With Time Off Its Hands County Can Now Seek Sewer Sponsors
Written by Michael Lewis on March 20, 2008
By Michael Lewis
Today’s lesson in public policy: be careful what you suggest — someone might actually be listening.
Just a year ago this column urged governments to raise cash by selling naming rights and sponsorships on anything they could think of. Take a lesson from Chicago, we suggested, which was seeking bids to rebrand the Chicago Skyway Toll Bridge. If companies would pay to name a toll road, we wrote, government here could sell off just about anything.
Well listen, folks, we were just having a bit of fun. Honest. We thought it was perfectly clear.
When we said the county could sell names on manhole covers, we weren’t serious. When we proposed time-share sponsorships on electric signs naming public streets, it was in jest. We really didn’t mean our comment to sell off the name of the airport, either.
Of course, it’s a little late to clarify that now: both Miami-Dade County and the City of Miami are diving head first into the pool of sponsorship dollars. And they’re dead serious.
First, Miami is seeking revenues by selling licenses for massive electronic murals along downtown streets.
Beyond that, the city, facing a $22 million revenue shortfall next year, voted tentatively last week to sell off names of regional park buildings and programs. On the final vote, the city plans to broaden the sale to include local parking buildings and programs.
The county commission, meanwhile, voted 12-0 this month to sell off the sponsorship of all time — all time at the airport, that is.
On a no-bid contract, commissioners turned over sponsorship rights to a master clock system at Miami International to a year-old, one-man company from Palm Beach County that’s supposed to install 182 clocks throughout the airport’s terminals, hire a firm to sell ads on the clocks and split the ad proceeds with the county after five years or when the company pays off the clocks, whichever comes first.
Well, hand it to the county: it saves face by not having to install the clocks, a minute $1.9 million saving on an airport contract that has run billions over budget.
But though the no-bid contract seems carefully drafted to protect county interests — assuming that relying on a one-person affiliate of a Brazilian company that has no US airport contracts is wise — the clock deal does remind us of the pitfalls governments face when cutting for-profit partnerships.
The first is making sure funds exist to share. The county cut a deal for the AmericanAirlines Arena that provides payment to the county above a revenue level that has yet to be achieved — and is unlikely to ever be.
The county has never gotten a dime.
The same applies to the future Marlins baseball stadium, in which the county is to share proceeds if the team is sold — but payout levels decrease annually until the sale and disappear totally after five years. Again, the county is likely to collect exactly nothing.
The second concern is getting into a deal because it’s "free."
Someone else is to install and maintain the clocks. That saves what the county estimates would cost it $1.9 million — though the contractor, GMüller LLC, says it will install those same clocks for $665,826, a third of the county’s estimate. Will the county get top quality for airport users for a third the cost?
The value of "free" may not be full value.
Government paid more than $8 million to environmentally cleanse "free" land from Sears for a performing arts center. And Knight Ridder’s "free" arts center land across Biscayne Boulevard cost millions in streets closed for the donor’s benefit, plus a raft of bonus developmental rights for Knight Ridder to sell. Buying a better site elsewhere might have cost less than "free" land.
Likewise, the "free" Orange Bowl site for a Marlins stadium will cost government untold millions to move roads and utilities and then build new roads. What’s free about that?
While one never wants to look a gift horse, or gift clock, in the face, why did the county ask 50 companies about a clocks sponsorship and only GMüller spoke up?
This process started four years ago. There was time to alter proposals to lure better-known firms.
Please note the "four years ago" phrase: that was well before our suggestion for time-share sponsorships. This is someone else’s brainchild, not ours.
But at least the county is looking for payback from the clocks. That springs many steps forward from naming rights for the Marlins stadium, which the county plans to hand the team free and clear to sell for as many millions as it can get.
So even if the clocks deal winds down with no cash payout, the county is better off than with baseball. At least government will wind up with free time on its hands, 182 times over.
Who says there is no progress? Will manhole naming rights be next?