Goodman, council may sell space for City Hall ads

Diana Sahagun

Thursday, Jan. 17, 2002 | 11:14 a.m.

In its run for the money, the city that's considering leasing its logo to an Internet casino -- and whose mayor would love to be the spokesman for Beefeater Gin -- now is looking at selling advertisers space on public buildings including City Hall.

Under a proposal that could raise hundreds of thousands of dollars for city coffers, Las Vegas would be on the cutting edge among municipalities trying to attract advertising dollars.

"This is Las Vegas, the city that never sleeps, so advertising on the side of city hall wouldn't surprise me," said Chris Hoene, research manager for the National League of Cities, noting he's never heard of a city offering advertising on public buildings. "In another sense, (City Hall) is the one place where the rest of what Las Vegas is known for isn't pervasive."

Other governments have offered advertising on public buses or bus shelters, and a few, such as North Las Vegas, offer empty land as advertising space. But neither the National League of Cities nor Las Vegas' own research has found another city that offers space for sale on public buildings.

Betsy Fretwell, the assistant city manager, said Las Vegas would be unique because City Hall and an accompanying parking garage are highly visible from a major freeway, U.S. 95, and thus perfect for advertising.

Mayor Oscar Goodman, who has explored opportunities to be a spokesman for a gin company, said he supports the idea of using city space for advertising.

"It could be a gold mine, but it has to be balanced with First Amendment concerns," Goodman said, "and it can't embarrass the city."

On Wednesday, the City Council directed staff to solicit proposals for an outside partner -- such as an advertising firm -- that would assist the city in exploring new advertising venues, including leasing space on public buildings, park benches and city vehicles.

The proposal, ranging from accepting advertising on buildings to city vehicles, raises questions ranging from First Amendment issues to the ethics of city regulation of advertisers.

From an aesthetic standpoint, Marcia Forkos, chairman of the Southern Nevada chapter of the Sierra Club, said advertising is an eyesore and the city needs less of it, not more.

"The idea sounds horrible," Forkos said. "Especially if it's going to be intrusive and evasive like in a park or on buildings. We're inundated in our mail, on the TV, everywhere you look. I think the city's looking at gaining revenue only, and I think there are other ways to do that."

The venture follows Goodman's lead. The mayor has insisted on exploring new ways to generate revenue. During the past year he has suggested selling the city's official name and seal to an Internet casino, and he is considering using his likeness as the sponsor for Beefeater Gin.

Councilman Larry Brown said the idea of allowing the sale of ads on city property has floated around City Hall for three years, so he urged city staff to "get very aggressive" in determining the financial possibilities.

City officials say opportunities could include leasing ad space on buildings such as city hall, fire department headquarters, the Mirabelli Community Center and the municipal pool. Space on park benches and trash cans could also be leased.

More common options the city also plans to pursue include selling ad space on the city's two trolleys, which operate through downtown and a senior neighborhood; on city trucks and on six new natural gas-powered buses recently acquired by the city.

The question of the city being in conflict in terms of regulating businesses that advertise with the city is moot, Hoene said, because cities already have relationships with vendors who supply products to the city.

Deputy City Attorney John Redlein said the city could not control advertising content because it would only be selling the space. If the city tried to regulate the types of advertising permitted on taxpayer-supported space, it could tread on speech protected under the First Amendment, he said.

Instead, the city would chose a partner. The partner, who is expected to be selected in 60 to 90 days, would work as the liaison between the city and interested advertising agencies. With the city's input, the partner would also establish criteria regarding what type of ads are allowed.

Gary Peck, executive director of the Las Vegas ACLU, said he agreed with the city's analysis that it could not regulate the advertising content, but he said the city could not hire an outside firm to censor on its behalf.

"The city cannot circumvent or avoid those First Amendment requirements by hiring a private company and saying in effect, we can't discriminate but you can," he said.

Peck said as long as the advertising is legal and does not promote illegal activities, it can not be discriminated against.

"If the business is lawful and the ad is lawful, there has to be a level playing field and you can't turn advertisers away because they are disfavored," he said. "The government can't say we like family oriented restaurants, but we don't like night clubs."

Fretwell said the council must determine whether the city's cost to hire a partner to lead the effort and manage contracts with advertisers would be profitable when compared to the amount of revenue generated. The city would likely include a contract clause that would allow it to opt out if the venture proved unsuccessful, Fretwell said.

Paul Brown, director of the Southern Nevada office of the Progressive Leadership Alliance, said he was skeptical that the advertising would generate enough money to cover outside staffing costs.

"I am a little concerned the revenues might be eaten up on administrative fees," he said. "I wouldn't be surprised if 1 percent of the city budget was helped by the revenue from ads."

He said residents are inundated with ads and would likely prefer to take refuge at city buildings or parks. But he admitted that if the additional revenue is substantial enough to keep services that would otherwise be cut, perhaps it's a good idea.

"If you're talking about cutting a program for lack of money ... and this could stop that, maybe it's a good idea," he said.

The Regional Transportation Commission, an independent agency that runs the region's public transit system, already courts advertising for its 300 buses.

The commission contracts with Wilkerson Consulting, which handles the selling of space to advertisers. The firm receives $5,000 per month, as long as it maintains a $50,000 revenue stream to the commission per month, said RTC spokeswoman Ingrid Reisman.

The commission has received $700,000 per year for the past two years, which goes into transit system coffers, she said.

City officials estimate inside panel advertising could generate from $10,000 to $40,000 per bus per year. If the trolleys were wrapped in advertising, the city could receive $120,000 per year.

Another option would be to lease city-owned land, which could be used by advertisers. North Las Vegas, which leases land for this purpose, produces about $25,000 per site.

RTC staff created its own advertising policy, which was approved by the commission. In part, it states that the RTC will not accept ads that are "obscene, libelous or fraudulent ... that glamorize or otherwise promote violence, sexual conduct, alcohol or tobacco use by minors, or that are reasonably determined not to be in good taste."

Shauna Forsythe, president of FFE Display Services who also oversees airport's advertising contracts, said that to ensure successes at the city level officials must first thoroughly research the issue. Second, rules must be established to determine what venues are appropriate for advertising.

The advertising contracts at McCarran, which is funded through its own revenue-generating sources, are worth about $10 million per year.

"You are looking at augmenting and increasing some type of revenue source in the face of potential downturns in the budget," Forsythe said. "It could be something that could be valuable if established right. The key is making sure the program is outlined very clearly from the beginning."

Dan Jaffe, executive vice president of the National Association of Advertisers, said many major cities have opted to sell add space on subways, buses and even taxis to provide an additional source of revenue. In Washington, where the association is headquartered, the city sells space within bus kiosks, he said. "This is a way to raise additional revenue, and it's also a way if (the city) has particular information they want to get out, then they can use their own facilities," he said. "It's a dual possibility."

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