyer, and it was time- consuming. As a part of the Zoning Code Commission -- I know you're not a part of it but I know you're aware of it -- do you think that there should be some significant thought in terms of when we ultimately redo the code or maybe prior to it that we should look at areas or certain aspects of the code to change the ability to rezone certain areas? I'll give you an example. 128 12/10/08 FISCAL STABILITY, RES. 080603, 890 There's a nonprofit corporation up in the North Philadelphia part of my district who, they own a building, and they were able to get a contract with one of the local TV stations to place outdoor accessory signage that was electronic, and there was an agreement that the TV station would be able to show their news stations, basically promoting the station.
But as a part of that, they also agreed to do public service announcements and things like that. It was on a commercial corridor, but because it was within this -- I forget the exact amount of feet. There happened to be, like, two residents that lived in proximity within that feet, and they had to go through that process to get zoning. And frankly speaking, everybody thought it was ridiculous, but because of that antiquated code, you know, it was time-consuming and it was costly in terms 129 12/10/08 FISCAL STABILITY, RES. 080603, 890 of them being able to do that. Do you think we need to look at --
Yeah. You know, I'm by no means an expert on zoning, but I think it's clear, it's appropriate that we relook at the zoning code. The technology of signage, digital, LED screens allows for things that were not possible before. And I think it can be very appropriate in some areas and very inappropriate in others, but to do it by variance is not a constructive way. I think rethinking the zoning and the criteria would be very helpful.
Okay, thank you. Councilman Green, you had some questions?
Thank you. Actually, I would just like to briefly take issue slightly with the comments that there's not a lot of money here. And I understand the economy is 130 12/10/08 FISCAL STABILITY, RES. 080603, 890 going down. But, you know, for example, personally, I'd be willing to wrap One Parkway and wrap MSB if that provided enough money to save, you know, 6 libraries, for example. You know, for 7 things like that, you can get upwards of 8 $60,000 a month for the side of a building 9 like that, depending on its visibility and 10 other things. 11 And I understand that there was a building in Philadelphia at Fourth and somewhere that had a wrap that was required to take it down that actually was getting $60,000 a month. So I think the City of Philadelphia needs to look at its assets in this time and see how we can create revenue. And I just wonder if SEMUSA, if we were to get you the address of all City-owned facilities, if you could provide for us kind of your estimate of what -- if we were to wrap libraries, we were to wrap rec centers, we were to allow Coca Cola to put a Coke bottle at the 131 12/10/08 FISCAL STABILITY, RES. 080603, 890 bottom of a pool, and really get private support for these very important institutions in the City of Philadelphia. You know, if we have to put a billboard on the library on Broad Street to keep it open, there's a lot of eyeballs there. You know, what kind of revenue can we get looking at just City-owned facilities in terms of direct money to the City of Philadelphia for allowing outdoor advertising on these facilities in any category -- wraps, whatever, all the trashcans in front, you know, having something on them, et cetera. So I don't expect you to have that answer now, but if you could provide information like that to the chair for our information, understanding you're not making a bid, I would greatly appreciate that. I have another question and that is -- and maybe Deputy Mayor Rhina Cutler can help me with this. There's a section 25 of the subway lines that the City of 132 12/10/08 FISCAL STABILITY, RES. 080603, 890 Philadelphia, not SEPTA, owns. And I don't know what -- do you know what section that is? It's like the -- it's the -- is it the Broad Street line or --
It's the South Broad Street concourse. It's excluded from SEPTA's outdoor advertising. It is something that's being explored right now in partnership with the City.
Okay. Well, I'm not just talking about the South Broad Street concourse; I'm talking about, there's a whole line, subway line, that the City owns that we lease to SEPTA, and there is outdoor advertising that SEPTA currently gets a revenue from. And I'd like to suggest that in the renegotiation of whatever deal we have to give SEPTA that line, that we retain the outdoor advertising rights for the City of Philadelphia in the future and try 133 12/10/08 FISCAL STABILITY, RES. 080603, 890 to get that revenue generated for us. I don't really have any questions except I'd like to get that information. And if you have -- I'll get you the information about that line, and perhaps you can tell us what revenue could be generated for the City as a result of the selling the right to advertise at all those stations.
Councilman, my comment went to a 15-year or 20-year agreement, that now is not the time to enter into a 15-year or 20-year agreement now. You wouldn't want to cast it in stone. I wouldn't --
Yeah. That's true. On City-owned facilities, we'd obviously just be getting the revenue 134 12/10/08 FISCAL STABILITY, RES. 080603, 890 directly.
Thank you, Councilman Green. Mr. Levy, you have to go, and I understand that. Thank you.
We'll be in touch 'cause we want to have some follow-up to this particular issue. I want to thank you so much, first of all, for being very patient in coming down. We're going to actually have some follow-up questions that we can possibly e-mail to you 'cause we're probably going to be issuing some recommendations or a report on this issue. Do you have a minute to stick around?
I certainly do. It's no problem whatsoever. Thank you 135 12/10/08 FISCAL STABILITY, RES. 080603, 890 very much for inviting me. I appreciate it.
Well, it's our pleasure. Miss Cutler, did you want to talk at all about it? I know my understanding through the grapevine is that the City's working on some things related to this matter. And I don't know if you want to talk about it publicly. If not, I understand. (Witness comes forward.)
Councilman, Rhina Cutler, Deputy Mayor for Transportation and Utilities. Yes. In fact, my office is looking at the issue of street furniture. It is our expectation that at some point in '09, we will produce an RFP for street furniture. At the moment, there are a variety of issues that we are looking at, one of which is, in fact, what will zoning current allow? And some policy questions 136 12/10/08 FISCAL STABILITY, RES. 080603, 890 related to issues such as should the City go forward with public toilets? That's really a policy question at the moment rather than an advertising question. Many of the cities that have put in public toilets have actually started to take them out due to some undesirable behavior around them, so it is one of the issues we're looking at. I think there is a sort of split for me between what might constitute street furniture versus what our other potential revenue-producing piece is, whether that's building wraps or vending machines or naming rights or whatever, that probably will not easily fit into a street furniture contract. So I know there is a group of people in the Managing Director's Office also looking at the additional pieces to that, and at some point, will try to figure out which ones are appropriate to come into a street furniture contract and which should be bid separately. 137 12/10/08 FISCAL STABILITY, RES. 080603, 890 So I don't have a great deal of information. And we are certainly in touch with all of the other big cities who have gone out on the street, to get their sense not only of their vendors but of some of the pros and cons of what they have put forth. It is certainly my sense that we will see probably nothing close to the previous bids from a year-and-a-half or two years ago because the economy just cannot sustain that for public companies, but we do think there is an opportunity. I think the other piece -- and it somewhat goes to your earlier comments about advocates for no public advertisement on the streets. And I think part of what we're going to try to figure out as part of the next RFP process is really the public participation piece. I think one of the problems that I've heard a lot about from anti-billboard advocates and anti-advertising folks is that there was not enough of a public 138 12/10/08 FISCAL STABILITY, RES. 080603, 890 process to vet what kinds of things should go into a street furniture contract, what things are appropriate and where. And so I do think we will try to figure out and have it in advance of an RFP going out, a public process where people get to weigh in on the topic. And I'm hoping that will mitigate some of the anti-street furniture folks. I would agree with Councilman Green and with what Paul Levy just said. I think, given the current financial situation of the City, people are likely to be at least slightly more receptive to the notion that we will attempt to assist in raising some revenue to assist us in keeping things open that people care about. So I think it might be slightly easier to do now than it might have been two years ago, because I think the financial situation has so dramatically changed, that people's opinions on the subject are likely to have changed as well. 139 12/10/08 FISCAL STABILITY, RES. 080603, 890
All right. That might actually work on casinos, right?
All right. I hear you. It just seems like since the City's financial situation -- and I know you have nothing to do with this, but since the City's financial situation has declined, it seems that the anti-casino advocates seem to be dwindling. Sorry. I digress. A couple of things. In terms of an RFP contract -- and I know you've been in government for a while, various stages of government -- are there ways that you could put escalators in a contract, so if you let a contract at a particular time, the climate is not that great, but if there's a certain amount of revenue raised, be it gross or net, that the City can have escalators built into that contract? So as the economy improves, we 140 12/10/08 FISCAL STABILITY, RES. 080603, 890 get more revenue for the City as opposed to just simply saying, Well, it's a bad climate, we're not going to do it. And when there may be an opportunity to get something now and more down the line as the economy improves.
I think there is not only the opportunity to do that, although, it obviously will impact your upfront revenue estimates from the companies. I think there might also be a way to just open the renegotiations if revenue hits a certain point. So even if you don't build the escalators in, although you could certainly do that, you could hypothetically create a contract that said if revenues get above this amount, we will come back and renegotiate the next five-year term or the next ten-year term. So I think there are a variety of ways you could have the City participate on the upside as well as the 141 12/10/08 FISCAL STABILITY, RES. 080603, 890 base.
All right, okay. That's something you will give some thought to as you move forward?
One other thing, and we touched on it to a degree. I guess it was Councilman DiCicco at the time, I think he was pushing -- this was a few years back, about this advertisement issue. And I actually raised it at the time, and we were a lot more fiscally sound so it didn't get a lot of traction. But we talked about at one point the ability to have actual advertisement on facilities in neighborhoods, and it got a little pushback. Certain recreation facilities -- I don't think anybody referenced libraries, but recreation in particular was -- I know I brought up in terms of sponsorship. You know, we do have certain entities that offer some levels of sponsorship. 142 12/10/08 FISCAL STABILITY, RES. 080603, 890 Like in Strawberry Mansion, my home base, you know, the Phillies, you know, contributed through the RBI league in making sure that the newly formed baseball and athletic association to a degree, but the question is, if the Phillies were able to have some sort of advertisement on the Mander Playground Recreation Center, would that increase, tastefully done, their ability or willingness to contributes to a little more to some of those facilities? And just from a policy standpoint, would or should there be any thought given to possibly advertising in actually high-profile locations on municipally-owned buildings?
I think it's probably worth looking at. I would be very careful about the type of advertising I would allow, and I might even be specific. I mean, I think there's a difference here -- and this goes back to the issue I was speaking about earlier -- 143 12/10/08 FISCAL STABILITY, RES. 080603, 890 between what should go in a street furniture contract versus what should go in an additional sort of revenue-raising contract. And so, I don't -- I mean you could hypothetically do logos on a variety of things. We currently do not do them on everything from trashcans to bags that people will ultimately put their leaves in to be picked up for collection, to sneaker contests during a basketball league. So I think the opportunity to do that sort of thing is probably there. I don't know if it's a part of street furniture or if it goes to, you know, the rest of the revenue-raising pieces, but I certainly think I will bring it back and try to figure out if there's a role for it, which of those two sides of this might be more likely.
Yeah. I just think that, you know, understanding, to some degree, we're taking baby steps. I understand at this point, looking at 144 12/10/08 FISCAL STABILITY, RES. 080603, 890 street furniture, but I just think if we're going to go full bore -- or maybe some people don't. But if we're going to look at advertising, we should look at every opportunity and kind of -- from my perspective, what I would do, I would look at the most lucrative advertising opportunities and then back my way into the RFP as opposed to putting the RFP out there and saying, This is what we want you to respond to, 'cause at the end of the day, the advertisers going to advertise in locations that are advantageous to them, not necessarily to us. So if they can't do it on a municipally-owned building, then they're going to go across the street and rent some space from somebody that owns a gas station and put a billboard across the street on that building, and we get minimal revenue; as opposed to if there was some opportunities to do it on our building. 145 12/10/08 FISCAL STABILITY, RES. 080603, 890 That's just my limited perspective.
I just -- you know, we need to go where the money and not make the money come to us sometimes.
There are -- obviously, there are some billboard rules as well.
So it wouldn't be as easy for them to go across the street and create a billboard.
Having said that, I agree with your piece. I think the first question in the public process piece of the question has to really be: How much public advertising are people willing to accept? And I think once you have that -- 146 12/10/08 FISCAL STABILITY, RES. 080603, 890 those parameters, then you need to figure out where the real dollars are. So, for example, you may get pushback on recreation centers in neighborhoods; you may get no pushback on commercial business districts in the neighborhoods. So I just don't know where the public will come down on how much advertising is appropriate. That question really will be the determining factor, I think, in now which of the advertising pieces will give the City the most money for its efforts. And so I think those are the two questions.
Okay. Not to belabor the point, and I know I'm getting a little beyond the subject matter, but from a policy perspective, do you think once you enter into determining this first phase of public street furniture and then possibly a broader concept of advertisement that 147 12/10/08 FISCAL STABILITY, RES. 080603, 890 neighborhood-specific -- and I know it's a touchy situation, issue -- strategy should be dealt with? Because we've had in the past a situation where a particular neighborhood was supportive of an advertisement initiative, and then some advocacy group who might live halfway across the City shows up at the Zoning Board and opposes that particular initiative, and it gets shot down because they had the most sophisticated lawyers or approach to opposing zoning. And from my perspective, I don't think it's fair that people in a community don't have a little more input in the ability to influence the decision than somebody else who lives in other parts of the City. This is from my perspective. I always had a problem with that.
Well, from a policy perspective, I think there are two very different responses. The first is, I think you can, in fact, create a zoning code which allows 148 12/10/08 FISCAL STABILITY, RES. 080603, 890 that, which allows certain community groups in the neighborhood to determine what is acceptable. I think it's a very different reality for what we would consider to be the core, which, for us, would be Center City, South Street to Spring Garden, river to river, and University City. So I think there's probably a lot more people who wish to weigh in on what happens in the core. And so I think you have some ability to influence the zoning code changes to respect some neighborhood responses to this type of issue. So, therefore, you take the zoning and the variance question away. And I think part of what the -- one of the problems I had with the prior RFP, having had the opportunity to go back and look at it, is it assumed there were no zoning problems to be had. So when the bidders responded, they appear to have responded as if there were no variances required and/or the City would provide 149 12/10/08 FISCAL STABILITY, RES. 080603, 890 them with whatever it was they needed to meet the numbers in those responses. So one of the first questions I asked the Law Department was, in fact: Is all of this doable? Can this be done as a matter of right? And if it can't, then we should not have an expectation in the request for proposals that doesn't meet that test. So we will carefully see what currently is allowed by code, and certainly we'll raise the issue with the Zoning Code Committee in terms of whether or not we will need legislation as part of that contract to establish what those variances will be as part of the RFP. We'd like to not issue one and then have half it have to come back out because we can't put the advertisements up where people bid on them.
All right. I don't recall that being the reason why it didn't proceed. (Councilman DiCicco enters 150 12/10/08 FISCAL STABILITY, RES. 080603, 890 chambers.)
Councilman DiCicco, how you doing, sir? Let the record reflect that Councilman DiCicco is here. Yeah, I don't recall that being the reason why it didn't proceed because there were opportunities --
No, no, no. What I'm saying is, it is one of the results that would have occurred.
All right. So you anticipate that it would have been, 'cause we did get a respondent, and it was -- but anyway...
Okay. It did not appear so to me, but that was just my response. So it will need to be vetted in advance of anything going on.
Okay, that's fine. I just wanted for the record to say that that wasn't the reason why it didn't 151 12/10/08 FISCAL STABILITY, RES. 080603, 890 move ahead.
Okay. I'm pretty much there. Councilman DiCicco, Councilman Green had -- he's been -- Councilman Green?
I was watching this on TV in my office, and I just had to come up when I hear about advertising.
Thank you, Mr. Chairman. I just had a quick question, which is: What is the area of the subway line that we don't own?
What area of the subway line do we own that we lease to 152 12/10/08 FISCAL STABILITY, RES. 080603, 890 SEPTA?
We own the South Broad Street line and we own a portion of the Market-Frankford line.
Okay. So that's the area that I was talking about for your benefit and for others in terms of the ad revenue. Maybe we can reserve that for ourselves, or do we already?
And there is a current vendor in place that manages the advertisement for both the City and SEPTA in the concourse.
Okay, great. So I just wonder if we can look to extend our rights to have the advertising revenue as part of our agreement to continue to lease the lines to SEPTA as a revenue- generating measure since we do own the property and have been able to get there with them. 153 12/10/08 FISCAL STABILITY, RES. 080603, 890 And just -- Councilman Goode's having hearings soon on the whole concept of those lines, and if you could have that as maybe an answer to one of questions at that hearing, it would be helpful. I don't expect you to answer it today 'cause I just am raising it.
I will be testifying at Councilman Goode's hearing. But one piece that I would just like to say, which is part of the confusion that exists is that the -- when I went back to start to look at lease agreements for the concourse and some of those spaces, part of the problem is that they truly reference agreements with the Pennsylvania Railroad from 1913, and SEPTA didn't even exist, and so it's a very convoluted set of documents. The problem with exchanging it for the rights for SEPTA to operate is, I can't quite figure out what would happen if they said no. I mean, obviously, we can't have the system shut down. 154 12/10/08 FISCAL STABILITY, RES. 080603, 890
But this goes to the whole issue of we should -- and I hear it on a regular basis and I'd prefer to not. It will take on a life of its own, I assume, for Councilman Goode's hearing, so I'll save most of it. But yes, I will bring the information.