Title
Amend City Contract 131850-MPA with Jefferson Street Signage District, LLC (Ordinance S-48705)
Description
Request to authorize the City Manager or his designee to amend the Management and Promotion Agreement, City Contract No. 131850-MPA (MPA), to modify definitions of Gross Revenue to exclude infrastructure costs of new signage in the Legends Entertainment District. All other terms of the MPA will remain. There is no expense impact as a result of this action.
Report
Summary
In 2011, The City of Phoenix entered into the MPA with the Jefferson Street Signage District, LLC, dba Legends Entertainment District (Legends). This contract granted Legends rights to install signs of various types at specific identified locations in an area generally between Jefferson Street and Washington Street, and between 1st Street and 7th Street. In exchange for the right to place signage on certain City buildings and for an initial investment of $2 Million for installation of the original infrastructure, the City receives Minimum Annual Guaranteed payments that total the greater of $350,000 per year or fifteen percent of the gross revenues. In addition to the payments, the City also is granted access to unsold signage assets.
In 2018, the Jefferson Street Master Sign Plan was expanded with the addition of Block 23, and then expanded again in 2021 with the addition of the Adeline apartment building creating new opportunities for signage within the district. Legends partners Phoenix Block 23, LLC. and Phoenix 24 Jefferson street Investors, LLC. have invested in the construction of new sign infrastructure and the revenue from the new signs will initially be used to recoup these costs. A total of six (6) signs have been installed between the two buildings. The structure of the MPA would require Legends to pay the City a portion of the revenue from the new signs that is dedicated to paying off the initial investment. Once infrastructure costs have been recovered, revenue from the new signs will be considered Gross Revenue, with fifteen percent paid to the City.
Financial Impact
Once construction and installation costs of the new signs are recouped by revenue generated by the signs, the City will receive fifteen percent of the gross revenues for the new signs. There is no expense impact as a result of this action.
Concurrence/Previous City Council Action
The City Council approved Ordinance S-37850 on May 18th, 2011.
Location
Generally between Jefferson Street and Washington Street, and between 1st Street and 7th Street.
Council District: 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Managers Ginger Spencer and Inger Erickson, and the Community and Economic Development and Phoenix Convention Center Departments.