20-year deal for digital billboards on expressways gets city approval
BY FRAN SPIELMAN City Hall Reporter email@example.com December 12, 2012 12:48PM
A digital billboard at Cortland and N. Ashland can be seen from the Kennedy Expressway. Photographed on Wednesday, December 12, 2012 in Chicago. | Richard A. Chapman~Sun-Times
Updated: January 14, 2013 7:23AM
The landscape around Chicago area expressways will light up with 34 digital billboards — a dozen of them adjacent to the Kennedy — thanks to a 20-year deal approved Wednesday that could generate $270 million to offset future tax increases.
By a 43-to-6 vote, the City Council signed off on Mayor Rahm Emanuel’s plan to let bus shelter operator J.C. Decaux and its partner, Interstate Outdoor Advertising put up, 100-foot tall digital signs on city property adjacent to the Kennedy, Dan Ryan, Stevenson and Eisenhower Expressways as well as the Chicago Skyway and Illinois Tollway.
In exchange, the companies have guaranteed 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.
No votes were cast by Aldermen: Bob Fioretti (2nd); Pat Dowell (3rd); Scott Waguespack (32nd); Nick Sposato (36th); John Arena (45th) and Ameya Pawar (47th).
“This has parking meter lease [written] all over it. It’s deju vu all over again,” Fioretti said.
“Are all of us supposed to say this amount of money is the highest and best we can get for a 20-year lease? I don’t know that and I suspect most of us don’t know….Technology is rapidly changing. Twenty years is an awful long time.”
Fioretti further argued that digital billboards would “deface one of our best assets” — the Chicago skyline — at a time when the trend across the nation is to ban digital billboards.
Downtown Ald. Brendan Reilly (42nd) countered that comparisons to the widely-despised parking meter lease are a red-herring.
“We’re taking otherwise useless, worthless land adjacent to our expressways and monetizing it. We’re creating a new asset — an asset we don’t have today,” Reilly said.
“Am I in love with this proposal? No. But, it’s the right thing to do for Chicago taxpayers.”
Reilly scoffed at Fioretti’s claim that digital billboards will destroy the Chicago skyline.
“The last time I checked, there is not a coffee table view of our lovely expressways,” he said.
After the vote, Emanuel rose to challenge aldermen who dared to oppose the new revenue stream.
“If you have other ideas where you want to produce the $15 million from your residents, bring it up. I haven’t seen it. If you want to give me…$15 million in service cuts, I haven’t seen that,” the mayor said.
Emanuel noted that Chicago’s 1,300 billboards generate just $1 million in annual revenues.
“We’re gonna produce hundreds of millions of dollars so we continually don’t have to ask our residents for that money. We’re gonna make the [billboard] industry pay it — all these companies that have been taking our taxpayers to the cleaners,” the mayor said.
A map distributed to aldermen identifies 38 potential billboard locations. They include: 12 on the Kennedy; 10 on the Dan Ryan; six apiece on the Stevenson and Eisenhower Expressways and one each on the Bishop Ford, Chicago Skyway, Illinois Tollway and Edens Expy.
The signs will have static image that changes every 10 seconds and a 20 percent ceiling on ads promoting alcohol products. They are expected to be installed during the third quarter of 2013 and must be replaced every nine years to reflect the latest technology.
The contract initially included a nine-year renewal option without City Council approval, a point of contention with aldermen, who amended the contract to require their sign-off.
Los Angeles recently lost a challenge to its digital billboard ordinance. Chicago is bracing for a challenge.
James R. Daly, an attorney representing billboard competitors, has warned that the billboard deal was on shaky legal ground, hinting strongly that the ordinance approved Wednesday could be tied up by a costly legal challenge. “It restricts speech within that 500 foot area adjacent to the expressways except for the city and its chosen partner. . . . The city is favoring itself to the exclusion of all other companies and all other property owners. In order to do that, you need a compelling reason,” Daly told aldermen earlier this month.