Emanuel unveils 20-year deal with French firm to put up digital signs on city property
BY FRAN SPIELMAN City Hall Reporter email@example.com October 31, 2012 4:32PM
A CTA rider waits for a bus at a JCDecaux shelter on the North Side. | Sun-Times library
Updated: December 2, 2012 2:12PM
Mayor Rahm Emanuel on Wednesday introduced and defended his plan to cut a 20-year deal — potentially worth $270 million to the city — with a clout-heavy partnership that includes the French company that holds Chicago’s controversial bus shelter contract.
The agreement calls for JCDecaux and its partner, Interstate Outdoor Advertising, to put up 34 digital signs on city property adjacent to the Kennedy, Dan Ryan, Stevenson and Eisenhower Expressways and the Chicago Skyway and Illinois Tollway.
In exchange, the joint venture would guarantee Chicago taxpayers $15 million in 2013 and $154 million over the 20-year life of the contract. The city hopes to generate as much as $270 million over 20 years through a revenue-sharing arrangement that starts with 50 percent of the first $25 million in advertising revenue raised.
Digital billboards could not exceed 700 square feet and would generally be prohibited within 125 feet of residential districts; within 100 feet of water ways and public parks, and within 500 feet of both Lake Shore Drive and Michigan Avenue between Oak Street and Roosevelt Road.
The mandatory separation would be reduced by 25 percent for digital signs that go dark between 12 a.m. and 5 a.m.
Interstate donated $10,000 to Emanuel’s campaign for mayor.
JCDecaux was awarded the 20-year bus shelter contract in 2001 after Mayor Richard M. Daley’s administration bypassed a rival bidder who promised the city $39 million more over the life of the contract.
Decaux guaranteed the city $307 million, nearly half of that sum to be paid in the last five years.
New York-based Adshel, Inc., one of four losing bidders, charged at the time that Chicago taxpayers lost millions when City Hall added high-rent locations on North Michigan Avenue and State Street and gave JCDecaux free monthly utilities and the go-ahead to make electrical hookups to city street lights.
After introducing the new ordinance at Wednesday’s City Council meeting, Emanuel was asked why he didn’t put the digital billboard plan out to bid to see if he could get an even better deal for taxpayers.
“We have 1,300 billboards, and we get $1 million. Here, we’re talking about 34 billboards and you get $15 million. I didn’t need to go to Harvard business school to know that’s a better deal and it’s the right deal for the city,” he said.
The mayor didn’t blink when reminded that Decaux was accused of shortchanging the city on the bus shelter contract.
“I can’t speak to the past. What was done [is done]. We’re doing things differently and actually to the benefit of the city,” Emanuel said.
Chief Financial Officer Lois Scott said the competition was the “most open, transparent and competitive process for anything related to municipal marketing.”
An evaluation committee with representation from 10 city departments met with every vendor deemed qualified. An eight-member advisory council reviewed proposals with an eye toward aesthetics.
Five firms submitted ideas related to billboards and all five got to present their ideas before the competition was narrowed to two finalists which received a list of 15,000 pieces of city-owned property to determine which had the “greatest value” to taxpayers.”
“It was as robust, if not more robust than an RFP would have been. . . . We have done an impressive job on process and making sure every vendor was treated equally,” Scott said.
The ordinance authorizing the “city digital network” also declares Emanuel’s intention to reduce the number of privately owned billboards.
“We’re providing the outdoor advertising industry with an opportunity to trade in up to five billboard sites in exchange for one new [digital] site, but each time that happens, it would come to the City Council” for approval, Scott said.
In the bus shelter negotiations, Decaux was represented by the law firm of Greenberg Traurig. Former Hispanic Democratic Organization chieftain Victor Reyes, Daley’s former intergovernmental affairs chief and political enforcer, was one of the firm’s Chicago partners. At the time, Reyes was a CTA board member. Then-CTA President Frank Kruesi played a pivotal role in the selection and had input in the final negotiations.
City Hall has also chosen Vector Media to sell advertising on 400 BigBelly garbage cans in the downtown area and share 50 percent of those revenues with Chicago taxpayers. Yet another deal is still in the works to find a corporate sponsor for citywide recycling.