City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00533 3/18/2025 Consent Item 14.
Lease Agreement with Lamar Advertising of Northern California for Three Static Billboards at Sutter's Landing
File ID: 2025-00533
Location: District 4
Recommendation: Adopt a Resolution: 1) finding it is in the best interest of the City to award this lease based on a Request for Proposal process; 2) approving a lease agreement with Lamar Advertising of Northern California for three static Billboards at Sutter’s Landing for a 5-year term, with one five-year renewal option; 3) authorizing the Interim City Manager, or designee, to execute the lease agreement; and 4) authorizing the Interim City Manager or designee, to adjust the revenue budget for YPCE (Dept ID 19001121) and recognize and appropriate the lease revenue to Sutter’s Landing Regional Park Project (L19167000).
Contact: Barbara Smith, Administrative Officer, (916) 808-5762, [email protected]; Shannon Brown, Assistant Director, (916) 808-6076, [email protected]; Department of Youth, Parks, and Community Enrichment
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution for I-80 Billboards
3-Agreement: Lease for Maintenance and Operation of Three Static Billboards at Sutter's Landing Description/Analysis
Issue Detail: The Department of Youth, Parks & Community Enrichment (YPCE) is seeking approval to award a lease to Lamar Advertising of Northern California (Lamar) for the operation and maintenance of three, two-sided, static billboards approximately 14 ’x 48’ each, located at Sutter's Landing Regional Park along the Business 80 Freeway. The existing lease for the Static Billboards expired on December 31, 2024.
On September 25, 2024, the City issued a formal Request for Proposals for Management and Operation of Three Static Billboards Along Business 80 Freeway at Sutter’s Landing Regional Park (RFP). Staff recommends that the Council finds it to be in the best interest of the City to select the
File ID: 2025-00533 3/18/2025 Consent Item 14.
billboard operator on the basis of best value, rather than awarding to the “highest responsible bidder.” Because the lessor will pay the City a percentage of gross receipts or minimum rent, whichever is higher annually, selecting a lessor that will provide the most consistent and successful operation of the billboard will allow the City to maximize the revenue the City receives over the term of the lease.
Utilizing an RFP process allows the City to evaluate the lessor’s experience and demonstrated ability, unlike an invitation for the “highest bidder.” A bidder may promise the City a higher percentage of gross receipts, but if the bidder does not have the requisite experience and ability to successfully market the space, the actual amount of its gross receipts (and therefore the percentage rent payable to the City) would be lower than an experienced operator.
The City received four proposals in response to the RFP, from Lamar, Outfront Media, Capital Outdoor, and Clear Channel Communications. The proposal evaluation criteria included the qualifications and experience of the proposed operator, as well as the proposed financial return to the City. Based on these criteria, Lamar’s was the top-ranking proposal. Lamar has previously operated these billboards and has a proven track record of success, both in exceeding revenue expectations and in independently partnering with Caltrans to control vegetation adjacent to the billboards.
Policy Considerations: Section 3.68.020 of the Sacramento City Code requires that leases authorizing occupancy of City property for a period of more than six months shall be awarded to the highest responsible bidder, unless otherwise exempt from the bidding process, as set forth in Section
3.68.110.
Economic Impacts: Not applicable.
Environmental Considerations: California Environmental Quality Act (CEQA): The management and operation of these assets is exempt from CEQA pursuant to section 15301 of the CEQA Guidelines (14 C.C.R., § 15000, et seq.), which exempts the leasing, operation, and maintenance of existing public structures and facilities involving negligible or no expansion of existing or former use.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: A formal RFP seeking a manager and operator for the three static billboards at Sutter’s Landing Regional Park was published on September 25, 2024. Lamar submitted the top scoring proposal, based on the evaluation criteria included in the RFP. Lamar has a proven track record of success, both in exceeding revenue expectations for the Static Billboards and in independently partnering with Caltrans to control vegetation adjacent to the billboards at their own expense of over $30,000.
File ID: 2025-00533 3/18/2025 Consent Item 14.
Financial Considerations: The minimum revenue to the City, per the terms of the proposed lease, is $240,000 per year. In addition, Lamar has also pledged a one-time, $50,000 signing bonus. The City has historically pledged the billboard lease revenues to fund improvements to Sutter's Landing Regional Park. YPCE’s revenue budget will be adjusted (Dept ID 19001121) to reflect the lease revenue, and the expense budget will be reflected in an adjustment to the budget for CIP L19167000.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2025-
APPROVING A LEASE AGREEMENT WITH LAMAR ADVERTISING OF
NORTHERN CALIFORNIA FOR THREE CITY-OWNED BILLBOARD
STRUCTURES ADJACENT TO BUSINESS 80 AND ALLOCATING THE
LEASE REVENUES FOR SUTTER’S LANDING REGIONAL PARK
BACKGROUND
A. The City issued an Invitation for Bid for lease of the three City billboards located at Sutter’s Land Regional Park along the Business 80 freeway. Four bids were received and Lamar’s was the top-ranking proposal.
B. Lamar will make rental payments of $20,000 monthly or 60% of the gross advertising revenues, whichever is greater. The minimum annual lease payment of $240,000 for the lease period from January 1, 2025, through December 31, 2029, is general fund revenue.
C. Historically, lease revenue from these billboards has been appropriated for improvements to Sutter’s Landing Regional Park
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. Pursuant to section 3.68.110, subsection F., the Council finds and determines that it is in the City's best interest to utilize an RFP process as the experience and ability of the lessee will directly affect the lessee's gross receipts.
Section 2. The City Manager or the City Manager’s designee is authorized to execute a Lease Agreement with Lamar Advertising of Northern California, in substantially the same form as attached in Exhibit A, for the lease of the three City-owned billboard structures in the amount of $20,000 per month or 60% of the gross advertising revenues, whichever amount is greater.
Section 3. The City Manager or the City Manager’s designee is authorized to adjust the revenue budget for YPCE (Dept ID 19001121) and to recognize and appropriate the lease revenue to Sutter's Landing Regional Park Project (L19167000).
Table of Contents
Exhibit A – Lease Agreement Three Billboards Along Business 80 Freeway At Sutter’s Landing Regional Park