Pattison Outdoor Advertising has been awarded a long-term contract to supply street furniture for the city of Richmond, B.C. The Toronto-based company successfully responded to an RFP issued by the city of 214,000 late last year.
The new 20-year contract, which kicked off Aug. 1, continues a longstanding relationship between Pattison and Richmond. Pattison’s previous five-year contract with the city expired on Dec. 1, 2015.
A staff report from last year said a 20-year term would help “maximize the potential benefits to the city,” since out-of-home operators require adequate term length to amortize costs and generate enough advertising sales to recover their costs and generate a profit.
“What happens is that the companies are saddled with the capital [costs] of installation,” said Steve McGregor, Pattison’s vice-president/general manager for the Pacific region. “The cities are not just asking for transit shelters anymore: They want transit shelters, a non-advertising transit shelter, benches, garbage cans, lighting – all of this stuff adds up.
“The companies are saying ‘We’ll pay for it, but you have to give us a long-term commitment because we’ve got to get our money back.’ You will not see any more agreements that are less than 10 years.”
Pattison currently has several long-term agreements in place with municipalities throughout the province, including the District of North Vancouver (a 20-year deal awarded in 2014), West Vancouver (20 years, awarded in 2011), New Westminster (15 years, awarded in 2008) and Surrey (20 years, awarded in 2009).
As part of the new contract with the city of Richmaond, Pattison plans to quadruple the city’s transit shelter allotment from 56 to between 200 and 250 over the next decade, while also adding 600 bus benches (300 of which will feature advertising faces).
The outdoor advertising company will also supply 200 recycling bins and 200 litter bins, though they will not carry advertising. McGregor said Pattison also planned to add digital capabilities to between 5-10% of its inventory over the next five years.
He said Pattison continued to see “very strong” investment from local advertisers, which represented about 55% of its current ad revenues in B.C. (up from 45% about 10 years ago). He said national advertising is “always up and down.”
