MBTA Steps Closer to Corporate-Sponsored Station Names

I've been fairly preoccupied with life lately, so this story (and many others) nearly flew right under my radar, but not before I had a chance to catch the original posting on the Boston subreddit. In short, the MBTA is one step closer to making corporate-sponsored station names a reality in a last ditch and fairly ineffective attempt to grasp at straws for new revenue. No doubt the MBTA is having to continue pursuing this as a means of proving to state leaders that they are doing what they can to resolve the internal financial problems at the T to the best of their ability.

Either way, it turns out that the study by IMG Worldwide found a market for station naming rights and would bring in a potential $18.4 million a year to sell rights to 11 key stations throughout the system, leading to a total $147 million over eight years, according to the MBTA report to MassDOT. According to Mark Boyle, Assistant General Manager for Development and the representative of the MBTA who briefed MassDOT on the proposal, this could be good to go by mid-summer as sponsors line up to have their brands share sign space with historic Boston subway station names.

The unfortunate reality is that this tactic has historically failed to bring in the revenues promised here in Boston and elsewhere. It is a considerably less solid deal with corporations than encouraging developers to build on MBTA property and invite corporations to lease space within those well-situated, innercity developments to bring long-term revenue in as they have been doing for decades in Japan.

This is yet another short-term, short-sighted fix. In the 8 years these contracts would run, a well-designed contract that gives the MBTA a way out of deals that go sour and holds developers accountable for delays could build thousands of housing units (hopefully less stratified than what we already have and actually addresses the glaring housing issues plaguing Boston) and square feet of commercial office and retail space over, in, and around stations. This would further ensure sustained ridership levels, possibly increase non-rush hour ridership, and provide the sustained funds from real estate leasing to maintain and even improve our ailing system.

At the same time ridership growth threatens to overload the system in coming decades, it would be beneficial for the MBTA, Boston, and Commonwealth to create mixed-use neighbourhoods around transit (not at the far flung suburban stations) where people can walk to work and alleviate increasing uni-directional rush-hour traffic volume while still providing new revenue for the T through value capture policies.

There are precedents for doing that here in the US already and many municipalities are adopting these long-term plans to provide additional funds for further improvements from the initial investments (e.g. new light rail lines, subway extensions).

Most importantly, transit-accessible office space is far more valuable to any of these potential investors than the relative pennies they're throwing at the MBTA to slap their name on a station. We have the potential to create new neighbourhoods, strengthen existing ones, provide housing for thousands, and bring back tax revenue from companies that have long since fled Boston proper because of its lack of accessible, modern, and affordable office space. Boston is low on the list of world-class cities playing host to Fortune 500 companies, Liberty Mutual being the only company to call Boston home. Two others, Raytheon and TJX, apparel and home fashion megachain, sit just outside of Boston in outlying suburban office parks accessible by I-95/Route 128, but hardly walkable from any commuter rail station.

While we deliberate and the MBTA/MassDOT continues to insist on calling suburban islands of development around massive commuter parking garages at its fringe stations is 'transit-oriented development', the Boston Metro region will continue to flounder as residents struggle to commute to work in suburban office parks only accessible by car as traffic increases and gas prices soar. Now more than ever does transit matter.

Consumer Advocacy Group Decries MBTA's Sale of Station Naming Rights

The Public Citizen's Commercial Alert released a public letter yesterday to MassDOT CEO and Secretary of Transport Rich Davey speaking out against the ongoing efforts to sell station names to corporations in an attempt to close the $160 million operating budget gap.

Commercial Alert is a Washington, D.C.-based consumer rights advocacy group under Public Citizen whose agenda is to 'keep commercial culture within its proper sphere, and to prevent it from exploiting children and subverting higher values of family, community, environmental integrity, and democracy.'

This news came in yesterday evening from the Metro and was mentioned in this morning's paper.

If the budget gap isn't closed, the MBTA may have to reduce service or cut certain services entirely, but if the MBTA continues this path, the amount it will gain from the naming rights sale to close the gap is dubious.  While Commercial Alert's primary objection to station naming rights is mostly to do with their issue with over-commercialisation and the idea that the city is explicitly endorsing certain products, behaviours, services, and corporations through naming stations after corporations, they also pointed out a fact that we have seen before:

As you know, attempts to sell naming-rights to T stations have not been successful in the past. Taken together, the lack of interest from corporations and the vehement opposition of citizens to these past plans should be enough to suggest that selling naming rights is still not the right direction for the MBTA. Not only does this plan compromise the public nature of transit services in the Boston area, it is also unlikely to alleviate the financial strain the MBTA is currently facing. In other cities, transit naming rights schemes have not yielded significant revenues. In Philadelphia, the recent deal between Southeastern Pennsylvania Transportation Authority and AT&T will yield $3 million over five years. In New York, a twenty year deal to rename a Metro Transit Authority station after Barclay’s will yield only $200,000 per year. Were the MBTA able to raise similar revenues from its planned naming rights sales, they would amount to a drop in the bucket when compared to the reported $150 million deficit the MBTA faces for fiscal year 2013. Moreover, private corporations stand to benefit from any revenues the Transit Authority is able raise; consulting firms in the aforementioned examples have taken significant cuts of sales revenues, as they will in Boston.

While we may need to pinch pennies and make every dollar count (which the old MTA CEO set out to do earlier this year), we need to decide if selling the names of our stations is worth the effort. Before we can make that assessment, we need to wait for IMG Worldwide to finish their assessment of the market; no doubt they will find tepid interest from corporations as has been the case in the past and for other systems.

What's In a Name? MBTA Sells Out Boston In Its Naming Rights Plan

The question is on the table again as the MBTA moves forward with its interest in selling naming rights as IMG Worldwide as been announced as the firm that will conduct a 'a thorough analysis to determine if there's a market for naming rights and what the value would be', according to Joe Pesaturo of the MBTA.

Boston is not unique in its operating budget issues, nor is it unique in some of its attempts to close the funding gap. About a year ago, Boston joined New York, Chicago, Philadelphia, Austin, Toronto, and New Jersey in the growing list of North American transit agencies trying desperately to close operating gaps with a funding concept that is an illusion and hardly effective for actually raising the revenues that agencies claim.

To bring it home, one of my followers on Twitter brought to my attention a sponsorship from 1997 to 2000 by Citizens Bank to rename State on the Blue and Orange Lines to State/Citizens Bank. The sponsorship eventually failed and the station's name was reverted.

Ben Kabak in New York has written numerous posts on the issue (in the numerous links above), so I won't bother rehashing a topic. I will however highlight one particular public-private partnership that Chicago capitalised on, which was the $4 million rehab of the North/Claybourn station, all paid for by Apple. If we're going to be selling the system to private entities, why not work with them to refurbish the system or even build out revenue-generating properties without selling the property or rights to profits (Chicago lost $11 billion from a poor leasing agreement of its parking meters to Morgan Stanley)?

While we shouldn't necessarily be relying on commercial entities to be paying for and completely refurbishing our public infrastructure just so they can use them as their own vehicles for advertising, public transport is in an ailing state. Budgets are tight and will continue to get tighter until the costs (of construction and maintenance) are reined in and publicly owned property can be made more profitable.

Of the latter, these public-private partnerships could be used to capitalise on unproductive, low revenue-generating properties owned by the state, such as station head houses, rights of way, and station platforms themselves. Looking at just Porter Square, why is the Shaw's located so far away from the public transport hub that likely brings in the majority of its business from commuters picking up their groceries on their commutes home? Why is there not a passage under Somerville Ave to connect to a basement level of CVS or another business and provide a safer crossing of the major boulevard? This is the ultimate form of not only transit-oriented development, but also leveraging MBTA property as convenient and profitable real-estate to developers. We may be far from Japan's platform-side malls and ramen shops, but it's high time the MBTA start pushing its property and really engaging with developers and private entities to serve the public more directly.

I'd rather be able to grab a fresh bowl of ramen and groceries conveniently on my commute home than ride through Apple/Copley Square or Macy's/Downtown Crossing, especially if I know that one initiative is more likely to keep the trains running, the lights on, and the buses well-maintained.