San Mateo is considering new advertisement programs for city-owned land — including billboard ads, naming rights and ads on buildings — to increase revenue.

While the city is encouraged about the potential revenue increase, the plan is in the preliminary phase. The City Council directed staff at its Nov. 16 special meeting to develop options for advertisement programs and how the city can successfully implement the program. The issue is a priority for the council since it asked staff for more information in 2018. However, it could be several months before the council gets further recommendations from staff, according to San Mateo Deputy Mayor Eric Rodriguez.

San Mateo Mayor Joe Goethals said he wanted more details from staff about advertising revenue options before making any decisions. He is hopeful the council could consider an ordinance on some form of advertisement program next year.

“I don’t think we are going to get to the bottom of this tonight, and it’s very likely something that we should talk about again at our January goal-setting session,” Goethals said Monday.

Rodriguez said he was open to advertisement revenue as long as the city did it right. He wants to ensure billboards don’t ruin the city’s visual appeal, are only in certain areas and residents and neighborhoods aren’t bothered.

City Attorney Shawn Mason said the city also has to consider potential legal challenges on billboard advertisements. He cited concerns about possible federal antitrust laws and First Amendment lawsuits from the public. Mason said billboard advertisement issues are being litigated in a federal court in Texas. He recommended the council wait until the case is decided in Texas before making any final decisions on billboard advertisements.

Councilwoman Amourence Lee said billboard advertisements are possible, as long as the city protects the historic downtown and residential areas.

“We are asking staff to make very hard cuts and freezing salaries, and we are looking at serious revenue shortfalls, and this is a very real passive revenue opportunity that I don’t think we should leave on the table,” she said.

While there are no specific numbers on potential revenue, the city is hopeful the advertisement programs will help with funding, particularly with the pandemic hurting San Mateo. Advertisers would provide a portion of their revenue to San Mateo in exchange for advertising on public buildings. Companies would be charged for billboards, with restrictions on size and spacing throughout the city. San Mateo took inspiration for its potential program from the San Carlos billboard program, which allows them on property the city owns or leases. San Carlos raises revenue through leases with billboard companies.

Advertising, naming rights

Another option is advertising or naming rights on buildings in the city. San Mateo would have to change the municipal code to allow advertisements on buildings. There would also be potential First Amendment challenges. Naming rights would be more straightforward for the city to incorporate.

Lee said they needed to aggressively look at all potential revenue, including advertisements on buildings.

“I don’t want to shut the door on any of these opportunities. I would err on the side of a broad and deep look at all the possibilities so we can make some well-thought-out community-based decisions,” Lee said.

City-owned parking lots

The city is also leaning toward keeping two downtown parking lots instead of selling them to private ownership. The two parking lots are the Talbot’s lot at Fourth and Railroad avenues and the Ravioli House lot between Fifth and Sixth avenues. The council hasn’t made a final decision but said Monday it made the most financial sense to keep the two parking lots. Real estate developers have recently expressed interest in the parking lots for purchase. If the city sold the land, it would have to share the land sale proceeds with other taxing entities like the county and school districts and would only receive 34% of any sales price or lease revenue.

Rodriguez said the council’s preference is to hang on to its land and lease it out. He said there was no deadline on the offers, and he saw no need to rush through the process.

“I really feel that once we get rid of this land, there’s no chance of us getting anything like it again, especially in our downtown. We just need to proceed with extreme caution,” Rodriguez said.

Goethals said while surface parking lots were not the best use of the city’s property, he wanted the city to keep its property now and in the future.

“I agree with all my fellow councilmembers that we want to retain it in terms of ownership in perpetuity, but we want to perhaps get more use out of it right now,” Goethals said.

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