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Big bucks for city in digital billboards, plan says
Monday, September 29, 2008

An emerging plan promises to put private dollars into Pittsburgh coffers, but those big bucks would come only from more of the digital billboards that have entangled city government all year.

A draft plan by California-based consultant The Active Network, picked by Mayor Luke Ravenstahl's administration in January 2007, calls for a new network of electronic signs -- among other things -- to bring millions of dollars to the city.

By licensing 15 big billboards on city property, along with other measures like selling pouring rights to beverage and food vendors and partnering with banks, the city could rake in $4 million a year by 2011, according to the plan. That would almost erase that year's projected deficit.

Do everything except the billboards, and the windfall dips to $1.6 million.

"Digital billboards are one of the biggest sources of revenue" in the plan, said City Council Finance Chairman William Peduto, who sits on a panel that is weighing the plan. The panel, he said, seems opposed to large signs, but believes the technology could be used "on a lesser scale."

Raising private dollars is part of the city's recovery plan passed in 2004, which estimated that partnerships would bring in $1 million a year by 2007. Instead, no money has been raised, as the administration was slow to pick a consultant, execute a $75,000-plus-expenses contract and line up funding, even after council approved it in March 2007.

The Active Network started work in January. A month later, news broke that Lamar Advertising got approval for a 1,098-square-foot digital billboard, Downtown. That approval -- granted without public hearings or votes, later revoked, and now the subject of a zoning fight -- led to the resignation of Urban Redevelopment Authority Executive Director Pat Ford and calls by some for state or federal investigations.

Nonetheless, the first plank in The Active Network's plan, floated to officials this month, is signage.

It calls for "a network of strategically placed digital displays" run by a private firm. The city would get 15 percent to 20 percent of the ad time on the frequently changing displays for public service announcements and emergency alerts, plus a percentage of the ad revenue.

The consultant's call for new electronic billboards on city properties "is probably going nowhere," said city environmental planner Dan Sentz. "We have a lot of billboards already around the city, and people don't necessarily want to see more."

The panel hasn't ruled out smaller digital ad displays in city buildings and parking garages.

The plan also asks the city to consider digital displays in elevators, plus ads on trash cans, city vehicles and in public rest rooms.

Signs in parks can be particularly lucrative. Cranberry this year inked a $2.2 million deal allowing a Dick's Sporting Goods sign in a new park within view of the Pennsylvania Turnpike.

Some city officials are leery of over-saturation, especially in parks.

"If [any] advertising would be involved, it has to be in an area where the public would expect to see it," said Planning Director Noor Ismail. A logo on a basketball court may be O.K., but a soft drink ad at a playground might not.

Other parts of the plan are less controversial.

An "official bank of the city" might get exclusive rights to put automated teller machines on city property, plus some ads on the digital signs, in return for regular payments. It could offer a "City of Champions" credit card, with a fraction of each purchase going to the city, raising $150,000 to $450,000 a year, according to the plan.

An official telecommunications provider might get all of the city's contracts in that area, including the job of running an online map with links to businesses that would pay to be included.

The city could give a beverage maker and a food company exclusive rights to sell their products in government offices, recreation centers, fire houses and other facilities. The city's cut of vending machine revenue alone could be $150,000 to $350,000 a year, according to the plan.

"There's going to be some paradigm shifts," said Ms. Ismail. The city now spreads its banking, telecommunications and vending machine business around, with each department cutting deals. Some things -- like the recent appearance of an ATM at the Schenley Park Ice Rink -- happen with no apparent process. That would have to change.

Will corporations pay to attach their names to a storm-tossed government just years from near-bankruptcy? Those are "untested waters," said Bill Kolano, head of Kolano Design and a member of the panel studying the plan. But certain city-owned properties and city-run events have definite marketing cache, he said. A new Troy Hill splash park, for instance, might attract a naming rights deal.

Other cities have sports commissions charged with raising money to lure big events and funding youth athletic leagues, and Pittsburgh could create one, too, according to the plan.

Mr. Peduto wants a final plan before council next month, and he wants revenue from the effort included in the 2009 budget.

Mr. Sentz said the city is working to extend The Active Network's contract. The new pact would give the firm a cut of whatever deals it can seal with private firms.

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
First published on September 29, 2008 at 12:00 am