On Monday October 26th over 70 people attended A Forum on the Future of Bus Shelters and Street Furniture sponsored by the Mayor’s Office of Transportation and Utilities. The forum began with a presentation on the City’s intentions to issue an RFP for bus shelters and street furniture by Deputy Mayor Rina Cutler. Joe Minott of the Clean Air Council and the Next Great City Coalition shared his perspective on how a well structured bus shelter and street furniture contract can increase transit usage and improve the visual appeal of the City. Mary Tracy, who leads SCRUB: The Public Voice of Public Space Spoke about limiting the role of advertising in public spaces. Representatives from the leading street furniture vendors: CBSOutdoor, Cemusa, JCDecaux and Clear Channel spoke about their work in cities around the world. All answered questions posed by the audience.
While various different types of street furniture have dotted city streets for centuries, the development of large scale “Street Furniture Programs,” (SFP) where cities install an array of bus shelters, benches and kiosks in a coordinated and strategic fashion is something relatively new. They are more important than they used to be too. Since the early 1990’s the City of Philadelphia has earned about $10 million from the advertising that is part of Philadelphia’s bus shelter contract. There are 260 shelters managed by CBS Outdoor on behalf of the city, 27 “Arts in Transit” shelters in Center City managed and maintained by the Center City District, 12 sculptural shelters along Chestnut Street in Center city and non-advertising shelters maintained by CDCs and private institutions.
The release of a Request For Proposals (RFP) for a bus shelter and street furniture program presents an opportunity to markedly expand the amenities offered and the revenue generated for the city. Boston, Chicago and Washington have made similar deals in the last decade. Boston (with Wall/Decaux) installed approximately 400 bus shelters and a variety of newsstands, information/advertising kiosks & automated public toilets (APTs) and is on track to receive an estimated $21.3 million dollars over a 20 year period (~$1 million per year). Chicago (with JCDecaux) has around 2,000 bus shelters, with assorted newsstands, information kiosks and the like and expects to bring in nearly $300 million over twenty years (~$15 million per year). Washington DC (with ClearChannel) is installing 700 bus shelters as part of a 20 year contract that is estimated to return to the district $150 million in revenue. Several factors influenced these SFPs and are important to keep in mind in Philadelphia.
Just from comparing Chicago and Boston we can see several of the factors affecting their respective SFPs. It is little wonder that with 4.2 times more bus shelters and back-lit information /advertising panels, Chicago makes far more ad revenue than Boston. However, there is no direct relationship between the number of shelters in a city and the amount of revenue made. Chicago makes around 14 times more money than Boston because its market is worth more. Research by PriceWaterhouse Coopers suggests that more money is made and consumed in the Chicago metropolitan region ($460 billion) than in the Boston region ($290 million). Philadelphia does slightly better than Boston, with a regional GDP of around $312 billion, but does not come close to Chicago. The market, however, does not determine everything. Cities may require different levels of maintenance or the distribution of shelters in neighborhoods that do not draw in as much advertising revenue. These demands come at a cost. Companies do not measure their profit in simply the amount of money they earn, but the percent return on the investment, and the more they invest in both the short and long term, the less the amount of their profits they are willing to share with the City.
Perspectives Heard at the Forum
Joe Minott and Mary Tracy (SCRUB) both emphasized that a new Street Furniture Program must, in fact, increase the number of bus shelters in low income neighborhoods, have a proactive maintenance schedule, be well integrated into SEPTA and be well designed. This approach met with little resistance from the attending vendors (CBS Outdoors, Cemusa, Clear Channel and JCDecaux). JCDecaux noted that 30% of their bus shelters earned 75% of the revenue, and it was clear that vendors have experience providing street furniture in all kinds of neighborhoods. More importantly almost all vendors noted that the cleanliness of their shelters was in their own best interest. Vendors, in the end, cared most about clarity in the RFP and making sure that all rights and responsibilities were clearly articulated.
The public who attended were concerned about three different issues, all of them specific to Philadelphia. Many who showed up cared deeply about supporting the arts through discounted advertising. The Deputy Mayor for Transportation and Utilities, Rina Cutler, noted that the City is committed to continue what is popularly known as the Arts-in-Transit program. There will be new guidelines and local non-profit arts organizations will be able to continue to promote their shows at
A representative of the Newsstand Association noted the concern of newsstand owners to keep the revenues from full-scale exterior ads on their stands. Newsstand owners frequently pay mortgages on their newsstand. The association requests that newsstands not be part of the RFP, but if they are to be included, the association wishes to work with the administration. The Deputy Mayor noted that she would be happy to meet with the association. The outcomes of such discussions will have real consequences on the value of other advertising in the city, and how much vendors are willing to pay. In fact, currently the City’s contract has a non-compete clause. If the City must compete with newsstand advertising, the value of the City’s advertising is likely to diminish and less revenue will come to the City.
Several noted that cities across the US have used SFP’s to fund bicycle amenities and bike sharing programs. These audience members hope that the upcoming Philadelphia SFP would provide an opportunity for the same in Philadelphia. Additional amenities such as bike racks and benches come at a cost and require additional revenue or a reduction in the revenue returned to the City. The addition of a bike-share system is even more complicated. In Montreal, each bike must generate over $1,000 of revenue per year to cover its costs. In Boston, each advertising panel brings in $888 dollars of revenue to the city per year. A bike share system in Philadelphia is not impossible, but the questions of how big must it be to work and how much less revenue the City is willing to accept, still looms large. The City has a study underway that outlines the market for a bike-share system in Philadelphia. It should be completed by the end of the year. It is not expected to be part of the street furniture RFP at this time.
So far the City has received over 1,000 responses to our online survey regarding street furniture and what respondents would like to see in the next contract.
• A majority of respondents suggested that real-time / next arrival schedule information should be an integral part of the next generation of bus shelters, followed by route maps and clear panels to be ale to see what is around the shelter. We will work with SEPTA in order to provide this information.
• Over 91% of Philadelphian’s think it is important to generate advertising revenue to support the City’s general fund and 66% are willing to add more advertising to generate additional revenue.
• Philadelphians are most excited to see Bus Shelters, Bike Shelters and Benches
As the integration of a Bike-Share system reveals, providing the amenities that citizens want within the context of a public-private partnership is complicated. The City sees an opportunity to inject non-tax revenue into the General Fund. All of the other issues such as low cost add space for arts and culture related non profits, a bike share system, and allowing advertising on privately owned newsstands has a cost to the city. Finding the right balance between revenue and amenities will largely dictate the amount of revenue the City will realize from this program.