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La Palma Chooses Cash Deposits for Digital Displays

 

Could digital advertising signs like this one be heading to La Palma?

Could digital advertising signs like this one be heading to La Palma?

By Rico Dizon

After a long status quo, the La Palma City Council finally approved the offer of a $50,000 deposit over a reimbursement option, from La Palma Sign Partners, LLC, to advance the a Digital Billboard Display.

The concept and proposal came with the recommendation of  La Palma Community Development Director Douglas Dumhart.

The recent City Council action virtually carried the decision of selecting La Palma Sign Partners, a consortium established specifically for the project, over the other company Clear Channel Outdoors, a top leader in the outdoor advertising industry.

During the discussion, Councilman Peter Kim brought up the opinion that since the consortium is new nothing is written about its experience. He asked Dumhart if he is that confident and the latter replied, “Yes, as each of them has their own expertise in various fields including outdoor advertising.” Mayor Steve Hwangbo added, “No matter how big and well experienced are some companies, we have seen them failed and messed up.”

During its Oct. 1 regular meeting the City Council voted 3-2 with “no” votes from Council Members Kim and Gerard Goedhart. City Manager Ellen Volmert executed the Deposit/Reimbursement Agreement later in the day. Right after the voting, Goedhart said, “Actually I am all for the motion and I fully support LPSP’s concept, I just have little reservations on the representations. “So, that’s fine and I am happy with the results.”

Mayor Hwangbo smilingly noted, “It is for the good of the City that no amount will have to be taken from the General Fund as this project is not in the budget for the current fiscal year.”

This gave the green light for LPSP to move forward and implement the initial stages of its Digital Sign Concept including the ocular inspection of finding the suitable sites for the displays along the 91 freeway and securement of necessary permits among them is Caltrans’s go-signal.

For the City of La Palma this would mean a spring of guaranteed fresh revenues every year at $240,000 for the first year for 2 billboards and with an estimated gross of $12.1 million within a 30-year period. With the city free from a binding commitment, LPSP admitted of taking a “big risk” on this undertaking.

For its part, the City will have to amend the current Municipal Code on the Prohibition of Digital Signs in the city.

Dumhart is confident that the project is a very worthy undertaking as “the strength of the city lies in its being in the center of a major marketplace bounded by LA, OC and Riverside counties where through its 2,800 linear feet corridor well-know product brands vie for advertising exposure”.  He added, “it is during these times that the city needs all the new and diversified sources of revenues it can get especially with the pull out last year of BP/Arco. “The proposed two signs are slightly more than the equivalent of 436 residential properties that generate about $218,000 in property taxes.”

On its Sept. 3 meeting, the City Council discussed two proposals, one from LPSP the other from Clear Channel Outdoors. On June 4, 2013, LPSP proposed to help facilitate the construction and implementation of a La Palma Digital Billboard Project with the goal of bringing the project on-line and a new revenue stream to the City by the start of next fiscal year.

The company will add the necessary expertise to secure future sites for two units, to assist with processing of municipal code, and environmental compliance documents, to secure Caltrans ’permit, to finance, construct and furnish digital display structures, and to bid out and manage the digital display billboard (s) to outdoor advertising companies. LPSP has indicated its willingness to move quickly to secure ideal sites either advance a cash deposit or reimburse city for costs incurred during processing, and commit to a guaranteed amount payment stream with cost of living adjustment (COLA).

They proposed a 30-year term with an initial fixed lump sum payment that is adjusted by an inflation factor that would net slightly more than $6 million in new revenue for the city.

If a second billboard can be secured, the amount doubles to approximately $12.1 million.

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One Response to La Palma Chooses Cash Deposits for Digital Displays

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