Thursday, October 9, 2014

Boydston vs. Kellar at The Signal's Measure S Debate/Forum/Event

Councilmember Bob Kellar wasn't smiling for long once the debate got underway.
Tonight, The Signal hosted a debate on Measure S, which, if approved, gives the go-ahead for installing large digital billboards along freeways in exchange for removing some conventional billboards in town. Amidst the tired talking points and middling moderation, some surprising information emerged. A major revelation was that the billboard deal was being formulated for years behind closed doors--back to the Pulskamp era, according to Councilmembers Bob Kellar and TimBen Boydston. Another was the presentation of what might be deemed the Boydston Plan, which radically suggests both Allvision and LA Metro are effectively middlemen that can be cut out of billboard negotiations. Boydston went after many perceived flaws in the billboard deal, leaving Kellar to play defense for the majority of the night. Below are some observations.


The debate took place for a little over an hour with a short break in the middle. Councilmember Kellar spoke in favor of Measure S, and Councilmember Boydston spoke against it. There were opening and closing statements, and moderator Jason Schaff helped direct the conversation with questions. He was rather informal, telling Bob Kellar “You should!” when Kellar said he’d take advantage of discounted advertising prices for the digital billboards to promote his real estate business. He also called current billboards some colloquial pejorative (scummy? I can’t remember the exact word), asking if anyone really liked them. He didn't seem to be playing favorites, though, as he asked some probing questions of both men. The debate definitely went more in-depth into the nature of the Allvision deal at the cost of breadth. “Is it a good deal?” was the fundamental question of the night, perhaps rightly so.

Bob Kellar often referred to and read from written statements. When speaking freely, he tended to make appeals to authority. To paraphrase, Santa Clarita has great people working for it and a legacy of fiscal responsibility, so it ought to be trusted to handle billboard negotiations and implementation in the community’s best interest. TimBen Boydston spoke much less from the script and had more control over the conversation. His style was more pragmatic, asking Claritans to think about the numbers and terms and conditions rather than trust in the institution of the City of Santa Clarita.

Billboard Plans Began in 2010?

Jason Schaff asked Bob Kellar why so many of the deal’s negotiations had gone on behind closed doors and how long discussions had been taking place. Kellar said that Allvision and Metro were in discussions back in April 2010, though it's not clear how involved the City was at that point. Boydston confirmed his understanding that much of the deal had been hammered out by former City Manager Ken Pulskamp and former Director of Community Development Paul Brotzman. Both of those men retired in 2012. In short, there were at least a couple years of work on the billboard deal before the public got wind of any of it. While Kellar said this was normal and proper for a discussion of this nature, Boydston said he had asked City Attorney Joe Montes if the negotiations could have been more public, and Montes said that would indeed have been legal.

The revelation definitely played to the advantage of the No on S crowd. There was a hushed but audible gasp audience-wide when Kellar dropped the 2010 “start date,” and such lengthy closed-door discussions did not manage to yield an airtight, criticism-proof contract.

A Bird in the Hand vs. A Line of Applicants
or, The Boydston Plan Emerges

The vast majority of this evening was spent talking about whether Measure S was the best deal Santa Clarita could get.  Boydston called it terrible, Kellar called it great.

The Kellar argument was that the real goal of any negotiations was getting billboards taken down, and indeed, more billboards go down than go up with Measure S (whether they are equivalent in nature was an unanswered question). He said any revenue was better than the $0 the City currently receives from conventional billboards. His central metaphor was of the deal as a bird in the hand. It’s one we can take to the bank today, and who knows if we’d do as well if things went back to the negotiation stage? Kellar generally shied away from specifics, but he said the 65% share of net revenue likely represented 28-29% of gross revenue, a decent percentage comparable to what other cities receive. Further, he claimed that estimates suggesting $500K-$1M in annual revenue weren’t “phony baloney” but based on revenue generated in other installations. Nonetheless, Kellar admitted there were no guarantees of any net revenue. He said by the same token, there were no guarantees the roof of The Signal’s creekside home wouldn’t come crashing down at any moment.

Boydston asked Claritans to envision a better deal. While Metro owns the land on which the billboards are leased, CBS and Clear Channel own and operate the billboards. They were not involved in the negotiations, but ought to have been. A deal involving Santa Clarita and these companies would mean splitting revenue two ways, not among several parties, and could mean tens of millions of extra dollars would go to the people of Santa Clarita rather than middlemen. Kellar insisted that Clear Channel knew about the deal, despite Schaff presenting an official letter that indicated otherwise. Kellar said Clear Channel should have taken the responsibility to draw up their own proposal and present it to Santa Clarita. Boydston found this suggestion ridiculous as the City had issued no request for proposals. Boydston continued with his assertion that Allvision and Metro didn't need to be involved in billboard removal efforts or contracts, pushing for a simpler, more profitable contract.
Boydston countered Kellar's bird-in-the-hand argument next. Companies seem to think hundreds of millions of advertising dollars are up for grabs in an SCV billboard deal. Therefore, he has no doubts that if we kill the present deal (or let the bird in the hand go, to use Kellar's metaphor), we'll have many more deals to consider thereafter (or a handful of birds).

The Second Deal vs. The Universal Deal

There will be 25 conventional billboards left even if Measure S passes. This includes one billboard presently advertising for a gentlemen’s club (Kellar and Boydston are both opposed to it, for whatever reason). Kellar, whose ideas of the proper role of CBS and Clear Channel varied throughout the night, said he hoped they or others might approach the City with a second deal after this first one passes that will result in the removal of all remaining boards.

Boydston rejected hopes for a second deal, instead arguing that remaining billboards skyrocket in value after the removal of others (supply and demand), so the present deal must be scrapped and a universal billboard agreement reached in its place. This round, too, seemed to go Boydston's way, as there was disapproving murmuring in the crowd when Kellar said he hoped another deal would be made.

Other Bits

*Boydston reminded viewers that the land which would accommodate a digital billboard near Elsmere Canyon had been purchased after building a homeless shelter there was proposed. The council at the time suggested the land was needed for trails and open space. Thus, if a billboard is built there, it means a potential homeless shelter site was effectively bought up to turn into an advertising venue instead.

*Kellar did not touch on the utility of billboards to public safety officials, a major talking point in the Yes on S literature. Again, he seemed to be playing more defense than offense. He did manage to get in a disclaimer that the electronic billboards would not be Vegas-type billboards.

*Kellar estimated 5 years to amortize costs associated with the Measure S deal. After this period, the City could expect to receive net revenue, though again, it would not be guaranteed.

*The cost to advertise on digital billboards will be markedly reduced for local businesses in the first two years of operation, but after that it goes to market rates. These could prove extremely costly for small local businesses ($8000 monthly rates on digital billboards was one figure thrown out but not officially accepted/rejected).

*Audience questions were not well integrated into the debate or forum or whatever you want to call it, and there were no direct questions at all.

The Crowd

Only 15 subscribers were allowed to attend with one guest each. No one off the list got in. Schaff sheepishly thanked attendees for subscribing to The Signal at the start and end of the event, and mugs commemorating The Signal’s February 6th, 2014 candidate forum were available for free. (I snagged two.) Many instantly recognizable community names were present: Braly, Mercado-Fortine, Sohikian, McLean, Ferdman, Newhall. Most everyone was civil and well-behaved. Lila Littlejohn did give Steve Petzold a note requesting that he put his shoes back on after briefly removing them (despite no offensive odor), but that was about it.
Reena Newhall introduces herself to Allvision lobbyist Arthur Sohikian with, "So you're the bad guy."

During the break and at the end of the meeting, however, things were more heated. Reena Newhall turned around in her seat, looked at Arthur Sohikian (lobbyist for Allvision) and said, “So you’re the bad guy.” Sohikian tried to laugh it off by saying he’d get an appropriate outfit from the Newhalls' costume shop, maybe the Joker, and Reena replied that she would be quite capable of costuming him…as a robber. Hunt Braly and Alan Ferdman exchanged words as well, and though I didn’t see the spat to its resolution, I daresay neither man changed his mind. The entire event was taped and will be made available to a much wider audience, though I’m not sure how many will watch.

The Last 100-or-so Closing Words of Each Spokesman

Kellar: “Look at the people and the entities that have come forward in support that I reiterate: The Chamber of Commerce, Valley Industrial Association, Board of Realtors, and a long list of people that are very accomplished. The people, ladies and gentlemen, are of the quality that have come together over the years that has made Santa Clarita the success it is. They’re the people that have [missed a couple words] not necessarily elected not necessarily working at city hall but people that are volunteers and care about this city, those are the people that are saying, "Yes on S." This is a good thing. Let’s keep this city moving forward and vote yes on S.”

Boydston: “Then they went out to have a referendum. They went out and got signatures: 18,000 signatures were collected then because people thought this was a lousy deal and they didn’t want it to go forward this way. So let’s not forget about the people when we talk about that, let’s not forget about the 18,000 people. Let’s not forget about the people that are out there right now, grassroots out there, that are telling their neighbors and they’re walking around and telling people that they need to vote no on Measure S. It’s a bad deal.”


Alan Ferdman said...

Thanks for your effort. I feel your commentary is a very comprehensive and fair write-up.

Carol Rock said...

Please correct the name of the outdoor advertising company from Clear Vision to Clear Channel. Thank you.

Anonymous said...

Santa Clarita is located in the midst of the movie business. Every actor, director and other big wheel in the movie business knows it's profoundly stupid to price one's services under a contract on the basis of "net" income or "net" profits. Remember how Art Buckwald got cheated when his book was turned into a wildly successful move, but he got nothing for assigning his copyright because he entered into a "net profits" deal.

So the deal negotiated by Santa Clarita's staff, starting with the two high level staff members mentioned in the essay above, stinks to high heaven of stupidity if not corruption. This is exactly why public input over a fairly long term is required: Because the city's negotiators can say to the contract party on the other side of the table: "They" meaning people like TimBen, Alan, Carol and others "Demand a percentage of gross income deal." "They" create leverage. "They" are not stupid. "They" prevent stupid or corrupt public officials from giving away the store. Like all smart people with leverage in the movie business do, "They" would demand a sure-bet cash flow if taxpayer-funds-purchased assets are used.

Stephen Petzold said...

Thanks for confirming that this deal stinks worse than my feet. The derogatory word used by Schaff was "grungy".