The MTA is set to unveil a series of budget documents this week that will set the stage for the next few years’ worth of conversations. They’re unveiling revised estimates for the current capital plan based on the need to spend money to repair the system and mitigate the impact of future storms and surges, and they’re keeping in an eye on the next twenty years of system growth as well. I’ll be taking a closer look at these documents this week, but one theme is a constant: Where will the MTA get the money to do whatever it is it wants to do?
One way the MTA won’t get money is through station naming rights deals. The agency needs billions of dollars, and even the most lucrative naming rights deal in the U.S. is worth only around $1 million annually. The MTA’s one current naming rights deal for a subway station is netting the agency a whopping $200,000 a year. But that’s not stopping the MTA from putting itself out there. This week, as part of the July board meetings, the MTA is formalizing its station naming strategy, and I think it gets everything right. Whether it can make money from the effort remains to be seen.
The new guidelines will be voted on this week, and they are available as a pdf on the MTA’s website. The MTA is consolidating the naming rights process and procedures so that Jeffrey Rosen, the head of the agency’s real estate department, and the new policy will not apply to directional signage, changes to the street grid or advertising campaigns that have no impact on a station name. It will apply to any other situation where an advertiser wants change “the official designation” of any MTA facility. This can include signage, maps and on-board announcements similar to the way Barclays Center has replaced Pacific St. at the Atlantic Ave. subway complex.
By putting forward this proposal, the MTA says it wants to receive “fair value” for the rights to name its stations. At the same time, the agency wants to “respect the historic nature” of its stations — which is less of a concern than the third factor: ensuring that customers can “safely and efficiently navigate the MTA system.” The third qualification I’ve stressed repeatedly, and it’s why SEPTA’s naming rights deal fails. AT&T Station — the replacement name for the Pattison station — tells a rider nothing about the station; it could be anywhere. But for its flaws, Atlantic Ave./Barclays Center carries a major destination in the sponsored station name.
With these policy goals in mind, the MTA set forth its standards. It will require “a compelling nexus between the Facility and the Sponsor” for any naming rights deals. “Requests for renaming,” the policy says, “will only be accepted from Sponsors with a unique or iconic geographic, historic or other connection to such [station] that would be readily apparent to typical MTA customers.” In other words, advertisings just looking to slap their names on a station won’t be able to do so. The Tropicana Station at Bryant Park won’t become a reality, but if Macy’s, for instance, wanted to buy out the Herald Square station, the MTA may listen. This limitation could eliminate many potential advertisers before the MTA even has the chance to discuss money.
If any naming rights venture gets this far then, the next issue concerns value. Considering how naming rights deals are tough to come by, it’s hard to say what “fair value” means in any context, but in addition to pure dollars, the MTA will also consider promised capital upgrades made by the sponsor or capita upgrades taken on by the sponsor in exchange for the naming rights. In essence, the MTA is creating something of an Adopt-a-Station program. How this works in practice rather than theory again remains to be seen.
Matt Flegenheimer of The Times reported on this plan over the weekend, and he had the chance to gain more insight into the process. MTA advisers recognize that transit agencies across the nation are hoping to draw money from naming rights, and one of MTA CEO and Chairman Tom Prendergast’s right-hand men claimed that “from time to time,” advertisers have expressed an interest in making a deal.
The policy, the MTA says, is to protect its customers too. “We don’t want to be confusing people,” Allen Cappelli, an MTA Board member, said. “There are neighborhoods where I would be very hesitant because of the geographic significance.” The MTA also won’t rename stations for people, living or dead. (Sorry, Ed Koch.)
This all sounds well and good. Yet, I can’t help but think it’s all for nothing. I’ve followed this issue for years, and nothing much has come of it. Madrid recently renamed an entire line for just €1 million a year while Boston has unsuccessfully put its station names up for sale. Austin, Toronto, New Jersey, D.C. and Chicago all want someone to pay for their stations, but very few people are biting. It’s too hard to overcome the stigma of being associated with something most people love to hate for these deals to be worthwhile. Maybe the MTA can realize some dollars, and they have a solid policy in place. But it’s a policy more like than not to go untested over the years.