City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01758 10/22/2024 Consent Item 6.
Eighth Amendment to Digital Billboard Lease Agreements with Clear Channel Outdoor, LLC File ID: 2024-01758
Location: Citywide
Recommendation: Pass a Motion authorizing the City Manager or the City Manager's designee to execute an Eighth Amendment to four Digital Billboard Leases (City Agreements 2010-0525, 2010- 0526, 2010-0527, and 2010-0528) with Clear Channel Outdoor, LLC (CCO) to update advertising rights to include advertisement of alcohol and alcohol products, and provide clarity around and quarterly reporting for opportunities for City utilization of advertising slots on the billboards to maximize City usage.
Contact: Marco Gonzalez, Senior Development Project Manager, ( 916) 808-5757,
[email protected]; Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, [email protected]; Office of Innovation and Economic Development Presenter: None
Attachments:
1-Description/Analysis
2-Billboard Lease (2010-0525) (Amendment 8)
3-Billboard Lease (2010-0526) (Amendment 8)
4-Billboard Lease (2010-0527) (Amendment 8)
5-Billboard Lease (2010-0528) (Amendment 8)
Description/Analysis
Issue Detail: On May 11, 2010, City Council approved four Digital Billboard Leases (City Agreements 2010-0525, 2010-0526, 2010-0527, and 2010-0528) with CCO. The four digital billboards operate on city-owned sites located at the north side of Interstate 80 east of Northgate Boulevard (APN: 237- 0031-36), Business 80 and Fulton Avenue (3630 Fulton Avenue, APN: 254-0310-002), west side of Highway 99, south of Mack Road (APN: 117-0170-067), and west side of Interstate 5 south of Richards Boulevard (240 Jibboom Street, APN: 001-0190-015). Each lease term is for 25 years, with an option to extend for five years for 30 years total. The effective date of the leases, and the beginning of the first lease year, was July 2, 2010. However, CCO was not required to begin monthly rent payments until the digital billboard signs were installed and operational, which was November
File ID: 2024-01758 10/22/2024 Consent Item 6.
10, 2010. Since 2010, there have been seven lease amendments, with the most recent in 2023.
The Eighth Amendment to Digital Leases (“Amendment”) includes an update to the Advertising Rights section that reflects what Clear Channel is legally allowed to advertise. The Amendment allows Clear Channel to run advertisements for alcohol and alcohol products. It also provides clarity around opportunities for City utilization of advertising slots on the billboards and includes a process for quarterly reporting of City usage and recommendations to maximize City usage. The attached Eighth Amendments reflect those changes for each of the four billboard leases.
Policy Considerations: The recommendations in this report are consistent with the City’s goals to increase and diversify revenue sources. They are also consistent with section 3.68.120 of the City Code regarding amendment of existing leases.
Economic Impacts: None.
Environmental Considerations: The recommendations are administrative, organizational, and fiscal activities that are not reasonably foreseeable to cause significant effects on the environment and are, thereby, not a “project” under the California Environmental Quality Act (CEQA) Guidelines section 21065.
Sustainability: None.
Commission/Committee Action: None.
Rationale for Recommendation: The Amendment will modify Clear Channel’s Advertising Rights by allowing advertising of alcohol and alcohol products making it consistent with other City billboard leases. Additionally, the Amendment outlines a process to enhance the City’s utilization of unused advertising slots by clarifying the steps and requiring Clear Channel to provide quarterly reporting of City usage with recommendations to maximize that usage.
Financial Considerations: Revenue from the four digital billboards described in this report is deposited into the General Fund. The current annual rent for the four billboards is $1,129,897. It is anticipated that including alcohol as an eligible product for advertising on the billboards may increase revenue for the City.
Local Business Enterprise (LBE): None.