City to seek ads on public property in the ‘near future’

Last week, City Council amended the zoning code to allow for the creation of a municipal advertising program, in which advertisements promoting commercial products or political or religious ideas could appear on city-owned property. The program, sponsored by Council President Darrell Clarke, is intended to generate more revenue for the city and school district without raising taxes.

Though it’s been almost a year-and-a-half since Clarke first floated the bill, changing the zoning code was the easy part. The bill adds a subsection to the Non-Accessory Sign portion of the code saying that those regulations—which are intended to control private outdoor advertising in the city—will not apply to signs on municipal properties.

It’s now up to the Nutter Administration to implement the program. The Department of Public Property will need to identify what properties will be made available for advertising, the Planning Commission must create separate design and spacing regulations for signs on city properties, and the city has to issue a request for proposals (RFP) from potential vendors.

In a Council committee hearing on the bill in late April, representatives of the Nutter Administration said they were working to identify the properties and issue an RFP, but would not commit to a timeline. Two legal issues needed to be considered before the program could move forward, according to City Solicitor Shelley Smith.

According to testimony from Smith and Cozen O’Connor attorney Jonathan Lichtenstein, there was a question about whether public properties paid for with tax-exempt bonds could be put to advertising use by third parties. Smith did not immediately return a call from PlanPhilly, and Lichtenstein declined to comment, citing a firm-wide policy about talking to reporters. It isn’t clear how he has been involved in looking at the program beyond testifying before the Rules Committee.

The other legal question involves the First Amendment to the U.S. Constitution, which says that governments can’t make laws abridging the freedom of speech. The restriction is not absolute. Governments don’t have to abide public obscenity, for example, and they have leeway to regulate the time, place, and manner of certain types of expression.

“It’s not a hard and fast rule,” said Andrew Ross of the Law Department. “Generally, no [you can’t regulate speech], but there are a lot of exceptions where you can do it—but it depends very much on what you’re doing and how severely you’re doing it.”

Ross said that in order to regulate the content of public advertising, there has to be a “compelling government interest.” For example, if the City were to reject ads that promote alcohol or cigarettes, it could argue that the government has a compelling interest in keeping such messages away from minors. It would also argue that banning alcohol ads on municipal property is the “least restrictive” regulation available, because advertisers could still post those messages on other signs throughout the city.

Since the advertising vendor would be selected through an open RFP process that would presumably clarify where ads could go and what messages were off limits, Ross said the government could also argue that, by submitting a bid, the selected vendor had agreed to the regulations beforehand.

“Depending on the specifics,” Ross said, “it’s sensible to say there’s going to be some content restriction based on compelling government interest.”

The biggest question is one of revenue: how much money is enough money to put commercial ads on Philadelphia’s civic assets?

PlanPhilly asked Nutter spokesman Mark McDonald if there were a certain amount below which the city would decide that the program just isn’t worth it.

“Not really,” McDonald replied. “We want to move ahead on a program that we think will be successful, so we’re not thinking in such terms as minimum amount.”

Council President Clarke’s office said that any revenue projection at this point is an “educated guess,” but that Clarke hopes to secure revenues comparable to what SEPTA and other municipalities have been able to generate through advertising programs.

Last year, SEPTA earned $11 million for its general operating budget through its advertising program, and is on track to generate $14 million this year, according to Heather Redfern, SEPTA’s press officer. That amount accounts for roughly two thirds of the total income generated through the ad program; the other third goes to vendor Titan Outdoor, which manages every aspect of the advertising program.

Chicago recently joined an agreement with a vendor to maintain 34 digital billboards on city property. Under the program, the city is guaranteed at least $15 million in 2013 and at least $154 million over a period of 20 years. New York City is guaranteed $999 million over 20 years through a contract with Cemusa, a street furniture advertising vendor. Sprint, “The Official Wireless Partner of the City of San Diego,” will provide the government up to $500,000 for the exclusive right to market discounts to municipal employees there. Several cities operate systems of publicly owned advertising kiosks.

In Philadelphia, potential vendors—some of whom testified in support of the bill at the Rules Committee hearing in April—include Titan Outdoor, Cemusa, and CBS Outdoor.

Jon Roche of Titan, which manages SEPTA’s program, said “it’s too early to say” what the revenue potential of a municipal advertising program in Philadelphia is. He said the city needs to identify what properties it will make available before a reliable revenue estimate can be made.

As far as Council President Clarke’s particular desire to see city trash trucks wrapped in trash-bag ads, Roche said there is “no precedent” that he knows of for such a program, and therefore no way to say how much money it could make.

Planning Commission Director Gary Jastrzab said the Commission has not yet begun drafting regulations for the municipal advertising program, and doesn’t have a timeline for when it will begin. Jastrzab and Deputy Mayor Alan Greenberger deferred questions to Public Property Commissioner Bridget Collins-Greenwald, who did not return calls from PlanPhilly on Monday or early Tuesday.

Regarding the question of timing, Mark McDonald would only say, “In the near future, we’ll have an RFP.”