Why Dallas Area Rapid Transit Can't Sell the Naming Rights to Its Stations After All

First, the city of Dallas said it would begin exploring the possibility of selling naming rights to ... well, you name it, from city-owned facilities to its vehicles; first on the to-sell list, the Elm Fork Athletic Complex off Walnut Hill. A few weeks later, Dallas Independent School District trustee Mike Morath suggested that the district, budget-gutted by the state Legislature, also consider selling the naming rights to its athletic facilities, at the very least. Then, a couple of weeks after that, Dallas Area Rapid Transit's board began exploring the possibility of selling the naming rights to its stations.

Not so fast: Minutes from that meeting are now posted, in advance of today's board get-together, and in there you'll note that DART General Counsel Hyattye O. Simmons tells the board that, sorry, that won't work per the transit agency's renaming policy, which, said Simmons, "excludes the use of business names, product names, and personal names unless the name is also a street name or a well-known destination."

In other words: Unless Pearl Brewing Company wants to pay for the Pearl Station, then DART's SOL. Because "renaming considerations must have a compelling reason to rename a station, and should benefit existing and prospective transit users." That bummed out the board, which is hoping to make $1 to $2 mil a year per station by selling exclusive advertising rights. And it also kicked off an interesting discussion about wrapping stations in ads, selling concessions at stations, turning over Mockingbird Station to a single advertiser and partnering with downtown Dallas restaurants. It follows.

*Station Naming Rights and Concessions

Ms. Janie Pena, Assistant Vice President External Affairs, briefed the Committee (slides on file with the Office of Board Support) as follows:

• Naming Rights Overview
• Naming Rights Transit
• Naming Rights and Transit - Benefits
• Transit Agencies with Naming Rights
• Other Points to Consider
• DART Naming Policy
• Next Steps

Mr. Simmons, DART General Counsel, informed the Committee that the one caveat is laid out in the DART Renaming Policy; it excludes the use of business names, product names, and personal names unless the name is also a street name or a well-known destination.

Ms. Pena stated that a name and identification of a station should clearly communicate a location to the customer. Renaming considerations must have a compelling reason to rename a station, and should benefit existing and prospective transit users. Further, the policy reads that all name changes must be approved by a vote of two-thirds of the appointed and qualified members of the Board.

Chair Danish said there could be revenue earned as much as $1 M to $2M per year on a five (5) year contract, if a business is awarded exclusive advertising at a location. He continued that he would like to focus on the last sentence in the policy regarding a two thirds vote of the appointed and qualified members of the Board. Mr. Danish stated that because of Mr. Noah's experience and longevity serving on the Board, he would like to hear his opinion. Mr. Noah responded that restrictions in the policy would need to be removed in order to enter into that type of business arrangement. Further, Mr. Noah said he feels that staff has always been consistent with policy, and will continue to do so; and that the Board members have not been involved with naming any of the stations.

Mr. Chrisman asked if there is a minimum threshold in mind for naming rights, along with the policy change; and if there is not, it is feasible it could actually cost DART more to change the name and advertise the name change.

Ms. Pena said her briefing has been a broad overview of the possibilities, as well as what is happening with transit in general. She continued that before an RFP is issued for assessment, staff will come back to the Committee with more specifics and results. With the Board's recommendations, staff will again return to brief the Board on the final results in the spring of 20 12.

Mr. Tsao stated that when the stations were designed, DART spent a significant amount of money working with an architect. He said we should be careful not to waste what has already been spent if we sell station wrapping that might alter designs. He continued that with the many buses in and out of DART's major transit centers, potential naming right opportunities are at those stations as well. Ms. Pena agreed it is very important that consideration of the historic character, specialties, and extensive community involvement that took place to design each of the stations be kept in mind, and be a part of any decisions made.

Mr. Strauss joined the meeting at 2:41 p.m.

Ms. Pena then turned the discussion over to Mr. Jack Wierzenski, Director of Economic Development, to brief the Committee on Concessions as follows (slides on file in the Office of Board Support):

• Working with the City of Dallas (DDA).
• Staff coordinating with the Department of Code Compliance and DDA.
• City has asked to defer moving forward with the code amendments until October.

Ms. Wilkins joined the meeting at 2:47 p.m.
Chair Danish said that rather than wait for the City of Dallas to make their decision, DART might be better served to explore opportunities with all of the member cities at the same time. Mr. Chrisman said he also agrees with the multi-city approach.

Mr. Wierzenski said that over the years, both Plano and Carrollton have discussed with staff the potential for concessions at DART stations, but no decisions were made. However, still to be considered is maintenance issues, and if it would be problematic. Chair Danish asked that Mr. Wierzenski consider pilot programs, such as the wraps advertising. He continued that Fort Worth has a pilot policy in concessions. Chair Danish offered that a pilot program could take place at the South Irving Transit Center, in the center of the TRE, and asked it be considered as another venue. Further, Mr. Danish said staff could begin to explore the viability of this concept without having to wait year after year.

*Exclusive Use of all Advertising Space at Mockingbird Rail Station

Ms. Pena briefed the Committee (slides on file with the Office of Board Support) as follows:

• Station Domination.
• Revenue Opportunities.
• Mockingbird Station Domination.

Ms. Pena introduced Mr. John Selig, DART's Manager of Advertising, and Mr. Mike Collins, Vice President/General Manager of Titan, to the Committee.

Chair Danish wanted to return to the bus shelter slide (on file in the Office of Board Support) and asked what a client might pay for a unit per shelter. Mr. Collins responded that he sold the same type of programs for twelve (12) years in San Francisco, and the shelters there sold from $500-$1,000 per a four (4) week period. He said that for Dallas, contingent on economic conditions, as well as the competitive media in the market, an estimate could be $300-$500, per a four (4) week period.

Ms. Wilkins asked if the 15% DART would receive is the gross amount of the net amount? Mr. Selig responded that DART receives 100% of the amount until it reaches the base amount; thereafter and in addition, DART will receive 15% of any additional gross revenue.

Ms. Pena ended the discussion stating that although the Board and staff would like to work and get involved with this idea, it must also be kept in mind that this is a market driven concept; the economy and people's desire to actually advertise will be the key role. Also, there will be stations where people will want to do this, and perhaps stations where it will not be accepted at all.

Chair Danish thanked Ms. Pena for a great presentation and said this is an exciting threshold, and hopes that we can continue to move forward to make progress on these fronts, and be ready for any action item that staff might need the Committee to send on to the Board.

4. Identification of Future Agenda Items

Mr. Williams said the Dallas Morning News recently had an interesting article regarding the development of restaurants for downtown, but their concern is about traffic and getting patrons from the surrounding areas to these new restaurants. Mr. Williams offered that possibly in conjunction with the restaurants being established, there might also be a joint venture opportunity available. Ms. Pena responded that DART has done destination marketing in the past, and she will again research and look at the possibilities.

Chair Danish asked that Ms. Pena present a preliminary analysis at the next Committee meeting on Mr. Williams' suggestion for the opportunity for DART to work in conjunction with local restaurants.