$1 billion contract - Gimme shelter: NY seeks ad sites

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New York City is all set for an influx of thousands of new ad sites on its streets. The city has put out the call for bids on a 20-year contract worth an estimated $1 billion to design, build and install street furniture wrapped in advertising space.

However, the selection of a winner could be held up if the New York City Newsstand Operators Association makes good on its threat to sue the city. The coalition, whose members include independent newsstand owners as well as newspapers such as The New York Times, wants to thwart plans, outlined in the contract's request for proposals, to remove roughly 300 newsstands owned and operated by independent proprietors. The newsstands would be replaced with structures owned and maintained by the contract winner, and operated by city-licensed entrepreneurs.

In addition to newsstands, other furnishings figuring prominently in the proposal include bus shelters, automatic public toilets and "public service structures," which include trash receptacles and news racks. Officials for the city, which has never before issued a comprehensive contract covering so wide-ranging a variety of structures, estimate funds generated over the contract's lifetime could reach as much as $1 billion.

"It has always been the goal of the Bloomberg administration to have a coordinated street-furniture effort," said Tom Cocola, a spokesman for the Department of Transportation, the city agency issuing the RFP. "Mainly we want to protect and preserve the beauty of the city, and do it in an orderly way. And certainly there are more revenue possibilities."

not pleased

Under the contract's terms, the successful contractor will control 80% of available advertising space while the city keeps rights to the remainder. Newsstand operators, historically barred from posting advertising on their structures, are not only in danger of losing their businesses, but will also be shut out of the revenue generated from ads on the newly erected newsstands.

"We are not too pleased with this scheme," said Robert Bookman, attorney for the Newsstand Operators Association. It "will transfer ownership of newsstands from private mom-and-pop operators to large corporations with no compensation to us."

Viacom Outdoor, a unit of Viacom, currently maintains and sells advertising on the city's 3,125 bus shelters. A Viacom Outdoor spokeswoman said the company intends to respond to the RFP, issued March 26. Other participants include JC Decaux, Clear Channel Outdoor and Cemusa North America, a subsidiary of Spanish construction company Fomento de Construcciones y Contratas, which holds contracts on street furniture operations in Italy, Portugal, Mexico and Central America as well as in San Antonio and Miami-Dade County, Fla.

Proposals are due June 30, a pre-proposal conference for all interested parties is scheduled for April 27. Each of the four bidders appears to be girding for a fight by hiring high-powered lobbyists to plead their cases with City Hall, according to Crain's New York Business.

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