City Council Meeting 11-15-2022 Santa Monica, California RESOLUTION NUMBER ____ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
DECLARING ITS INTENT TO AWARD A DIGITAL WAYFINDING AND OUT-OF-HOME
ADVERTISING KIOSK FRANCHISE TO
BIG OUTDOOR.
WHEREAS, on January 26, 2021, the City Council directed City of Santa Monica staff to issue a Request for Proposals to identify a franchise partner to implement a digital wayfinding and out-of-home advertising program to provide interactive information to community members and visitors, enhance public safety with emergency capabilities, deliver community messaging, and generate new revenues through advertising sales; and
WHEREAS, the City of Santa Monica issued Request for Proposals #300 on December 1, 2021 for a franchise partner that has successfully deployed, operated, and maintained kiosk programs in a minimum of three other similar markets, has a demonstrated history of producing strong advertising revenues, and is committed to actively managing the program to meet the needs of the City of Santa Monica and the community; and
WHEREAS, City Charter Section 1601 requires that the City Council City pass a resolution declaring its intention to grant the franchises, stating the name of the proposed grantee, the character of the franchise and the terms and conditions upon which it is proposed to be granted; and
WHEREAS, such resolution must fix and set forth the day, hour and place when and where any persons having any interest in the franchises or any objection to the granting thereof may appear before the City Council and be heard thereon; and WHEREAS, the resolution must direct the City Clerk to publish said resolution at least once within fifteen (15) days of the passage thereof, in the official newspaper; and WHEREAS, the time fixed for such hearing shall not be less than twenty (20) nor more than sixty (60) days after the passage of said resolution; and WHEREAS, at the time set for the hearing, the City Council shall proceed to hear and pass upon all protests and its decision thereon shall be final and conclusive.
Thereafter it may grant, or deny, the franchise, subject to the right of referendum of the people; and
WHEREAS, the City initiated the Digital Wayfinding and Out-of-Home Advertising Kiosk Program to provide interactive information to residents and visitors, enhance public safety via emergency capabilities, deliver community messaging, and generate revenues through advertising sales; and
WHEREAS, deployment of the kiosk network would be structured as a franchise agreement with an exclusive vendor that would require no direct costs incurred or investment made by the City, with the franchisee required to install, operate, and maintain the kiosks; and
WHEREAS, compensation for the City and the franchisee would be realized through profit-share of advertising revenues; and
WHEREAS, after an extensive evaluation process, finalist interviews, and reference checks, an internal evaluation team selected BIG Outdoor as the best bidder, based upon several factors, including a financial package that was significantly higher than all other bidders ($4 million signing bonus and a 50% revenue share offer to the City with a $5 million minimum annual guarantee), significant community benefits, and kiosk technology and design most appropriate for the culture and aesthetic of Santa Monica; and
WHEREAS, BIG Outdoor has agreed that the terms and conditions upon which the digital wayfinding and out-of-home advertising kiosk franchise will be granted are as follows: the franchise term will be twenty (20) years; installation of up to fifty (50) digital kiosks; the City will receive a fifty-percent (50%) share of adjusted gross revenues or a minimum annual guarantee of five-million dollars ($5,000,000) per year with a threepercent (3%) escalation every three years, whichever is higher; the franchise grantee will contribute two-percent (2%) of franchisee’s annual net media revenues to community programs and services at the City’s discretion; and a one-time signing bonus in the amount of four-million dollars ($4,000,000) that will be paid to the City prior to the effectiveness of the franchise agreement.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. The above referenced recitals are incorporated by reference as true and correct.
SECTION 2. Council hereby declares its intent to grant a digital wayfinding and out-of-home advertising kiosk franchise to BIG Outdoor.
SECTION 3. The terms and conditions upon which the digital wayfinding and out-of-home advertising kiosk franchise will be granted are as follows: the franchise term will be twenty (20) years; installation of up to fifty (50) digital kiosks; the City will receive a fifty-percent (50%) share of adjusted gross revenues or a minimum annual guarantee of five-million dollars ($5,000,000) per year with a three-percent (3%) escalation every three years, whichever is higher; the franchise grantee will contribute two-percent (2%) of its annual net media revenues to community programs and services at the City’s discretion; and a one-time signing bonus in the amount of four-million dollars ($4,000,000) that will be paid to the City prior to the effectiveness of the franchise agreement.
SECTION 4. The public hearing at which Council shall hear and pass upon all protests with respect to the proposed digital wayfinding and out-of-home advertising kiosk franchise grantee set forth in Section 2 will take place on December 13, 2022, at 5:30 p.m., at 1685 Main Street, Santa Monica, California 90401.
SECTION 5. The City Clerk shall certify to the adoption of this Resolution, and thenceforth the same shall be in full force and effect. The City Clerk shall cause this Resolution to be published once in the official newspaper within 15 days after its adoption.
APPROVED AS TO FORM:
_________________________
DOUGLAS SLOAN
City Attorney