Dec
05

The never-ending false promises of transit naming rights

By

AT&T's Philadelphia deal included the rights to be the exclusive wireless provider for SEPTA. (Photo by flickr user Saturdave)

As transit agencies across the country have struggled to find adequate amounts of money over the past few years, the promise of lucrative naming rights deals hovers at the edges of any discussion. On a practical level, our own MTA secured $200,000 a year for 20 years to append the Barclays Center moniker to the Atlantic Ave./Pacific St. stop, and in Philadelphia, AT&T paid out $5 million for a five-year deal to completely rename SEPTA’s Pattison Ave. stop. Beyond that, naming rights have remained a mirage.

Across the country — as a simple Google Search shows — transit agencies have been seduced by the allure of dollars for names. Boston has explored potential naming rights deals and so has Austin. Dallas is currently working to market its stations, and Chicago has tried various approaches with limited success. Apple paid to overhaul a CTA stop near one of its Windy City stores, but the CTA hasn’t shopped naming rights. Simply put, there isn’t a lot of money in these agreements.

That doesn’t, however, stop potential politicians from trying. Tom Allon, the CEO of Manhattan Media and potential GOP mayoral candidate (that is, if Joe Lhota doesn’t step in), penned a piece during Thanksgiving week calling upon the MTA to sell station naming rights. He wrote:

The MTA runs more than 400 subway stations and more than 5,000 bus stops. That’s very valuable — and visible — real estate that should be monetized. If we sold the naming rights to each bus stop for, say, an average of $5,000 per month and subway stations for an average of $10,000 per month (based on my own experience and estimates), that would generate $360 million per year in new revenue — the lion’s share of the current $400 million deficit that is precipitating the fare increase proposal.

Would you rather pay an extra $120 per year to commute or start referring to the Times Square subway station as “Pepsi Times Square”? Not a tough choice for me, especially since our transit system is already covered in ads.

Moreover, we routinely sell naming rights in the private sector to stadiums (Citi Field in Queens, Barclays Center in Brooklyn), hospital wings (NYU’s Langone Medical Center), university buildings (the Arthur L. Carter Journalism Institute, also at NYU) and other institutions. For that matter, now that the Barclays Center is open, the subway station beneath it has been renamed “Atlantic Avenue – Barclays Center.” Nobody seems outraged by the change so far. Sure, some will call this crass, charging that we are commercializing some of our public spaces. However, such criticisms would be misplaced.

In my mind, privatizing the names of stations is a small price to pay to keep fares down for working-class New Yorkers, who depend on mass transit each day to get to their jobs, at a time when median wages are not rising nearly as fast as the cost of living here.

Allon went on to suggest a series of (unfortunate) names: There’s Time Warner Marcy Ave., Nike Union Square, and Ray’s Pizza 68th and Broadway. No word if he meant Famous Original Ray’s or Ray’s Original Pizza.

If only it were that easy though. Unfortunately for Allon, it takes two interested parties to complete a naming rights deal. Someone has to want to sell those rights, and someone else has to want to buy them. The second someone else hasn’t been as forthcoming as the first. For starters, transit infrastructure does not have the best reputation in the world, and may companies are hesitant to append their names to something not safe. Imagine if this past Monday’s horrific incident had happened at M&M’s 49th St. station instead of just the 49th St. station.

Furthermore, will anyone really pay $10,000 per month? The MTA’s only current naming rights deal is for $16,666 per month, but it’s also at a station that saw a pre-Barclays Center average of 33,000 passengers per day. Marcy Ave., used in Allon’s example, has a daily ridership of around 11,000, and a large number of stations see well under 5,000 passengers per day. Allon’s revenue projections aren’t just optimistic; they’re flat-out impossible to attain.

It’s notable that Allon, ostensibly a serious candidate for mayor, is talking transit. That’s seemingly more than many of his Democratic counterparts have done so far. But his idea isn’t based in reality. It’s a populist trope with no money behind it. Naming rights aren’t some panacea for funding woes, and the more time politicians spend dallying on the idea, the less time they devote to truly transformative and revenue-generating policies instead.



Categories : MTA Economics

23 Responses to “The never-ending false promises of transit naming rights”

  1. John-2 says:

    Of the city’s 422 subway stops, at best maybe 20 percent of them could garner some sort of naming rights that would produce enough cash to make the effort worthwhile. The others are either stations not important enough for any business to make a bid for, or too far away from the main areas where you would either have a business big enough to make a decent bid, or where there would even be a business big enough to justify the MTA going through a station name change (based on the idea that you can change at least justify adding Barclay’s Center to the Atlantic Avenue name because it’s now a prominent feature of the area. Renaming some stop on the outer section of the J train for Joe’s Delicatessen? Now you’re just confusing your riders).

  2. Dan says:

    $5,000 a month for a bus stop is absurd. Is there a single stop worth anywhere near that? And most of his revenue comes from that. 5,000 bus stops at $5,000 a month is $300m a year.

  3. Jim says:

    Stadiums are different. Their names get mentioned on national TV during sports broadcasts. No one ever mentions a subway stop, unless there’s been a tragedy there. Barclays was a special case: How do you get to Barclays Center? Take the train to the Barclays Center station. If that sort of wayfinding brings more paying customers, it’s worth paying for.

  4. LLQBTT says:

    Hospital wings are named for people because they have made a philantropic gift to fund (fully or in large part) the building/remodeling of a wing. If this is the best the local GOP has, this guy may as well join the ‘fiscal cliff’ negotiations. As a GOP 1%’er, I’m sure he’ll add lots of value…

  5. TP says:

    I actually agree with Allon on his broader statement that the MTA has a ton of “very valuable and visible real estate that should be monetized,” although I agree with Ben that naming rights aren’t the ticket.

    It’s not just the MTA; large institutions suffer from a total blindness when it comes to efficient use of space. Small entrepreneurs are incredibly mindful of their rent. That’s why Chinatown is teeming with activity: every square inch of space is being “monetized” — there are businesses within businesses on top of other businesses. For all this talk of “forensic audits,” the MTA should be required to show how it is efficiently using its real estate holdings; to quickly lease or sell off anything that’s not absolutely necessary. New York is one of the most expensive cities in the world. If the MTA can’t figure out how to use even a small underground hallway, somebody can probably run a business out of it. Or go bigger: cities like Montreal and Toronto have major underground malls in the passages between downtown subway stations. The MTA does a piss poor job of even filling the few minor retail spaces at Columbus Circle and Times Square.

  6. Peter says:

    I agree with TP. It seems there’s lots more space that can be “monetized” in the system. What about advertisements on station walls? You see that in Paris and London. I’ve heard it doesn’t happen here because the tracks are active 24/7 and there’s no time to change out the signage, but it seems like that’s a problem that could be overcome. I’m disgusted by station naming rights, but plastering more advertisements in the system really doesn’t bother me.

    Speaking of Columbus Circle: the MTA has been making some money off that unused retail space. It was turned into a gigantic NYC Marathon ad a few weeks back, and now it’s an ad for “The Hobbit,” complete with video screens and audio. It’s actually pretty cool.

  7. Ed says:

    John-2, local businesses would probably pay something to name the local station after the business.

    I’ve swung around for this, on the grounds that the names in a civilization should reflect the values of the civilization. So what the hell. Auction off everything. Sell the naming rights for the city itself.

  8. SEAN says:

    I don’t have an issue with station naming rights as I have posted previously, but these dollar figgures being quoted seme like they came from fantasyland. There’s no way that Atlantic Avenue Barclays Center has the same naming value as say Pelham Parkway or Kew Gardens Union Turnpike.

    Now I could see Macy’s append it’s name to 34th Street Harrald Square as that carries heavy name recognition & tourist traffic. Same thing for 59th Street & Lexington if Bloomingdale’s had it’s name appended, but most subway stations just have a local neighborhood focus & couldn’t generate that type of revenue. However that doesn’t mean the idea shouldn’t be explored further, as there maybe hidden gems in plain sight.

  9. Frank B says:

    I really didn’t have a problem with the Barclays Center Renaming in that it actually helps passengers know when to get off the train; Atlantic Avenue – Barclays Center is ACTUALLY in the proximity of Barclays Center. While Pepsi Time Square would make no sense, perhaps Columbus Circle – Time Warner Center would actually raise revenues, while helping riders going to a popular destination.

    Another good example would be the CitiGroup Center in Long Island City; they could pay for naming rights at Court Sqaure-CitiGroup Building. Or Court Sqaure- CUNY School of Law. How about 21st Street-Museum of Modern Art PS 1? (IND Crosstown Line)

    These naming rights could even work for Long Island Railroad and Metro North Stations. How about Forest Hills- West Side Tennis Club? Or Stamford- RBS Headquarters?

    And each naming right need not be 20 year, multimillion-dollar deals. In the outerboroughs, local small businesses could get a much, much lower rate. Di Fara Pizza in Brooklyn has been rated as the best pizza in Brooklyn; and it’s right off the BMT Brighton Line; how about Avenue J – DiFara Pizza?

    With 490 stations (Including the SIR) even the small businesses slapping their names on the map would help people looking for these businesses, large and small, while pushing the MTA’s budget further into the black.

    • If you were a small business — or even a large business — how much would you pay for those naming rights? Di Fara’s, for instance, isn’t hurting for customers. Then, how do you address the reputational problems that come from being associated with the subway stop?

      Have you seen the state of 21st St. on the Crosstown? Would MOMA want to be associated with something in such a decrepit state?

      • SEAN says:

        This would insentivise the MTA to repair stations & clean up the neighborhoods around them if they want to sell the naming rights. In My Macy’s & Bloomingdale’s examples in my last post, are you telling me that federated doesn’t have the finantials to aid the MTA in upgrading stations near there flagship stores? It would be in there best interest to do so as the subway system crosses all socio-ecconomic levels.

        Look at this from another perspective; Macerich the owners of malls across the country including Queens Center, just spent 1.25 billion dollars aquiring Green Acres & Kings Plaza. I think Macerich could spend a few bucks renovating the station near one of there top grossing malls. BTW, Queens Center just happens to be one of the top performing malls in the US, out grosing such heavyweights as Garden State Plaza & Roosevelt Field.

      • Frederick Smith says:

        There are no “reputational problems that come from being associated with a subway stop”. Get real. Clearly, not all stops/stations are created equal but there is potentially huge upside to this idea.

  10. Matthias says:

    Look at what New Hampshire is considering:

    http://www.unionleader.com/art...../121209576

    • I caught this article this afternoon, and it suffers from the same problem. The New Hampshire legislature can legislate naming rights until the cows come home, but few companies, if any, will buy. I’d love to see the companion article with the headline, “No company to buy naming rights to roads, bridges, roadways.”

      • Frederick Smith says:

        There are no “reputational problems that come from being associated with a subway stop”. Get real. Clearly, not all stops/stations are created equal but there is potentially huge upside to this idea.

  11. AG says:

    Well there is no question that some stations could garner more revenue than others.
    As far as the less lucrative… Why not “adopt a station” for local businesses/institutions just like they do “adopt a highway”??
    It’s being done in subtle ways without “naming rights”. In the midtown east rezoning proposal – money from air rights would be used for transit improvements. On the westside the developers of the Cheslea Market agreed to pay millions for the Hudson River Park. We see it in Brooklyn Bridge Park etc. etc. Reality is there needs to be creativity in raising money for transit.

    • Joseph Steindam says:

      I think the adopt-a-highway example is the right analogy, money from the naming right deal would be expected to pay for improvements and upkeep of the named station. While this is absolutely a great thing because the MTA budget for upkeep has always been lacking, the money can’t also be used to solve the MTA’s deficit. It has to go to one problem or another, and the naming right deals could most likely only be sold by reserving the money raised for station upkeep.

      The bigger problem, as everyone else mentioned, is that not all stations are made the same. Perhaps 10-20% or stations might be lucrative (most Manhattan stops below 59th street, plus a few others) and net more than the $10,000 a month average proposed, but plenty couldn’t bring in that much on a monthly basis. Also, would you have to restrict a company to one station, or could an interested buyer purchase naming rights to several stations or a whole line?

      • AG says:

        oh – I definitely don’t see it as a way to solve the deficit… except that it could/would reduce operating budgets. every dollar counts. adopt a highway is a good analogy… The example of what is being done with parks (and the proposal for Midtown East) is more akin to how Business Improvement Districts work. Businesses collectively pay for services to upkeep the area because it increases business for them.

  12. Someone says:

    Bus stops don’t have names…

  13. Christopher A. says:

    Naming rights… Sounds like free money. But it can add to the confusion. The street info must be given first – such as “Times Square”. Only after that should a sponsor’s name appear. So “Atlantic Avenue – Barclay’s Center” would be ok. But “Pepsi Place – Stillwell Avenue” would fail the test. Certain obvious exceptions could be made – such as if the NY Times were to purchase naming rights for Times Square, as the former name was Longacre Square until the NY Times put their building there. But these would be very few and far between….

  14. ajedrez says:

    I’m LMAO at this guy. He thinks a bus stop out on the South Shore of SI has half the advertising value as a big subway station like Columbus Circle?

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