LTC 285-2019 Update Regarding Alternative Revenue Items MIAMI BEACH
OFFICE OF THE CITY MANAGER
NO. 285-2019 LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members the City ommission
FROM: Jimmy L. Morales, City Manager
DATE: May 13, 2019 l/
SUBJECT: Update Regarding Alternative Re enue Items
The purpose of this Letter to Commission is to update you on progress made on the alternative revenue items that were
brought to you for consideration. During the budget planning for this current fiscal year, multiple options were
presented as alternative ways to provide revenue to the City at the Finance and Citywide Projects ("FCWP") committee
budget briefing meetings. The options included advertising on the exterior of trolleys; large-scale sponsorships
throughout the City, such as park naming rights and naming rights to the Miami Beach Convention Center(MBCC); and
advertising on the rear side of the Fleet Management building.
Since the July 13, 2018 FCWP Committee budget briefing,the Administration has been able to move forward with a
couple of these options. The City utilized the remainder of the term of the City of Miami contract with Outfront Media
to begin implementing advertising on the exterior of the City's trolleys, adding a budgeted amount of$500,000 in
advertising revenue to the general fund.
Additionally, an RFQ was issued for a vendor to begin researching and selling large-scale sponsorships for the City,
including possible naming rights to the MBCC. As previously presented to the Mayor and Commission, many large parks
and convention centers throughout the country utilize naming rights revenue to provide alternative revenue for their
venues. The following chart shows some arenas and convention centers that have previously garnered naming rights
revenue for their facilities. The newly renovated Convention Center would be a candidate for such option:
TERMS OF NAMING RIGHTS DEALS FOR COMPARISON AND RE SEARC H
Location Venue Type Annual Terms Total revenue
Centurytink Center- Omaha Nebraska Convention Ctr $933,333.33 15 $14,000,000.00
Huntington Bank Convention Center of Cleveland Convention Ctr $500,000.00 20 $10,000,000.00
Carnival Center Cultural Ms $10,000,000.00 1 year $10,000,000.00
Adrienne Arsht Cultural Arts $30,000,000.00 In perpetuity
Lobby of Carnival Studio Theater Cultural Ms $250,000.00 In perpetuity
Ziff Ballet Opera House Stage Cultural Ms $1,000,000.00 In perpetuity
Willis Tower- Formerly Sears Tower (Chicago) Multi-Functional $1,000,000.00 Since 2009 Unknown
Toyota Center- Houston Texas Sports Arena $5,000,000.00 20 $100,000,000.00
American Airlines Center-Dallas Mavericks Sports Arena $6,500,000.00 15, $97,500,000.00
Lincoln Financial Field, Philadelphia, Pennsylvania Sports Arena $6,647,619.05 21 $139,600,000.00
Bank of America Stadium, Charlotte, North Carolina Sports Arena $7,000,000.00 20 $140,000,000.00
Hard Rock Stadium - Miami, Florida Sports Arena $13,888,888.89 18 $250,000,000.00
American Airlines Arena- Heat Sports/Music $2,100,000.00 Unitl 2019 $31,500,000.00
During the discussion, it was mentioned that, pursuant to the City Code, the naming of the MBCC may require a
referendum. City Commission approval would be required for any sponsorships, prior to finalizing any contract. In
addition to the MBCC naming rights, a vendor may pitch and present possible large-scale sponsorships for parks,
projects and events, subject to Commission approval.
The procurement process is almost complete with the above RFQ with multiple agencies interested in the opportunity.
The Administration hopes to have a final recommendation to present at the June 5, 2019 City Commission meeting.
On September 14, 2018, staff also presented the possibility of advertising on the back of the Fleet building to the FCWP
Committee. The Committee recommended that the City's Marketing and Communications Department explore this
proposal, and Commission accepted this recommendation. The FCWP Committee identified the City of Miami Beach
Fleet Management building as a potential location for placement of exterior signage, as it would only be seen by cruise
ship passengers as well as boaters in the area that enter and exit the Port of Miami. The Port of Miami has
approximately 5.3 million passengers each year. Murals of this size have potential to sell for more than $20,000 per
month or$240,000 per year.
On October 26, 2018 staff presented the final revenue option of advertising on the exterior of parking garages to the
FCWP. After discussion, it was recommended that staff bring a recommended pilot program to the Mayor and
Commission for approval. Since this recommendation, staff has been researching and discussing internally the best way
to move forward with these last two recommendations. Exterior advertising in the City of Miami Beach is regulated by
the City Code, County Code and relevant FDOT regulations. Most importantly, City Code Section 138-5 uniformly
prohibits all general advertising in the City.
After much discussion, both the Planning Department and Legal Department have determined the following:
A 'pilot' program for exterior garage advertising would be treated the same as a regular application for general
advertising.The City Code does not provide for'pilot' programs for exterior signage. In order to allow for exterior
advertising on the outside of parking garages(both public and private), an amendment to Chapter 138 of the Land
Development Regulations (LDRs) of the City Code, entitled "Signs," would be required to permit'general advertising,'
under certain specified circumstances. Such an amendment would require a City Commission sponsor and referral,
review by the Land Use and Development Committee and Planning Board, as well as two readings and a public hearing
by the City Commission. A 5/7th vote of the City Commission is required to approve and adopt any amendment to the
LDRs.
If the exterior ads were proposed for public buildings or garages in Government Use ("GU") Districts (e.g.,Terminal
Island),the City Commission could, potentially,grant a waiver of Development Regulations and allow general advertising
signs in these districts. However, Design Review Board or Historic Preservation Board review of the aesthetics would still
be required.Additionally, Planning Board review of each waiver would be required.
However,from a legal standpoint, if the City were to attempt to only permit advertising on public buildings, it is very
likely that such a maneuver would be met with a legal challenge. It is unlikely that the City would prevail. Even if the
advertising were limited to Industrial Districts,there are a number of private garages and buildings on both Terminal
Island and the Sunset Harbor area that could take advantage of potential advertising opportunities.
The following is a summary of Legal, Planning and Urban Design issues as it pertains to Parking Garage and Fleet
Management Advertisements.
1. Collectively, both Planning and Legal are concerned that allowing general advertising on the exterior of City
garages will result in a court challenge that could force the City to allow these ads on private buildings. Under our LDRs,
General Advertising is prohibited City Wide.The more we chip away at the foundation of this prohibition, the more likely
that it could crumble. Additionally, we have been very successful at preventing advertising barges in our territorial
waters. Allowing large ads on the backside of the Fleet Management could jeopardize that as well.Additionally, if these
types of ads were allowed on private buildings, we would have no way of controlling the content.
2. Architecture of Individual Garage Structures:Virtually all of our parking structures in the City(both public and
private) each have a unique and distinct architectural identity. NONE were designed in a manner that could
accommodate large advertising banners. The introduction of these large advertisements would significantly impair the
architectural integrity of the garages. In furtherance of this, we previously attached a short piece, published in 2011,
entitled "BEEN THERE HAVEN'T DONE THAT Miami's Beached Cars". It nicely and succinctly summarizes the architectural
value of the City's parking structures.
3. Visual Blight and Urban Design Standards: Citywide, Miami Beach is a very unique concentration of well-planned
and cohesive architectural forms. We have architectural representation from numerous eras both inside and outside of
our historic districts.The introduction of large ads on parking structures will significantly compromise this carefully
balanced urban form.
4. Miami Beach Brand: Long Term, the proliferation of outdoor advertising has the potential to seriously compromise
our brand, which has been the foundation of our tourism and overall revival since the mid-1980's.There is a reason
outdoor advertisers want to put up large ads in the City. Allowing it would run counter, over the long term.
As I have indicated previously, we recognize that this is a multi-faceted issue, and that the amount of potential revenue
that can be generated is not insignificant. Nevertheless, in order to reach the most informed decision possible, I believe
that our policy makers should be privy to all facets of the proposal (both positive and negative).
In light of the details above, I am recommending that we do not move forward with the exterior garage advertising or
the advertising on the back of the Fleet building as was recommended by Commission.
Should you have any questions, or need additional information, please contact Tonya Daniels in Marketing and
Communications.
JLM/MM/TD