City Council Meeting: December 13, 2022 Santa Monica, California ORDINANCE NUMBER _________ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AUTHORIZING THE GRANT OF AN EXCLUSIVE FRANCHISE TO BIG OUTDOOR INVESTMENTS, LLC., TO INSTALL AND OPERATE OUT-OF-HOME KIOSKS IN THE CITY’S RIGHT-OF-WAY FOR 20 YEARS
WHEREAS, in accordance with Article XVI of the Santa Monica City Charter, the City Council is empowered to grant by ordinance a franchise to any person, firm or corporation, whether operating under an existing franchise or not, to furnish the City and its inhabitants with transportation, communication, terminal facilities, water, light, heat, power, refrigeration, storage or any other public utility or service, and to use the public streets, ways, alleys and places, as the same now or may hereafter exist, for the construction and operation of plants, works, or equipment, necessary or convenient for the furnishing thereof, or necessary or convenient for traversing any portion of the City for the transmitting or conveying of any service elsewhere; and WHEREAS, the City Council may prescribe the terms and conditions of any such franchise grant; and
WHEREAS, before granting any franchise, the City Council shall pass a resolution declaring its intention to grant the same, 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. Such resolution shall fix and set forth the day, hour and place when and where any persons having any interest therein or any objection to the granting thereof may appear before the City Council and be heard thereon; and WHEREAS, the resolution of intention shall 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; and WHEREAS, after the public hearing, the City Council may grant, or deny, the franchise, subject to the right of referendum of the people; and WHEREAS, on or about January 25, 2021, the City of Santa Monica issued a Request for Proposals (RFP) to solicit proposals to install out-of-home advertising kiosks (the “Kiosks”) in the City’s right-of-way to enhance the City’s pedestrian experience on the City’s public sidewalks; and
WHEREAS, the Kiosks will provide various public benefits, including real-time transportation information, promotion of local retail, shelter and service information for homeless individuals, and public health and safety information and notifications; and WHEREAS, the Kiosks rely on sponsorship and advertising revenue, a portion of which will be shared with City; and
WHEREAS, the franchise will authorize the installation of up to fifty (50) Kiosks throughout the City; and
WHEREAS, the City Council has determined that Big Outdoor Investments, LLC., (“BIG Outdoor”) is the best qualified firm to receive the exclusive franchise (the “Franchise”) to install the Kiosks, based upon BIG Outdoor’s proposal (the “Proposal”); and
WHEREAS, the Proposal includes the following benefits to the City:
• Projected Revenues - BIG Outdoor offered the City a 50% share of adjusted gross revenues, which it estimates would be an approximate average of more than $14 million annually over the franchise term, assuming a total of 50 kiosks are installed. • Minimum Annual Guarantee
BIG Outdoor offered a minimum annual guarantee of $5 million commencing upon full deployment and completion of Phase 1, with 3% escalation every three years for the duration of the franchise term. Effectively, the City would receive either 50% of adjusted gross revenues or $5 million per year, whichever is higher. • Signing Bonus
In addition to the 50% revenue share and minimum annual guarantee offers, BIG Outdoor also committed to paying the City a $4 million signing bonus prior to the effective date of the franchise agreement.
• Additional Community Benefits
BIG Outdoor committed to contribute 2% of its net media revenues from the Santa Monica kiosk network towards community programs and services at the City’s discretion.
• Community Ambassador
BIG Outdoor has also committed to hiring a full-time community ambassador to interface directly with the City and community for all communications; and WHEREAS, on November 15, 2022, the City Council unanimously adopted Resolution No. 11483 (CCS) (the “ROI”), stating its intent to award by ordinance the Franchise to BIG Outdoor, the terms and conditions upon which it is proposed to be granted, and setting the public hearing for December 13, 2022 to hear all protests, if any; and
WHEREAS, the City Clerk published the ROI on November 23, 2022, in the Santa Monica Daily Press; and
WHEREAS, after conducting a duly noticed public hearing on December 13, 2022, and considering all oral and written protests submitted prior to and during the hearing, the City Council made its determination to grant the Franchise to BIG Outdoor in accordance with the ROI.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The above referenced recitals are incorporated into this Ordinance as true and correct.
SECTION 2. The Franchise is hereby granted to BIG Outdoor, in accordance with the terms and conditions of the ROI.
SECTION 3. The City Manager or his designee is authorized to negotiate and execute a franchise agreement consistent with this ordinance and take all actions necessary to implement the franchise agreement.
SECTION 4. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 6. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption.
APPROVED AS TO FORM:
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DOUGLAS SLOAN
City Attorney