Attracting Retailers to Main Street...

Posted by dave in Taking Care of Business on October 31, 2007 | No Comments

I’ve written a lot about the things that the City and Main Street Kent are doing to expand the retail opportunities in downtown Kent. I think most everyone agrees that we need a broader mix of downtown retail, the question is how do you do get it. And honestly, there’s lots of different opinions on the how questions. But here’s one retail expert’s opinion on attracting and landing that elusive downtown retail. As you read it, I think you’ll see where we’re doing good and what we need to keep working on.

October 26th, 2007

Attracting Retailers to Main Street
by Bill Shelton, Retail Economic Development Blog

I have attended several municipality conferences the past month and one question that the public sector keeps asking is “How do we get retail to our downtown?” One thing’s for sure, it will take some dedication and some funds from the city to get any kind of traction with this issue. Here are a few things a city needs to think about to even get interest from retailers:

Update your streetscapes
Improve the sidewalks
More parking (including free parking!)
Clean up the existing store front facades

Are your local retailers open past 5 pm on the weekdays? Are they open on the weekends? How is the daytime population downtown? The bottom line is that retailers need customer density before they can consider any type of site location decision. If you don’t have customers downtown, what is your retail strategy to get them there?

Here’s an interesting article from the National Retail Federation website concerning retailers looking at Main Street locations. Retailers are always looking for new markets that have their specific customer density and to diversify their stores to be closer to their customers. You need to understand what customers you have in the downtown market before you ever start perusing them.

Retailers Returning to Main Street as Urban Storefronts Take on Greater Prominence

Washington, October 19, 2007—Though the majority of retail stores will continue to be located in malls, retailers are slowly moving back to Main Street to diversify their storefronts, according to findings from the 2007 NRF Retail Real Estate study conducted by AMR Research.

The study, which surveyed 43 retail real estate executives, found that retailers plan to have eleven percent of their stores in urban street-front locations by the end of year, compared with eight percent last year. To compensate, companies have cut back slightly on their number of mall and strip mall locations (44% this year vs. 48% last year). The survey also found that retailers are continuing to move toward lifestyle centers, with nine percent of company stores in that format compared with eight percent last year.

“Urban storefronts are beginning to play an increasingly important role in retailers’ real estate strategies,” said Carleen Kohut, NRF Chief Financial Officer and the manager of NRF’s Real Estate Executives Council. “Throughout the country, traditional main streets are being revitalized to include an assortment of new retail shops, from department and clothing stores to coffee shops.”

When determining the best location for a store, four out of five retail real estate executives say that demographic information is the most important. Half of respondents believe that other crucial factors include evaluating competitive information (51%), traffic patterns (49%), and geographic factors like the existing and future population (49%).

Though the real estate industry remains extremely competitive, complexity and extensive due diligence contribute to one-fourth of retailer respondents (24%) taking more than six months to sign a contract once a site has been approved. On average, retailers said they screen ten potential sites for each one that is approved. About one-third (36%) of stores are owned while the remainder (64%) are leased.

After a contract is signed, retailers said it takes an average of three to six months if the store is part of a remodel or new construction. A ground-up project often takes more than twice as long with the majority of retailers acknowledging that those projects often take more than twelve months. While many factors contribute to duration of construction, there is no denying the risk associated with not opening a site on time and on budget.

Because of the complexity of the real estate lifecycle, many retailers are shifting from homegrown software applications and simple desktop programs like Microsoft Excel to specific technologies that help them manage the process. According to the survey, the sale of software that manages real estate has experienced double-digit growth this year and nearly half of retailers (42%) now use these applications.

“Retailers dedicate a tremendous amount of resources to identify, and ultimately operate, their stores in prime locations,” said Rob Garf, Vice President and General Manager of Retail Strategies at AMR Research, Inc. “As retailers are faced with increasingly complex accounting procedures, competitive environments, and nationwide store management, they are turning to software as a solution to help them manage each stage of the real estate process more efficiently.”

The 2007 NRF Retail Real Estate study will be released in its entirety at NRF’s Annual Convention, January 13-16, 2008 in New York City.

AMR Research is the No. 1 advisory firm focused on supply chain, enterprise applications, and infrastructure. Founded in 1986, AMR Research provides advisory services and peer networking opportunities to supply chain and technology professionals in the manufacturing and retail sectors. www.amrresearch.com

The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2006 sales of $4.7 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com

2008 City Capital Improvement Plan...

Posted by dave in Services News on October 30, 2007 | No Comments

Yesterday I mentioned a storm sewer project begining on Overholt Road that would be impacting traffic this week. That project is a 2007 capital project, but it got me thinking that it might be a good time to list the 2008 Capital Plan that City Council approved last month. The City’s Capital Plan lists projects out 5 years, but to be honest, a lot can change between 2007 and 2012, so the most important year to look at is 2008. So here’s a look at what our new City Engineer will be working on in 2008.

2008 Capital Improvement Plan

Overholt Road Closed for Sewer Project...

Posted by dave in Services News on October 29, 2007 | No Comments

Kent’s Public Service Department will be starting a storm sewer project on Overholt Road this week which will require Overholt Road to be closed near the Mogadore Road Intersection from October 30th until November 1. So if you can, please try to avoid this area this week. The good news is this project will help take care of some localized flooding issues. And by the way, the City has a new City Engineer, Mr. Jim Bowling, that is managing Kent’s capital projects. Jim comes to us by way of Arcadis Engineering so he brings a strong client centered approach that I think will be a great addition to our staff.

NEWS RELEASE

October 26, 2007 CITY OF KENT OVERHOLT ROAD NEAR MOGADORE ROAD INTERSECTION

WILL BE CLOSED TUESDAY, OCTOBER 30, 2007 BEGINNING AT 7:00AM

THROUGH THURSDAY, NOVEMBER 1, 2007

OVERHOLT ROAD WILL BE CLOSED NEAR THE INTERSECTION OF MOGADORE ROAD TO ALLOW FOR STORM SEWER CONSTRUCTION. OVERHOLT ROAD WILL BE CLOSED TO THRU TRAFFIC. LOCAL ACCESS TRAFFIC WILL BE MAINTAINED AT THE CHERRY STREET/OVERHOLT ROAD INTERSECTION. MOTORISTS ARE ASKED TO AVOID THE AREA.

ROAD CLOSED SIGNS WILL BE POSTED.

FOR FURTHER INFORMATION, RESIDENTS MAY CONTACT THE DIVISION OF ENGINEERING AT (330) 678-8106.

City of Kent , Ohio

James Bowling, P.E.

Deputy Director of Public Service

The Horror is Back...

Posted by dave in General on October 26, 2007 | No Comments

I didn’t grow up in Kent, but I understand that there was a long standing tradition back in the 1970′s and 80′s of showing the Rocky Horror Picture Show at midnight. And like bell-bottoms, after taking an extended hiatus, the midnight showing of the Rocky Horror Picture Show is back at the Kent Stage this Saturday.

Here’s the Press Release from the Kent Stage:

An old tradition coming back

Rocky Horror Picture Show returns to Kent

The Midnight showing of The Rocky Horror Picture Show was a staple of entertainment in Kent in the 70′s and 80′s. After not being shown downtown for many years, this Saturday October 27 @ 8PM, 10PM, & Midnight, The Rocky Horror Picture Show returns to the movie theater in downtown Kent when the Kent Stage opens it’s doors for this Halloween treat. The original film will be presented on the same night as the Downtown Kent Halloween celebration. Tickets are $5.00 at the door. Doors open at 5PM. Costumes optional.

City Redevelopment Downtown...

Posted by dave in Taking Care of Business on October 26, 2007 | No Comments

In the next couple of weeks the City will be putting an Request For Qualifications (RFQ) out seeking a development partner to redevelop the downtown block bordered by Erie, Depeyster, Haymaker and Water Street (where the Hardware Store is located) in downtown Kent. Once we get a partner on-board we’ll start looking at what can be done in the block. With all the articles talking about the demise of malls, and the hot beds of university downtowns, we’re expecting a fair amount of interest in our solicitation. I suspect whatever developer we end up with will talk about LifeStyle Centers, so I’ve gone ahead and shared a copy of an article from a retail trade industry magazine (CoStar Advisor) that offers good insight into why Lifestyle Centers are so popular and what we might expect to be talking about in the next couple of months here in Kent.

Lifestyle Centers: Retail’s Hottest Trend

Smaller, Open-Air Format Demonstrating Strong Appeal Among Shoppers and Retailers Alike Realty’s Weilminster said. “Even with the extra design elements and higher quality construction materials, lifestyle centers offer significantly lower CAM (common area maintenance) and insurance costs than a regional mall. That’s a direct financial benefit to the retailer’s bottom line.”

While the regional mall segment continues to address the challenges posed by struggling department stores and market saturation, the smaller, more flexible lifestyle center format is demonstrating strong appeal among shoppers and retailers alike.

Considered the next stage in the evolution of the upscale/specialty retail concept, lifestyle centers typically offer open-air, amenity-rich shopping with extensive landscaping, outdoor music playing and convenient parking located close to the stores. They target affluent neighborhoods and include upscale specialty retail, trendy restaurants and theatres or other entertainment features.

With a gross leasing area (GLA) ranging between 300,000 and 500,000 square feet, lifestyle centers typically do not include traditional retail anchor stores, and they differ from town center developments in offering almost exclusively retail/entertainment space, while town centers often include a significant residential component.

However, the key distinguishing feature of any lifestyle center, according to Anthony Buono, managing director, retail services of CB Richard Ellis, is any open-air shopping center that features retailers typically found only in regional malls.

“As a category, the number of lifestyle centers will never be as big as neighborhood or community centers, but it is a very influential niche,” Buono noted. “They appeal to the upper income customer who is looking for a more enjoyable shopping experience than going to the mall. They may be new, but lifestyle centers have staying power.”

While the number of “true” lifestyle centers numbers less than 150 across the country, the retail store segment represents more than 10% of the planned and new centers under construction (those opening in 2005 and after), according to the latest numbers from CoStar subsidiary National Research Bureau (NRB). In contrast only three enclosed regional malls are planned to open. The growing appeal of lifestyle centers appears to be driven by several converging factors, according to industry experts.

“What lifestyle centers provide is convenience,” summed up Reza Etedali, president of Irvine, CA-based Reza Investment Group. “People don’t always want to go to a big mall, spend a lot of time parking and walking a long distance. Instead, you can drive to one of these new centers in your neighborhood, shop in the same high-quality stores you used to have to go to the mall to find, and meet your friends and neighbors for lunch at a nice place to eat.”

“I think consumers have weighed in on the issue by showing they prefer to shop closer to home,” agreed Chris Weilminster, senior vice president of leasing for Federal Realty Investment Trust based in Rockville, MD. “They want the convenience of parking close to their retail destination and in sight of the store where they want to shop. They don’t want to end up parking on the wrong side of a mall and walk 30 or 40 minutes to reach the store they’re looking for.”

In addition to drawing their preferred customer, retailers also like the fact that lifestyles centers are less expensive than renting prime space in a mall.

“Open-air construction is much less expensive to build and maintain (than an enclosed mall),” Federal Realty’s Weilminster said. “Even with the extra design elements and higher quality construction materials,

Lower operating costs and attractive shopper profiles paint a compelling picture for retailers. But what really sells retailers on lifestyle centers is sales. A recent study by the International Council of Shopping Centers (ICSC) found lifestyle center shoppers made shorter visits but spent more. Such destination shopping behavior (less browsing) is music to every retailer’s ears. The result is a sales average of $298 per square foot in lifestyle centers vs. $242 per square foot average in traditional regional malls. Higher dollars per visit, along with the lower operating costs, make lifestyle center pro formas very attractive.

Other factors behind this growth are the continuing slowdown in new regional mall construction, the search by national specialty chains for new platforms to support store growth, and a desire on the part of many consumers to combine the convenience of a strip center with the panache of upscale retailers.

As a result, major retailers that wouldn’t consider locating a store outside a mall three years ago are increasingly adding lifestyle centers as part of their overall retail strategies. A list of Top 10 Lifestyle Center Retailers in this article includes many apparel and specialty retailers that take space in both lifestyle centers and in traditional mall settings. Now we’re seeing such regional mall developers as Simon Property Group and General Growth Properties entering this space. As they do, they’re bringing previous relationships with regional mall anchors to the lifestyle center format, resulting in a blending of concepts to fit the needs of the specific markets and existing operating relationships of the developers.

“The regional mall developers are simply following their tenants into the lifestyle center space,” explained

CB Richard Ellis’ Buono. “They aren’t building new malls, and they have to generate FFO growth. That leaves two likely outcomes: buying and consolidating other mall owners; or doing something accretive to earnings, and for many that means moving into lifestyle centers.”

“We’re all in the same business now,” said Terry Brown, chairman of Columbia, SC-based Edens & Avant, one of the speakers who addressed the ICSC Conference on Open-Air Centers held earlier this year. Other speakers noted how the increasing size of some proposed lifestyle centers and plans to include traditional mall anchors are further blurring the lines between malls and lifestyle centers.

Buono said he expected the public mall REITs would acquire open-air center developers eventually. “The big players will have a lot of leverage, but I think there will always be room for independent, private developers who are more nimble than the REITs in responding to retailer trends and capable of holding their own in their local markets.” Buono cited Los Angeles-based Caruso Affiliated Holdings as an example.

“They’re the ones who built the Grove in Los Angeles,” Buono said. “That’s the future of retail. That center drew an estimated 18 million visitors in 2003, about 5 million more than Disneyland.”

As the lines between retail shopping center types continues to blur, experts expect lifestyle components to appear in future mall expansions, town centers and mixed-use developments currently under construction and planned to come. All that attention from real estate suppliers has some investors concerned about the impact on supply. There is a limit to the number of sites with the demographics necessary to support one of these centers. ICSC reports trade areas surrounding five such lifestyle centers indicate an average household income of $72,288, nearly 25% higher than the national average. Are there enough areas with such a demographic profile required to support these centers?

“More and more retailers are looking at lifestyle centers as an alternative to regional malls,” noted Federal Realty’s Weilminster. “The fact is, there simply aren’t many areas with the necessary demographics to justify building a regional mall. However, you can go into some of these smaller markets and infill locations with lifestyle centers that can draw on a 20- or 30-mile radius. That holds a lot of appeal to typical mall tenants who don’t want to be more than 50 miles away from their customers.”

“I wouldn’t say the opportunity is unlimited,” added Weilminster, “but there are lots of opportunities for retailers to go into markets that don’t necessarily have the numbers to support a mall. I think we’re seeing just at the beginning of this lifestyle trend.”

“We’re going to see some dramatic changes in the retail landscape over the next five to 10 years,” added

Reza Investment Group’s Etedali. “As the huge Baby Boom generation ages and enters the empty-nest syndrome, they’re looking for convenience and proximity to a variety of uses. We’re going to see a return to more street front retail, mixed-use urban living formats and even residential towers added to malls.”

SIDEBAR: Why Lifestyle Centers Are So Popular

Why all the attention on lifestyle centers? After all, there are less than 150 such centers nationwide, accounting for only a fraction of a percent of the total 40,800-plus U.S. shopping centers.

Is there really enough shopper demand for these types of centers? Are there enough optimum sites and “lifestyle” retailers to go into these centers being planned? These are questions industry experts and the investment community are asking.

The concept was first initiated by Poag & McEwen Lifestyle Centers in 1987 with opening of The Shops of Saddle Creek in Germantown, TN. Since that time this segment has grown exponentially, with a further anticipated growth rate of 48% in 2005 and beyond. Some older centers, previously positioned as upscale or traditional now have been repositioned as lifestyle through renovation and retenanting projects. Some regional malls also are incorporating the addition of “lifestyle wings” through expansion projects that often involve building out through space left vacant by closed anchors. It is expected more of these revitalization and expansion projects will be evident as this concept grows.

Ghosts and Pumpkins in Downtown Kent...

Posted by dave in Services News on October 25, 2007 | No Comments

Halloween has always been a big event in downtown Kent and this year Main Street is starting it off early with kids and families in mind. This Friday evening, October 26th, Main Street Kent is kicking off the Halloween weekend with all kinds of family fun including Kent’s first ever Ghost Walk and pumpkin carving contest. Read up on all these first ever events and festivities.

I was asked to be a pumpkin carving judge so I’m hoping to see some really creative stuff. With all the artists we have around town, I’m ready to be wowed.

See you downtown!

Channel 5 Filming In Kent Today!...

Posted by dave in Taking Care of Business on October 24, 2007 | No Comments

Channel 5 News out of Cleveland will be visiting Kent today to do a live broadcast for their Hometown Tour segment, featuring Kent. It’s great publicity for Kent and I know that the Chamber and the Main Street Kent folks are working hard to impress viewers from around the region with all we have to offer in our hometown.

Here was the notice from Mary Gilbert of Main Street Kent:

“Exciting News! News Channel 5 will be coming to Kent to do a Hometown Tour. They will be doing some background filming on Tuesday and will be filming live early Wednesday morning. We intend to show them the unique restaurants and shops that Kent offers.”

If you’re not familiar with the segment here’s the Loraine Hometown Tour:

Loraine Hometown Tour

City Finance Matters...

Posted by dave in Services News on October 23, 2007 | No Comments

The City staff are busy working on preparing their 2008 budget requests that are scheduled to go before Council in November. Calculating how much you need to run City services is one thing, but trying to make the numbers fit within the constraints of tight revenues is a whole different matter. The good news is that the City departments have actually been quite resourceful in the last 8 years, cutting and saving over $2 million to make ends meet. The bad news is that revenue sources continue to lag as both the economy (income taxes) and the housing market (property taxes) struggle to sustain levels from one year to the next, while health care, fuel, and personnel costs push their way higher and higher. This is a national challenge and here’s an interesting article from the NY Times that gives a good sense of the big picture cities all over are dealing with.

One thing to keep in mind for Kent, is that only about 10% of our revenues come from property tax, 90% come from income taxes. As you’ll see in the article, many other cities rely a lot more heavily on property tax than we do, so with the housing market in a bit of a tailspin, those cities are really hurting.

Kent’s housing market has been slow this year too, with construction permit fees down 13% for the first 7 months of 2007 compared to 2006. Depending on how much housing prices hold up in this declining market, this could be bad news for Kent schools that rely on property taxes — but with such a small share coming to the City, we’re always more concerned to see what income taxes are doing.

Income tax revenues seem to be holding steady. Last year we received $10,315,000 in income taxes so we used $10,400,000 for our 2007 budget target (essentially assuming no growth with a .1% increase). It appears that after 9 months we are on-pace to hit our target, which is good news. So far, total receipts are up 3.9% over last year at this time, with Kent State’s 6.2% increases making up the majority of those increases.

October 18, 2007

Housing Downturn Takes Toll on Cities’ Revenue

By MONICA DAVEY

CHICAGO, Oct. 17 — Suddenly everyone wants more from Chicago’s taxpayers.

Mayor Richard M. Daley asked last week for a 15 percent jump in the property tax. Todd H. Stroger, the president of Cook County’s board, called on Wednesday for increases in sales, gasoline and parking taxes. And all that does not even begin to address ways of keeping the financially troubled bus and train systems running.

While Chicago’s case may be extreme, it is by no means unique. Across the country, local governments are feeling a financial strain driven largely by the nation’s real estate downturn. City finance officers predict slowing revenue even as they remain under pressure to keep spending, especially in areas like health care and pensions, according to an annual survey by the National League of Cities.

To handle budget deficits they now expect, many cities are increasing fees for services, and some are considering raising property taxes, said the report, to be released Thursday.

“We know what’s coming here,” said one author, Christopher W. Hoene, director of policy and research for the National League of Cities. “If the housing market continues to flatten out or even decline, we’re in for some tough times for cities.”

The signs are all around, in flattening property assessments (which mean flattening property tax revenue) as well as rising mortgage foreclosures, which also bode poorly for revenue collections.

In Milwaukee, where a new budget proposal would cut the number of firefighters on some ladder trucks, the value of residential property had been increasing an average of about 13 percent a year since 2001. But those increases slowed sharply during 2006, said Mark P. Nicolini, the city’s budget and management director.

In Palm Beach County, Fla., foreclosures rose to 4,830 in 2006 from 3,049 in 2005. And in just the first eight months of this year, the number hit 7,544, said Sharon R. Bock, the county’s comptroller and clerk. Vacant job positions in Ms. Bock’s office are going unfilled, and “it could get worse,” she said.

In Cleveland, revenue from building permits has fallen about $450,000 short of projections this year. Further, foreclosures have limited the city’s ability to borrow money, because municipalities borrow against the assessed value of their property base, said Sharon A. Dumas, the director of finance. Cleveland had hoped to borrow about $45 million this year for capital projects, Ms. Dumas said, but now the number will most likely be closer to $35 million.

For the moment, she said, the city is finding relief in an unlikely place: baseball. Taxes on tickets for the Cleveland Indians’ postseason games against New York and Boston could bring in more than $1 million.

In interviews, some city and county budget officials said the direct effects of the housing downturn could have a lag time of several years when it comes to local government revenue, whose level depends on property reassessments. Some pointed to factors particular to their cities — a loss of state aid, perhaps, or legislation limiting local property tax collections — as more dire.

“In some respects, this may be a correction,” Mr. Nicolini, of Milwaukee, said of the real estate decline. “If the job market stays relatively strong, it’s less of a concern. But if the trend were to continue, then it gets worrisome.”

Even in New York, where revenue has soared the last several years, officials have been predicting a slowdown and are preparing for belt-tightening. The anticipated falloff is due in large part to lower expected profits on Wall Street and a projected decline in real estate transactions, rich sources of tax revenue.

“The good times don’t go on forever,” Mayor Michael R. Bloomberg said Tuesday, “and while I don’t think we’re going to have a recession in this city, I think it’s probably true that we will have a slowdown in economic activity, a slowdown in tax revenues.”

The report from the National League of Cities was based on responses from finance officers in 359 cities, all with populations of 10,000 or more, from April to June. It found that 7 in 10 believed their cities were better able to meet fiscal needs during 2007 than in 2006, but that many were quite pessimistic about the years ahead. In the Midwest, the picture was already grim: almost half reported that their cities were less able to meet their financial needs this year than last.

Some local and state governments built up large surpluses in recent years, which, they hope, will cushion them now. Next month, the United States Conference of Mayors meets in Detroit to look at the real estate downturn and its effects on residents and municipal budgets.

In Chicago, meanwhile, Mayor Daley confirmed Wednesday that he was pondering yet another way to raise money: selling or leasing city parking meters to a private company. Questioned about the notion, Mr. Daley pointed to everything he must pay for.

“How are you going to do all this?” he said.

Diane Cardwell contributed reporting from New York, and Catrin Einhorn from Chicago.

Nice Note From Kent State...

Posted by dave in Services News on October 22, 2007 | No Comments

To be honest, most of the police officers and firefighters that I know don’t do what they do as a way to get complements. But that being said, I don’t think any of them are disappointed when they get one. In that spirit, I received a copy of a letter from the Kent State Police Chief thanking a couple of the City’s paramedics for their good work in handling a difficult situation that involved a student last week. I thought it was worth sharing.

Hopefully, most of us won’t have a medical emergency that will require us to meet Jeff and Vince, but it’s good to know that if we ever do need them, they’ll be there for us and they’ll take good care of us.

Nice job guys.

Bike Sharing...

Posted by dave in Dream Big Kent on October 19, 2007 | No Comments

At one of the Kent multi-modal project meetings held last week, the consultants were looking for some feedback on what the steering team members thought the community would like, or would not like, to see as part of the prospective multi-modal facility. At this point, this is still just general discussions, but one of the items that they noted had come up in the earlier community meetings was bike sharing, so they asked for some feedback on the concept. Bike sharing has been around awhile in Europe and even in a few diehard biking cities in the US, but it hasn’t really caught on in the states and I wondered if it would work in Kent. I thought I had heard that someone tried bike sharing in Kent years ago but I haven’t been able to confirm that, nor have a found out whether it worked or not. Here’s a good article about San Francisco’s new bike sharing initiative. Let me know if you think it would work here or not.

In “it’s a small world” category, as I was doing a little research on bike sharing, I bumped into one of my former colleagues from my days in Alexandria VA, Paul DeMaio. It turns out he’s started his own consulting services for setting up bike sharing programs in the US. His company is MetroBike LLC. He always was a great advocate for bicycling so it’s great to see him translate that passion into a business.

Here’s a good source of bike sharing information in other cities, and here’s the recent news article.

San Francisco is one push of the pedal closer to offering residents and visitors a bike-sharing program in an effort to ease traffic congestion and to promote health through exercise.

More than a dozen European cities have government-sponsored programs in which bikes are provided for people to share. Last month, Paris started the most ambitious program yet, providing more than 10,000 bikes at 750 stations and expecting that the program will be double in size by year’s end.

Now, hilly San Francisco is gearing up for a program of its own. A proposed city contract with Clear Channel Outdoor Inc. that gives the company advertising rights on transit shelters also would require the company to set up a bike-sharing program if the city opts for one. The Board of Supervisors is scheduled to vote on the contract this month.

The cost to use such a program would be free or nominal, San Francisco leaders say, pointing to the Paris project as a possible model.

In Paris, particularly in the heart of the city, bike-docking stations are set up within a few hundred feet of each other. A one-day pass costs about $1.40; a weekly pass nears $7; an annual pass runs about $41. Inexpensive rental rates are charged on top of that, although the first half-hour of each trip is free. A deposit of about $200 is required in case the bike isn’t returned. The bikes are unlocked with a swipe of a credit card or a pre-paid card.

More than 100,000 Parisians have bought a one-year pass since the program started in July, and city officials report that the bikes have been taken on nearly 4 million trips.

The contract with Clear Channel falls under the jurisdiction of the Municipal Transportation Agency, which would have to tell Clear Channel to start the bike-sharing program. Mayor Gavin Newsom said that if he wins re-election he will urge the MTA to act on the option.

“The appetite for the system is there, and people will naturally gravitate toward it,” said Newsom, who lobbied for the bike-sharing provision in the contract.

He said that San Francisco residents want City Hall to make good on the official goal of reducing auto congestion and air pollution, and that biking is a good way to help do that. And the easier the city makes it for people to use a two-wheeler, the more likely they will, Newsom and other advocates say.

“People will think twice about the need to get in their car and go five or 10 blocks,” the mayor said.

Michael Poremba, a cycling enthusiast who lives in San Francisco and works in Redwood City, was in Paris in August and said he was amazed at what he saw. “Everywhere you looked, people were riding the bikes, tons of people,” he said.

“I think it could work really well here,” said Poremba, a 38-year-old data architect. “If people need to go on a quick errand, they could just grab a bike and go.”

The sturdy, three-speed, gray bikes used in Paris cost around $2,000 apiece. They’re embedded with electronic tracking devices, and a computerized system monitors the inventory at each station.

The company in charge of Paris’ outdoor ads, JC Decaux, paid the startup costs for the program and is responsible for maintaining it. The company has the exclusive right to 1,600 Parisian billboards.

Under the proposed San Francisco contract, Clear Channel would pay the MTA at least $306 million over the next 20 years and, if asked, fund and maintain a bike-sharing program. In return, Clear Channel would get the advertising rights on bus shelters and free-standing street kiosks.

What the proposed contract doesn’t spell out is the scope of the bicycle program.

Details such as how many bikes and stations would be included, where they would be located, what kind of technology would be used, whether there would be user fees and, if so, how much they would be, would be addressed in a separate agreement. Liability issues also would need to be decided.

Paul DeMaio, a bike-sharing consultant in Washington, D.C., said San Francisco should think big.

“It certainly would be in San Francisco’s best interest to have thousands of bicycles to make it a viable transportation mode,” he said.

Convenience is one of the keys to success, said Rachel Kraai, the programs manager for the San Francisco Bicycle Coalition. People use the bikes in the popular European programs to run errands, grab a bite during their lunch hours or to get from a train station to their office, she said.

It’s those mini trips, Newsom said, that will help San Francisco “create a more-sustainable transportation system.”

DeMaio said programs in Paris, Lyon, Barcelona and other cities that marry advanced technology with pedal power are the third generation of the concept.

The first generation, which San Francisco toyed with in the 1990s and other cities have experienced with mixed results, consists of placing a bunch of donated bikes – often painted yellow – around the city and letting people ride them for free, leaving them for the next user when they’re done. But that utopian vision often fails: The bikes are regularly vandalized or stolen.

The next generation of programs involve bikes stored in designated locked racks so at least people would know where to locate them, DeMaio said. Such programs can be found in Copenhagen and Helsinki, where users pay a minimal deposit when they pick up the bikes and get the deposits back when they return them – much like the system some grocery stores use for their carts.

The third generation of bike-sharing programs is high-tech, with electronic payment, tracking and locking systems.

San Francisco is not the only major city in the United States eager to start such a bike-sharing program. Washington, D.C., is moving forward with one, and officials in Portland, Ore., and Chicago have expressed interest. New York City Mayor Michael Bloomberg, who visited Paris last month, said his administration is exploring a bike-sharing endeavor, but he told reporters on his trip abroad that he didn’t know how it would translate in the Big Apple where bike theft is widespread, liability is a big worry, and there aren’t a lot of bike lanes.

Newsom said he’s heard similar concerns from people in his own city government, but he said if Paris could work it out, so can San Francisco. Newsom said it is unclear how long a full-scale program could take to develop.

« Previous Entries