Mayor Rahm Emanuel’s administration has quietly approved a $10.5 million addendum to a digital advertising deal at O’Hare Airport that makes it even more lucrative for a clout-heavy company.
The agreement paves the way for Clear Channel Outdoor to take over management of luggage cart services at O’Hare currently controlled by SmartCarte and to sell advertising on those carts.
“This is a supplement to the five-year master agreement approved by the City Council in 2013,” mayoral spokesman Andres Orellana wrote in an email to the Chicago Sun-Times.
“This … adds luggage cart management services for [O’Hare] to the agreement, as was originally contemplated in the Airport Advertising RFP [request for proposals]. Under the Clear Channel agreement, the city receives 21% of luggage cart gross revenues and, for the first time ever, 71% of any advertising revenue.”
Under questioning, Orellana said Smart Carte has been operating on a month-to-month contract since August 2007 without the ability to sell advertising on luggage carts.
Orellana supplied no figures on luggage cart use or projected advertising revenue.
Ald. Bob Fioretti (2nd), a mayoral challenger, said the luggage cart addendum makes a “sweetheart deal” even worse.
Two years ago, Fioretti accused Emanuel of giving Clear Channel the right to sell digital advertising at Chicago airports to “make good” for the electronic billboard deal the company lost adjacent to Chicago area expressways.
Fioretti pointed to the array of lobbyists who descended on the City Council. They included Tim Dart, brother of Cook County Sheriff Tom Dart. Tim Dart represents Clear Channel.
“We know how bad and lopsided the expressway digital signs were — against the city and for the owners. This was a huge make-up. And the [luggage cart addendum] is more of the same. More insider deals. More avoid the City Council. This just stinks to high heaven,” Fioretti said Tuesday.
“They probably had this [luggage cart amendment] in their plans all along. Big money is starting to control City Hall like we’ve never seen before. Some days, you can’t even get on the City Council floor, but the lobbyists can.”
The new contract requires Clear Channel to install 3,200 braked carts throughout O’Hare terminals and provide 300 additional free carts and a vended luggage cart service in the renovated Rental Car Facility. Free luggage carts must also be provided in the U.S. Customs area. The company can charge up to $5 in the other terminals and departure/parking in the international terminal through 2016, then raise the fee to $6.
In April 2013, the City Council approved a pair of lucrative five-year contracts with Clear Channel and JCDecaux — with five-year renewal options for both companies — that opened the door for O’Hare and Midway to enter the digital advertising age.
Opposition to both deals came from Fioretti and John Arena (45th), who led the opposition to Emanuel’s expressway billboard plan.
Arena warned that electronic billboards “everywhere you turn” at O’Hare would make Chicago a sleazy Midwest replica of Las Vegas.
He has also objected to Emanuel’s decision to forge ahead with JCDecaux, when the French bus shelter operator that has a piece of the expressway deal was the only respondent to a contract that may well be amended down the road to include billboards on the roadways leading to and from O’Hare.
At the time, the contract authorized Decaux to install outdoor advertising at O’Hare — including “exterior wrapping and interior displays” on people mover cars and stations — in exchange for 50 percent of advertising revenues.
Fioretti voiced similar aesthetic concerns and questioned whether Clear Channel dropped its threat to block the expressway billboard deal in exchange for the promise or airport business.
Then-Aviation Commissioner Rosemarie Andolino brushed aside talk of sweetheart deals and Chicago turning into a Midwest Vegas.
“We have advertising today. It just replaces static with digital. We were getting no money for any outdoor advertising,” Andolino said then.
“It’s not an insider deal by any means. It was competitively bid and they responded to that. There were other outdoor elements that were available to people to bid on. People chose not to because they felt the real benefit was just the people-mover.”
The original Clear Channel agreement included a minimum annual guarantee of $8.6 million or a percentage fee of 71 percent of sales, whichever is greater.
In exchange, Clear Channel would be free to take full advantage of what City Hall calls the “ongoing evolution” of digital media.
Since 2001, Clear Channel has made $212,360 in contributions to state and local politicians.
Among the biggest benefactors has been Ald. Edward Burke (14th), chairman of the City Council’s Finance Committee.
Political committees controlled by Burke have received roughly $17,000 in contributions from Clear Channel. State Supreme Court Justice Anne Burke, the alderman’s wife, got a $5,000 contribution from Clear Channel.
The company has also contributed to a handful of other present and former aldermen and made a $300 contribution to Fioretti.