| | | | | | | | | Resolutions - C7 AE
COMMISSION MEMORANDUM |
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| | | | | | | | TO: | Honorable Mayor and Members of the City Commission | | FROM: | Raul J. Aguila, Interim City Manager | | DATE: | March 17, 2021 | | |
| SUBJECT: | A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO INVITATION TO NEGOTIATE NO. 2020-239-KB, REVENUE SHARING AGREEMENT FOR THE CONSTRUCTION, OPERATION, AND MAINTENANCE OF BUS SHELTERS AND OTHER STREET FURNITURE; AND AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH OUTFRONT MEDIA, AS THE SOLE PROPOSER; PROVIDED, HOWEVER, THAT: 1) THE FINAL NEGOTIATED AGREEMENT SHALL BE SUBJECT TO THE PRIOR APPROVAL OF THE CITY COMMISSION; AND 2) IF THE CITY COMMISSION APPROVES THE AGREEMENT, THE PROPOSED BUS SHELTER DESIGN SHALL ALSO BE SUBJECT TO THE PRIOR APPROVAL OF THE CITY COMMISSION. |
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| | | | | | | | RECOMMENDATION
| The Administration recommends that the Mayor and City Commission approve the Resolution accepting the City Manager's recommendation to enter into negotiations with the sole bidder, and authorizing the Administration to bring the final negotiated agreement and, subsequently, the bus shelter design, back to the City Commission for consideration.
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| | | | | | | | BACKGROUND/HISTORY
| In October 2001, the City and Clear Channel executed an agreement for Clear Channel to construct, operate, and maintain the current bus shelter structures on the public rights-of-ways throughout the City (the Agreement). The Agreement resulted in the bus shelters currently installed on City right of ways and provided for commercial static advertising on the bus shelters with an escalating revenue sharing agreement with the City. Over the last three years, the City has received an annual average of $644,000 from Clear Channel, comprised of $260,000 in minimum annual guarantee, plus 30% from the net revenue share.
Five amendments to the Agreement were approved by the City Commission to-date. Most significantly, Amendment No. 5, executed in October 2020, established an Agreement termination date of September 30, 2021, and enabled for transfer of ownership of bus shelters from Clear Channel to the City (upon expiration or termination of the Agreement). Additionally, Amendment No. 5 reduced the minimum annual guarantee by 50% (to $130,000); and increased revenue share from 30% to 50%; as a result of financial impact to Clear Channel due to the COVID-19 pandemic.
Given that the current bus shelters were installed in 2001; are in need of significant maintenance; and the City Commission expressed a desire to update the current design, at its December 9, 2015 meeting, the City Commission referred an item to the Finance and Citywide Projects Committee (the Committee) for a discussion on updating the design of the existing bus shelters, for an iconic design and amenities/enhancements that could help promote transit.
On January 22, 2016, the Committee considered the issue. The Administration had originally recommended issuing a single solicitation for the design, construction, operation and maintenance of new bus shelters. However, because the Committee considered the iconic design of the new bus shelters to be of primary importance, it recommended issuing only a solicitation to engage a firm to come up with a design, with a solicitation for the construction operation and maintenance to be issued at a later time.
At its March 9, 2016 meeting, the City Commission adopted Resolution No. 2016-29325, accepting the recommendation of the Committee to issue a solicitation for the design of new bus shelters. The Resolution also authorized the City Manager to extend the existing Agreement on a month-to-month basis until such time as the City could execute an agreement with a firm to construct the newly designed bus shelters.
On April 13, 2016, the City Commission approved the issuance of Request for Qualifications (RFQ) No. 2016-116-KB for Architectural and Engineering Design Criteria Professional Services for New Bus Shelters. The RFQ process resulted in the selection of ACAI Associates, Inc., whose team included the premier design firm of Pininfarina. The City executed a contract with ACAI Associates, Inc. (with Pininfarina as sub-consultant to ACAI) for new bus shelter designs on July 19, 2017, and the design effort commenced on October 4, 2017. The resulting bus shelter design developed by the ACAI/Pininfarina team incorporated features enhancing passengers' transit experience, including innovative designs and technology, and enabled for installation of bus shelters at more bus stops; particularly at locations in constrained rights-of-way. The ACAI/Pininfarina bus shelter design was approved by the City Commission, Design Review Board (DRB), and Historic Preservation Board (HPB).
Following approval of the ACAI/Pininfarina bus shelter design, on August 7, 2019, the City issued RFP No. 2019-306-KB for the construction, operation, and maintenance of the new bus shelter design. The RFP required proposers to submit proposals based on the approved ACAI/Pininfarina bus shelter design. The successful proposer would bear all costs associated with construction, operation, and maintenance of the bus shelters, and provide revenue to the City based on advertising proceeds. No responses to the RFP were received. The primary reason some proposers cited for declining to submit a proposal was the high manufacturing/construction cost of the ACAI/Pininfarina design.
Staff also held meetings with a number of firms in the bus shelter industry to better understand any design-related concerns, or other impediments, which may have resulted in the City not receiving any responses to the RFP. The issue of the high cost of the ACAI/Pininfarina design was, once again, the primary concern expressed. Based on industry feedback, City staff worked with the ACAI/Pininfarina team to consider ways to reduce the construction cost of the approved bus shelter design. As a result, the ACAI/Pininfarina design was amended to include a number of revisions that could reduce manufacturing costs without impacting the design. |
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| | | | | | | | ANALYSIS
| Based on industry feedback, the Administration determined that issuing a new solicitation that provided flexibility for prospective bidders to bid on the ACAI/Pininfarina design, or suggest an alternative bus shelter design, would be in the best interest of the City.
On September 16, 2020, the Mayor and City Commission authorized the issuance of Invitation to Negotiate (ITN) 2020-239-KB for Revenue Sharing Agreement for the Design, Construction, Operation, and Maintenance of Bus Shelters and Other Street Furniture. On October 21, 2020, the ITN was issued. The ITN also included stand-alone digital Estimated Time of Arrival (ETA) signs, and the sale of bus shelter advertising space, with the goal of negotiating an agreement that resulted in new and improved bus shelters and revenue to the City. The ITN allowed bidders to bid on the ACAI/Pininfarina design or suggest an alternative bus shelter design, with all costs related to design, construction, and installation of the bus shelters and other street furniture to be the responsibility of the successful bidder.
A voluntary pre-proposal conference to provide information to prospective bidders was held on November 4, 2020. Five (5) addenda were issued. The Department issued bid notes to approximately 10,000 companies utilizing www.bidsync.com website. 92 prospective bidders accessed the advertised solicitation. ITN responses were due and received on January 7, 2021. The City received one (1) proposal from OUTFRONT Media Group, LLC (OUTFRONT).
On February 16, 2021, the City Manager appointed the Evaluation Committee via LTC # 071-2021. The Evaluation Committee convened on February 25, 2021, to consider proposals received. The Committee was comprised of Tonya Daniels, Director of Marketing & Communications; Rogelio Madan, Chief of Community Planning & Sustainability, Planning Department; Milos Majstorovic, Transportation Manager, Transportation and Mobility Department; Nelson Perez-Jacome, City Engineer, Public Works Department; and Frank Quintana, Deputy Chief Information Officer, Information Technology.
The Committee was provided an overview of the project, information relative to the City's Cone of Silence Ordinance and the Government Sunshine Law. The Committee was also provided with general information on the scope of services and a copy of the proposal. The Committee was instructed to score and rank the proposal pursuant to the evaluation criteria established in the ITN. Attachment “A” to this Commission Memorandum includes the scoring of the sole proposal submitted by OUTFRONT. All Committee members scored the OUTFRONT proposal with an average score of 93 points.
The Administration finds that although OUTFRONT is not proposing to construct the ACAI/Pininfarina bus shelter design (NOTE: proposal of an alternative design was permitted under the ITN), it has demonstrated a commitment to work with the City to refine an alternative bus shelter design that respects the City's original design intent with the prior selection of the ACAI/Pinifarina design.
From a process standpoint, once the City Commission approves and executes a final agreement with OUTFRONT, OUTFRONT will begin developing the new bus shelter design in close coordination with the City. The new bus shelter design will be presented to the City Commission for review and approval. If the bus shelter design is approved by the City Commission, OUTFRONT will seek DRB and HPB approvals. After securing all City approvals, OUTFRONT will commence manufacturing and deployment of new bus shelters throughout the City in accordance with the executed agreement.
Some of the key elements of the OUTFRONT proposal include the following:
- installation of up to 200 bus shelters (almost double the number of existing bus shelters) and technology components such as ETA signs at each bus shelter
- digital and static advertisements at bus shelters
- design, construction, operation, and maintenance of new bus shelters would be at no cost to the City
- provides for a high level of maintenance of bus shelters
- allocation of static and digital advertising space for the City's use, and the ability for the City to access 100% of all digital inventory in case of public emergency
- over a twenty (20) year initial contract term with one, five (5) year optional renewal period, OUTFRONT is proposing a minimum annual guarantee of $96,000/year, plus escalating annual revenue share from gross advertising revenue from $300,000 in year 1 to $3.8 million in year 25 of the agreement. The agreement could potentially result in over $56 million in revenue to the City over the contract term
A summary of the sole proposing firm follows:
OUTFRONT Media Group, LLC
OUTFRONT, with 2019 annual revenues in excess of $1.78 billion, is the country's largest out-of-home media company and currently operates in 44 US markets and throughout Canada. It is the largest provider of transit advertising services in the United States – 45 current transit agency and municipal contracts across which we generated over half a billion dollars in transit advertising revenue in 2019.
OUTFRONT Media Inc is a publicly traded company listed on the New York Stock Exchange under the symbol OUT. It is fully prepared to utilize its robust balance sheet, positive cash flows and access to capital markets to support all aspects of its proposal including the annual guarantees described therein. OUTFRONT is proud of its long history in the out-of-home media business citing that it has never failed to meet any of its contractual obligations and has never defaulted on any municipal or transit agency contract.
OUTFRONT's roots in transit advertising date back 83 years to 1938 when it was first incorporated as Transportation Displays Incorporated and began providing advertising services to Long Island Rail Road, then a subsidiary of the Pennsylvania Railroad. Its team of 36 employees in the Miami area was established in 2002 and has consistently been one of the top performing market teams in North America, delivering consistent revenue growth and exceptional results in service of our existing regional municipal and transit advertising contracts.
Today, OUTFRONT represents a wide array of municipalities and transit agencies including New York City Transit, Long Island Rail Road, Metro-North Railroad, Massachusetts Bay Transportation Authority, Washington Metropolitan Area Transit Authority, Metropolitan Atlanta Rapid Transit Authority, Bay Area Rapid Transit, Los Angeles County Metropolitan Transportation Authority, Orange County Transportation Authority, CalTrain and Santa Clara County's Valley Transportation Authority, among others.
Regionally, OUTFRONT also represents the City of Miami Beach Trolleys, Miami-Dade County Transit, Miami-Dade County Bus Shelters, City of Miami Trolleys, City of Miami Bus Shelters, Palm Tran Bus Shelters, and Brightline. |
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| | | | | | | | SUPPORTING SURVEY DATA
| According to a 2019 Community Satisfaction Survey conducted by ETC Institute, 74% of respondents are satisfied with the City of Miami Beach Trolley System and 59% are satisfied with the Miami-Dade County bus service. Furthermore, 24% of survey respondents highlighted bus stop amenities as a factor of dissatisfaction with the trolley service. This project will improve the safety, convenience, and image of the City’s bus stop amenities and as a result, increase the residents’ quality of life and satisfaction with transportation services offered in the City of Miami Beach. |
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| | | | | | | | CONCLUSION
| The existing bus shelters throughout the City were installed by Clear Channel almost twenty years ago, and are in desperate need of upgrading. The existing contract with Clear Channel will expire no later than September 30, 2021.
After reviewing the sole proposal received by the City, OUTFRONT's qualifications, and having considered the Evaluation Committee's scoring and commentary, I concur with the Evaluation Committee and find that OUTFRONT is a responsive, responsible proposer which has the qualifications to undertake the work under the ITN.
Some of the highlights of the firm's experience, qualifications, approach, and methodology to project delivery include:
- OUTFRONT has a highly qualified project team with bus shelter operations in Miami-Dade County and City of Miami and numerous years of experience with bus shelter operation and maintenance.
- OUTFRONT presents a robust approach and methodology to construction, maintenance, and advertising, which includes digital advertising.
- Preliminary revenue share is significantly higher than in the current Agreement with Clear Channel (potentially over $56 million in revenue to the City over the contract term not including additional revenue opportunities).
For the reasons stated herein, I recommend that the Mayor and City Commission approve the Resolution authorizing the Administration to enter into negotiations with OUTFRONT Media Group, LLC as the sole proposer; provided, however, that the final negotiated agreement and, subsequently, the bus shelter design, shall both be subject to the prior approval of the Mayor and City Commission. |
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| | | | | | | | Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? | | Does this item utilize G.O. Bond Funds? | | Yes | | No | |
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| | | | | | | | Strategic Connection
| Mobility - Increase multi-modal mobility citywide and connectivity regionally. |
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| | | | | | | | Legislative Tracking Transportation/Procurement |
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