Although I wasn’t a supporter of re-naming a section of First Street to Ikea Way, the City Council did indeed agree with the idea and passed this in February. Sharon Springer originally sent this OpEd to The Burbank Leader and we’ve been in a mini-debate about it’s merits via email today. I think it’s worth posting here to continue the conversation. Please let us know what you think by voting in the poll below and in the comments.
– David Spell
On Tuesday, February 9th, city council gave Ikea the street naming rights to First Street between Santa Anita and Angeleno Avenue. The street will be renamed Ikea Way. Streets are a tax payer funded city asset and ordinarily, naming rights are sold and not given away. The exception is to rename a street in honorarium after a beloved community member. The initial renaming idea, which is a good one, in theory, is credited to a member of the Traffic Commission. However, we, the tax payers should have been duly and fairly compensated for it per regular practice in municipalities throughout the nation. For city council and other city representatives to dismiss this concept without any due diligence, and to not consider it for capricious reasons is not a healthy representation of reasonable and well-informed leadership.
Renaming to Ikea Way would allow Burbank to seek California Department of Transportation signs along the freeway. The desired, (but not guaranteed) result would be to direct freeway traffic to exit at Olive, Verdugo and Ikea Way (presently, First Street) instead of Alameda, and keep traffic off the S. San Fernando corridor. The benefit to Ikea is valuable exposure and advertising along several miles of one of the busiest freeways in the world along with brand advertising and communications along hundreds of feet of commercial frontage, not to mention ancillary brand advertising on maps, GPS apps, and other platforms and channels.
Selling naming rights for tax payer funded assets is not a new practice and provides significant compensation to the municipality providing that considerable right. It would make a lot of s ense for Burbank, a slow growth city facing a deficit. Naming rights can be extremely valuable and components such as streets, parks, convention centers, bike routes, and bridges are assets. We should consider responsibly and reasonably leveraging the naming rights to generate revenue/benefits for our residents. We certainly shouldn’t just give them away, because we can’t be bothered to responsibly explore the possible pros and cons to such a plan! Other entities use sponsorship specific guidelines that provide a way for these types of transactions to take place. For example, there is a pending deal in Ohio that is very similar to the Ikea Way scenario: A corporation is purchasing the naming rights for an access route to their business, located at a freeway off ramp. The results are a freeway exit sign named for the corporation, and a 30 year $3.8 million dollar revenue stream for the State of Ohio.
Another example of selling naming rights involves UC San Diego Health paying $37 million over 30 years to the San Diego Metropolitan Transit System (MTS) to rename the San Diego MTS Blue Line to the UC San Diego Blue Line. It’s a partnership that enhances the UC San Diego Health brand throughout the city and results in a reliable revenue stream to MTS and the funding of much needed transit. (http://www.sdmts.com/inside-mts/news-release/new-blue-metropolitan-transit-system-trolley-line-be-renamed-uc-san-diego)
Just this week, the City of Milwaukee closed a small cell technology deal with Verizon that equates to about $3.5 million over 35 years. Sharon Robinson, Administration Director for Milwaukee indicated that other businesses want to work with them and those deals will generate even more money. The following is from Sharon Robinson Administration Director with the City of Milwaukee: “The City of Milwaukee has inventoried city assets with the goal of leveraging these assets to create marketing partnerships between the City and private sector businesses and nonprofit organizations in areas including advertising, naming rights, sponsorships and in-kind contributions. Forming these partnerships holds the promise of generating millions of dollars in new revenue to support City of Milwaukee programs and services. Milwaukee is limited in its revenue generating options. Over the years, there have been fluctuations in State revenues and there are no local sales or income tax. Alternative revenue sources, like this, are needed to generate revenues, maintain high quality services and minimize tax and fee increases.”
City council’s reasons for giving the IKEA naming rights away were as follows: It was apparently Burbank’s idea to rename First Street, not Ikea’s; it will benefit Burbank in that it will better direct traffic to the Ikea store and hopefully, keep traffic off Alameda and S. San Fernando; selling the rights will set a precedent and we might get stuck with an entity that wants an offensive street name. No precedent is set that cannot be fairly contextualized. The enormous yellow sign on the IKEA building, signaling the store’s location, does a great job of directing customer traffic to the store. Should the City pay for that as well? All these issues are taken care of through negotiation and agreement so that the result is beneficial to both the taxpayers and the corporate partner. Agreements are written to exclude names that promote tobacco products or pornography, are improperly suggestive, or denigrate groups based on gender, religion, and race, among whatever other criteria are sought.
Burbank can use the significant amounts of money that naming rights partnerships can generate and could at least partially replace funds that previously came from Redevelopment Agencies. There is a great need for a development plan for S. San Fernando Boulevard between Alameda and Verdugo. This is a pedestrian corridor used by our highly vulnerable pedestrian population: the elderly, disabled, school children, young families and moms pushing strollers. Even if the Ikea Way street renaming successfully diverts the largest part of the freeway traffic to First Street and away from the San Fernando corridor, Ikea traffic from Glendale and Burbank may find the S. San Fernando corridor the most convenient access. Also, the corridor will continue to redevelop with the draw of Ikea as an anchor. Revenue from the Ikea Way street renaming could fund a plan and maybe all the necessary improvements to transform this into an attractive area of our city, safe for residents and shoppers alike, and possibly generating even more revenue for our city.