Mayor Rahm Emanuel was accused Thursday of “making a bad deal worse” by extending for four more years a 20-year digital billboard agreement that left Chicago taxpayers on the short end of the stick.
If the clout-heavy partnership that includes JCDecaux and Interstate Outdoor Advertising has been slow to put up digital billboards, that’s their problem, said Ald. Scott Waguespack (32nd), a leader of the City Council’s Progressive Caucus.
It is not an excuse to tack on another four years to a contract that was not lucrative enough for Chicago taxpayers, Waguespack said.
“They knew exactly what they had to do to get this thing done. They didn’t run into weather delays and passage of a law down in Springfield as a problem. They ran into an inability to follow through on what they said they could do,” Waguespack said.
“On one location, the mayor’s office was prepared to drill and they almost drilled into the MWRD [Metropolitan Water Reclamation District]. Luckily, we were able to hold that one up before they destroyed the system. That’s not a weather delay. That’s an abominable mistake. We should mot allow another four years because of their incompetence.”
Waguespack said he has five of the digital billboards already in his ward and was just informed that two more are going up “right in residential areas” of Bucktown and Lincoln Park.
“Extending it to 2037 makes a bad deal worse. None of my constituents or businesses want to see any more of these. They didn’t want ’em in the first place. It’s not good for residents and businesses that have to sit there and look at these things for another four years,” he said.
“When you look at the monetary amount we were getting for giving a company city property, for giving them basically a waiver of all the laws that would normally have to be followed to put up a billboard or a sign, they got away with more than they ever could have in any other city,” Waguespack said.
Ald. John Arena (45th) said he’s had “concerns from the beginning” about the digital billboard deal, which Emanuel now wants to extend under the same basic terms, according to top mayoral aides.
“It seemed like we were paying for the system and they were taking the lion’s share of the revenue,” Arena said.
Arena said the agreement has been a “difficult contract to honor.” He noted that he delayed installation of a billboard on Laramie and Wilson in his Northwest Side ward because it would have “basically closed down a public street.”
“They were gonna put a a billboard on an open street and cul-de-sac a street. They were saying it was OK to take a public street to put a billboard up. I stopped it. I’m now negotiating with CDOT and the administration on some traffic plan that would still allow traffic to flow on the street,” Arena said.
“If they’re doing any kind of extension, they should it open it up and make sure we have protections so we don’t have to sacrifice the public way to satisfy the contract,” he said.
The original agreement called for JCDecaux and Interstate Outdoor to put up 34 digital signs on city property adjacent to the Kennedy, Dan Ryan, Stevenson and Eisenhower expressways and the Chicago Skyway and Illinois Tollway.
In exchange, the joint venture guaranteed Chicago taxpayers $15 million in 2013 and $154 million over the 20-year life of the contract.
The city hoped to generate as much as $270 million over 20 years through a revenue-sharing arrangement that starts with 50 percent of the first $25 million in advertising revenue raised.
The deal was originally scheduled to expire in June 2032. It will now be extended under the same terms until June 2036.
Earlier this week, Chief Financial Officer Carole Brown said the agreement was extended because of “unforeseen delays” with getting the digital billboards up, a process that has still not been completed four years after a divided City Council approved the original contract.
Emanuel met privately last month with JCDecaux CEO Jean Francois Decaux, presumably to discuss the contract extension, according to his daily meeting schedule.
“We thought by this time we would have all of the signs up. . . . The original contract called for 60 faces. The reason I’m talking about faces and not signs is that some of the signs have one face. Some have two faces. And we have about 12 more faces to go,” Brown said.
“There were delays for a variety of reasons. One was kind of weather. The other was taking longer to get IDOT permits and go through the IDOT permitting process. Staging for construction because each sign has to be fabricated,” she said. “There were a number of delays that were not anticipated when the contract was first negotiated. . . . In order to maximize the revenue potential, we thought it was prudent to extend the contract.”
