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HomeMy WebLinkAboutStaff Report 4197 City of Palo Alto (ID # 4197) City Council Staff Report Report Type: Action Items Meeting Date: 10/28/2013 City of Palo Alto Page 1 Summary Title: Digital Message Center Title: Policy Direction on the Development of a Digital Message Center on a City-owned parcel along US 101 From: City Manager Lead Department: City Manager Recommendation Staff recommends that Council provide policy direction on the development of a Digital Message Center on a City-owned parcel along US 101 in the embankment near the end of Colorado Avenue. Background In an effort to support the City’s economic development, especially to fund needed City infrastructure, the City has been considering many options for generating new revenue streams. As recently as the September Infrastructure Committee, the concept of a digital message center) (also known as a digital billboard or readerboard) on city-owned land along US Highway 101 was discussed as a potential for providing a significant new revenue stream for the City. Such an ongoing revenue stream could finance certificates of participation (COPs), which could fund a substantial portion of the City’s infrastructure. Over the past several years, staff has explored several sites as potential locations for a digital message center. One particular opportunity along US 101 near the termination of Colorado Ave, which is a City-owned property (Assessor Parcel Number: 127-01-105) has been identified as the most desirable location for this purpose. (Attachment 1). Based on the site’s location and its apparent eligablility for development of a “billboard” under the California Department of Transportation (CalTrans) rules, staff approached several outdoor advertising experts to gauge interest and explore potential deal structures. As a result, staff can confirmthat it is indeed a very desirable location and could generate premium advertising revenues. City of Palo Alto Page 2 Several firms exist that could partner with the City, not only on the development of a digital billboard project (including all permits, stakeholder engagement, and construction), but also with the ongoing procurement of advertisers to generate advertising revenues. At this stage, it appears this method of operation could yield the maximum revenue return) for the City of Palo Alto, while maintaining City control of the number of advertising spots the City could keep for City messaging for events of community interest, etc. Discussion Staff is seeking the Council’s general direction as to whether (and how) to move forward with this concept. Further, staff is looking for Council direction on how to strike the balance between the potential for City revenues and promotion/support for local merchants and the visual and other impacts of the sign. Although these concepts will ultimately be explored in detail for any proposed digital message center, it would be useful for Council to provide staff with some preliminary feedback prior to drafting the necessary RFP to solicit specific proposals for consideration. This particular location is incredibly valuable from an outdoor advertising perspective. Given an estimated 325,000 views (impressions) per day and the demographics of this market, the prospect of placing a digital message center in this location is considered very desirable to advertisers. Many public agencies such as the County of Alameda and cities of Oakland, San Jose, Sacramento, and East Palo Alto have either already developed or are developing digital message centers. It is expected that any firm chosen as the City’s partner on a potential project would work with the City to develop a community engagement plan to seek involvement/ participation from community members and stakeholders. Staff is recommending limiting the scope of this outdoor advertising project to this specific project and not pursue other types of outdoor advertising. Given the unique location of this site along the 101 corridor, staff believes specific changes can be made to sign ordinance that would not allow any other digital reader boards in the city. Limiting visual impacts to the corridor and surrounding area,will be an important consideration. Staff recommends that the Council provide policy direction regarding the development and operation of a digital message center. If there is enough interest that would lead to development of an RFP, that RFP for sign developers could be reviewed at the committee-level prior to approval by the Council and distribution to firms that specialize in the development of City of Palo Alto Page 3 such signage. If an RFP were issued and a proposal accepted, staff would return to the Council for further review and consideration of a project, including a detailed analysis of potential revenues, necessary code/ ordinance changes, and a subsequent implementation plan including community/ stakeholder involvement, and environmental review. Timeline If the Council approves the concept, staff would bring an RFP to the Council for approval in early 2014. Upon the release of such an RFP, staff intends to return to Council with the award of contract to a qualifying firm, including our recommendations for deal structure and a refined estimate of financial and other benefits thereafter. Given the intended high level of community engagement, staff anticipates that a project could be conceptualized and return for Council consideration within six months, with implementation to occur within one-to two years. Resource Impact Staff estimates that the potential annual revenue from a DMC could be in the range of $700,000 to $1M. This range of figures is entirely dependant on the numberand size of outdoor ads, and other factors. The City could negotiate a compensation agreement with a firm including but not limited to a guaranteed minimum payment, a percentage of total revenue, and advertising spots (flips) for City purposes (i.e. City-Sponsored Events or Programming). In order to evaluate the proposals, and to provide context, background, and assistance with community meetings to the firm awarded with the contract, staff time would need to be devoted to this effort from the following departments: City Manager’s Office, City Attorney’s Office, Administrative Services, Planning & Community Environment, Development Services, Public Works, and Utilities. Policy Implications In order to facilitate a digital message center at this location, the City would need to adopt several narrow changes to the Sign Ordinance. A zoning change may also required. It is expected that the qualifying firm would work with the appropriate City/ Regional/ State authorities for approvals, and engage the community for input during the development process. City of Palo Alto Page 4 Environmental Review Any necessary environmental reviews would be brought forward as part of any proposed project. Attachments:  Attachment 1: Potential Site for DMC (PDF) Matadero Creek Community Building Colorado Substation B Fueling Station A C ColoradoPump Station STOCKTO MORRIS DRIVE GREER ROAD MADDUX DRIVE GREERR BAYSH EAST BAYSHORE ROAD BAYSHORE FREEWAY WEST BAYSHORE ROAD MADDUX DRIVE EAST BAYSHORE ROAD WEST BAYSHORE ROADCOLORADO AVENUE OTTERSON COURT GENEVIEVE COURT MADDUX DRIVE HIGGINS PLACE GREER ROADCOLORADO AVENUE EAST BAYSHORE ROAD BAYSHORE FREEWAY WEST BAYSHORE ROAD SIMKINS COURT WEST BAYSHORE ROAD GREER ROAD LAWRENCE LANE COLORADO AVENUE CLARA DRIVE SANDRA PLACE CLARA DRIVE CLARA DRIVE ER ROAD AMARILLO AVENUE MADDUX DRIV TANLAND DRIVE EAST BAYSHORE ROAD WEST BAYSHOR BAYSHORE FREEWAY BAYSHORE FREEWAY BAYSHORE FREEWAY BAYSHORE FREEWAY ME TRO CIRCLE MO F F ETT C IRCLE COLORADO PLACE COLORADO AVENUE Fallen Leaf Street Berryessa Street Boronda Lane Tahoe Lane Lake Avenue Donner Lane Almanor Lane 907 925 921 931 927 912 918 924 942 936 930 954 931 2984937 947 919 913 943 948 3124 938 930 3108 3116 3113 3119 25 3132 31093101 7 3142 3134 3141 3149 31333125 3126 3117 31183110 3149 3125 3131 3137 3143 3185 31583150 166 3167 3198 3202 3173 3192 3179 3191 3197 201 32 31843176 3210 3218 3226 3209 3219 3229 3239 3249 3259 3269 3279 9 3250 3258 3242 3234 978 982 2882 957 965 971 979 973 993 983 962 958 57 963 969 930 936 2924 2944 2914 968 1098 1095 1021 1075 1071 1049 1012 1016 2755 10621072 1076 2809 2767 27912779 2792 2808 994 2826 990 986 2842 2862 2964 3024 3032 3040 3048 3056 3064297929632947 972 966 960 29722950 29652945 2925 957 965 956 946 978 1013 1023 3095 937 941 951 961 971 3094 3102 960 2928 2970 2960 991 988982 985981 975 2993 1003 1001 29752965 970 3016 2931 968 3023 3039 3055 3068 3052 3020 3036 3017 3029 3041 3053 3065 3077 3084 3089 30711010 1020 1030 990 978 3160 3136 3124 3112 1044 1032 31133107 1088 1066 3113 3125 3137 3149 3161 316831603152 31443136 3128 3112 3120 3148 31553119 3189 31813173 31653157 31493141 3133 3125 3117 10931083 3109 3101 107310631053 10431033 1034-1036 1040 1042 1044 1046 1048 1050 1052 1054 1056 1058 1060 1062 1064 1066 1068 10701072107410761078 1014 1010 10311005 1083 1079 1073 1047 10261022 1052 1056 1046 1042 1036 1032 10241020 1064 1060 10701074 1084 1080 1090 1094 2873 2857 2841 2963 2955 2960 2956 2905 2889 1031-1045 1030 1040 1034 1050 1044 1054 1011 297829722968 2901 2903 29072905 2909 2911 2913 2915 2917 2919 2850 1125-1139 1068 1074 2800 1066 1093 1072 1094 3281 2995 2891 32012925 1082 3241 1047-1061 1063-1075 1077-1091 1095-1107 1109-1123 1143-1151 2999 2860 1098 1181 1183 1185 1189 1199 1180 1182 1186 1188 1190 1192 1198 329832923290328832823280327832723198319231903188318231803178 1111 1113 1115 1119 1100 1102 1106 1110 3180 3182 3186 3188 3190 3192 3198 1112 1116 1118 1120 1122 1126 1128 1130 1151 1153 1155 1159 1150 1152 1156 1158 1160 1161 1163 1165 3280 3282 3286 3288 3290 3181 3189 3281 3289 3291 3270 3120 1199 0 3199 1080 2800 1105 2870 1129 1179 1178 3292 3178 1167 1132 3285 3299 Greer Park Sterling Canal Fuel Storage Area Emily Renzel Wetlands MunicipalServiceCenter Greer Park This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend 1000 ft radius from Project Site Project Site 0'400' 100 0 F o o t R a d i u s CITY OF PALO ALTOINCORPORATED CALI FORNIA P a l o A l t oT h e C i t y o f APRIL 1 6 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2012 City of Palo Alto rrivera, 2012-10-03 11:49:30sign map coloradoave tt (\\cc-maps\gis$\gis\admin\Personal\rrivera.mdb)