A controversial contract that would add desperately needed cash to Muni’s coffers byincreasing the number of bus shelters and the amount of advertisements on those structures awaits a final stamp of approval from city officials.
Under a 15-year contract approved by Muni in September, advertising giant Clear Channel Outdoor would maintain the transit agency’s bus shelters and kiosks in return for the right to plaster the structures with advertisements. The contract is expected to funnel more than $300 million in advertising revenue to the cash-strapped agency over the next 20 years — with a $5 million one-time payment in the first year.
The contract, which would run from Dec. 10 to Dec. 9, 2022, and could be extended to 2027, has pitted city officials and some transit advocates, who say cash-strapped Muni needs the additional revenue to improve services, against critics who say the advertisements would contribute to urban blight.
The deal was approved by the Board of Supervisors Budget and Finance Committee on Wednesday and will head to the full board without recommendation for final approval next week.
If Muni extends the contract to 2027, it would receive a minimum of $306 million over the 20-year period, according to the deal documents. Muni officials have estimated the oft-criticized transit system —which carries 672,000 passengers each weekday on 1,000 buses, trains and trolleys — would need a drop of $150 million to develop faster and more reliable service.
The overall concept of the contract is not new — Muni has contracted with advertising and maintenance services for transit shelters since 1987. The current deal with CBS Outdoor, which expires Dec. 9 after 20 years, generates $440,000 each year for The City. Muni does not share in any of the revenue generated through the advertising under the current deal.
However, the new contract with Clear Channel Outdoor pays Muni a minimum average payment of $15.3 million to $19.1 million a year over the life of the 20-year contract, in addition to a $5 million one-time payment within 30 days of the contract approval. The payments include a cut of the advertising revenue.
Under the deal, Clear Channel Outdoor would be required to maintain Muni’s 1,100 existing transit shelters and 39 kiosks. The company would gain the exclusive right to sell print advertising on the structures, while also having the option to install an additional 400 shelters and 111 kiosks with Muni’s approval.
However, resistance to the deal has culminated into a nonbinding proposition being placed on the November ballot, authored by Supervisor Jake McGoldrick, stating there should be no increase in the number of advertisements on city-owned property, including bus shelters.
“It’s about making money,” said Dee Dee Workman, executive director of the nonprofit San Francisco Beautiful, which is against the contract. “While they line their pockets, San Francisco residents suffer.”