REPORT TO THE CITY COUNCIL
April 28, 2016
FROM: BRUCE RUDD, City Manager
SUBJECT
Title
Discuss conceptual terms of a master lease with Outfront Media, and provide direction to return to Council in sixty days with completed contract
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Body
RECOMMENDATION
Council authorizing the City Manager to initiate the steps necessary to finalize a twenty (20) year revenue sharing agreement and subsequent leases with Outfront Media and return to the Council within the next 60 days for approval.
EXECUTIVE SUMMARY
In an effort to generate additional General Fund revenue and consolidate billboards along freeways, the City Manager's Office issued a Request for Proposals (RFP) on October 21, 2015, in which the City would authorize the construction of digital billboards on property owned by the City of Fresno. All of the proposed locations contained in the RFP are adjacent to local freeways as these sites would generate the highest visibility/value for potential advertisers. The RFP required a minimum annual payment or a percentage of the gross sales; whichever was greater, along with a onetime signing bonus. In addition, potential bidders were asked to include the removal of existing static billboards as part of their proposals.
The City received two proposals to the RFP. Based on a review of the proposals, it is recommended that Council authorize the City Manager to finalize a twenty (20) year revenue sharing and subsequent leases agreement with Outfront Media. It is anticipated that the final agreement will be presented to Council for approval within the next 60 days. If approved, this agreement would provide a onetime signing bonus of $325,000, and a minimum annual of payment of $378,000 or $3.78 million over the next ten years. While it is anticipated that the annual payment based on a percentage of gross sales will exceed the minimum annual payment of $378,000, staff believes that using the minimum payment for estimation purposes is appropriate. In additio...
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