Fate of $1 Billion City Contract -- and Ad Revenue -- Unclear

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NEW YORK ( -- A lawsuit filed yesterday by newsstand operators may block the implementation of a 20-year contract, worth an estimated $1 billion, for street furniture in New York City.

The suit, brought by 11 newsstand operators as well as an association representing newsstand operators and filed in state Supreme Court, seeks to prevent the city from enforcing Local Law 64, which was amended in October 2003. The amendment governs newsstands' installation and maintenance, ownership and placement of advertising.

City contract
The suit also seeks to prevent the city from moving ahead with its plans regarding its Coordinated Street Furniture Contract if the contract includes or covers newsstand operations.

The Department of Transportation issued a request for proposal to vendors on March 26.

The RFP is structured so that advertising revenue will pay for the maintenance and uniform appearance of various street furniture, from bus shelters and automatic pubic toilets to "public service structures," such as trash receptacles and news racks. Under the contract's terms, the vendor selected to handle the contract will control 80% of available advertising space while the city will keep the rights to the remainder.

Advertising revenue
Newsstand operators, who historically have been prohibited from advertising on their structures, do not get any of the advertising-generated revenue. While the newsstand operators lobbied the City Council earlier this year to get a portion of advertising revenue, their effort was unsuccessful.

The newsstand operators contend, among other things, that Local Law 64 violates their property rights as well as their First Amendment rights. "By supplanting individually owned stands -- upon which advertising has been forbidden -- with corporately owned ones, the law forces individual plaintiffs to display and adopt messages that are dictated by the government, contrary to their beliefs, and, in each and every case, are placed without even a hint of consent from the newsstand operators," the suit says.

Outdoor media companies
Numerous media companies, including Viacom's outdoor unit, JC Decaux, and Clear Channel Outdoor, have expressed interested in bidding for the RFP.

The initial deadline for proposals, June 30, was extended to Aug. 5. A spokesman for the Transportation Department said the process will continue as planned. The suit asks the court for preliminary relief before the deadline.

The city intends to vigorously oppose the lawsuit, said Gabriel Taussig, an attorney for the city.

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