City for sale 

The city has put a price tag on everything from parking meters to CTA stops, billboards to city departments. But what's the real cost of plastering our public space with ads?

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click to enlarge PAUL JOHN HIGGINS

In some parts of the country, officials have set up a clear, open process to make sure that their taxpayers aren't getting hosed in privatization deals—and that the politicians won't be blamed in any event.

The state of Virginia, for instance, is establishing a system to sell sponsorships for roads and bridges. The initial step is soliciting competitive bids to find a firm to oversee the effort.

"We first need to figure out how we do it," says Tamara Rollison, a spokeswoman for the Virginia Department of Transportation. "We'll need to set up guidelines because we don't have the expertise."

In Chicago, though, officials have continued the approach they took with the Skyway, parking garages, and meter system: making closed-door deals with the first people who pitch them.

In June 2010, Daley asked the City Council to sign off on a no-bid contract with a suburban marketing firm to solicit advertising for the city's iconic downtown bridges. There was no mystery about where the idea had come from—it was spelled out in the ordinance governing the contract: "Whereas Fresh Picked Media has approached the city of Chicago with a proposal to utilize certain Chicago River Bridge Houses . . ."

The deal entitled the city to 75 percent of the money from bridge ads. The president of Fresh Picked Media predicted it could bring the city $10.5 million a year, and the City Council approved it within a month.

Meanwhile, the CTA was creating its own aggressive plan to turn over public space to sponsors. The transit system has reaped money from ads on buses and trains for years, but it entered new terrain in 2009, when Apple approached with an offer: the company would pay to spruce up the North/Clybourn stop on the Red Line, steps away from its new store. In return, the CTA would let Apple lease the plaza outside the stop at no charge for the next decade. The company would also get first dibs on advertising space inside the station as well as the opportunity to purchase naming rights—raising the distinct possibility that riders would someday pull into the Apple North/Clybourn station.

The CTA, perennially facing the specter of service cuts, jumped at the opportunity. No other companies were asked to make better offers. And no one seemed to question whether the arrangement had implications for fairness and equity in service across the city. Will stations in areas that lack corporate outlets get the same level of investment?

The Apple deal was just a preliminary step to a bigger marketing plan. In late 2010 the CTA announced that it would hire a firm to help it auction off naming rights to train stations. This time the authority put the job up for bid, and in August 2011 it hired IMG, a New York-based branding consultant.

In May of this year IMG invited companies to bid on the CTA's "corporate partnership program" for the Red and Brown lines. Benefits include "Designation of the sponsored station as '[Company's Name]—[Station Name],'" according to the bidding documents. Sponsoring companies would also get the right to use the station for marketing events.

Under the terms of its contract, IMG will get a commission based on what's paid for station naming rights.

By mid-November 2011, something about the Wabash Avenue bridge looked different—something like the cheap vinyl Bank of America ads affixed to the bridge houses.

"As the first products of Mayor Rahm Emanuel's short-sighted plan to raise $25 million by selling ads on all types of city property, they offer a nightmarish hint of what the plan might deliver: the uglification of the City Beautiful," wrote Tribune architecture critic Blair Kamin.

City officials claimed they were just trying the idea out. The ads were up for a month and brought the city $4,500. That would have added up to $54,000 for a full year—quite a few bucks short of the initial projections of the city reaping millions from bridge ads.

It didn't slow the mayor's plans.

Days after the ads went up, the City Council met to consider Emanuel's 2012 budget. There was plenty to spark controversy—a hike in taxes, deep cuts to library staffing, the closure of mental health clinics—but the mayor showed a willingness to compromise, and aldermen approved the budget with a 50-0 vote.

But one significant part of the budget package was largely overlooked: an amendment to the municipal code that expanded the role of the city's chief financial officer. The new law authorized the CFO to determine which city assets might be "desirable to potential commercial partners," and then to broker deals that could leverage the assets for cash.

The law also made it clear that everything of value was on the table. "'Assets' means all assets available to the City," it said, including buildings, vehicles, and "intangible property" such as event sponsorships and logos.

The day after the budget vote, the city issued a solicitation for private partnerships that was extraordinary in its scope. Rather than specifying what the city was looking for, the notice invited firms to come forward with ideas for how they'd like to make money off city properties.

The prospects weren't limited to physical objects or space. "Certain municipal services and programs may be of interest to advertisers and sponsors," the solicitation said. "Opportunities may take the form of advertising on City property, contributing to operating and maintenance costs of the program, preferred product endorsements or other opportunities."

The request concerned the few aldermen who examined it closely. "I think municipal marketing is a good idea, but when you attach a sponsor to a city service or department, it can blur the lines," says Ameya Pawar (47th). "I don't want the Department of Streets and San brought to you by Mr. Clean."

In the first part of 2012, public attention turned to another kind of public-private partnership proposed by Mayor Emanuel. With backing from Bill Clinton, Emanuel announced plans to create an infrastructure trust, a quasi-governmental nonprofit organization that would line up private-sector financing for public works projects. In an era of reduced federal funding and a heavily indebted city government, the trust would "try to create a bridge between where capital exists and where the projects exist," Scott, the CFO, told me.

The bottom line was that the plan would privatize the process of choosing and funding public infrastructure projects.

Though Emanuel and Scott never explained how exactly it would work, why it had to be done through a separate nonprofit entity, or what it would cost taxpayers, the City Council approved the plan in April. Months later, the trust still doesn't have an executive director or staff, but officials revealed over the summer that they've already been shopping around for investors to fund energy efficiency retrofits in city properties, including the water filtration system. One public interest group, Food and Water Watch, has warned that a deal involving the water system could give so much control to investors as to amount to privatizing it.

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