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Greuel says L.A. has lost out on revenue from street furniture [Updated]

January 12, 2012 |  2:27 pm

City Controller Wendy Greuel at a press conference last summer. Credit: Al Seib / Los Angeles Times
Los Angeles has lost out on more than $23 million in revenue in part because officials have been slow to approve permits for advertising on street furniture, City Controller Wendy Greuel said Thursday.

In an audit of the city’s 20-year contract with a private firm that installs and advertises on kiosks, newsstands, public toilets and other street furniture, Greuel found that the city waited too long to grant permits for some of the items than the contract called for.

Greuel said that delay, combined with miscalculations of annual fees due to the city, led to the loss of revenue, and could lead to up to $57 million in additional losses unless officials renegotiate the terms of the agreement.

The contract, which ends in 2022, calls for the company to pay for and install thousands of pieces of the street furniture, and reap most of the advertising revenue. In return, the city is supposed to get a small fee for each piece of furniture.

Greuel called the contract with CBS Decaux, which was supposed to bring approximately $150 million in revenue for the city, but which has brought less than $30 million so far, “unrealistic in terms of expectations from the very beginning.”

The installation of each piece of furniture requires approval by city officials. One problem appears to be that in some neighborhoods, the furniture is unpopular.

[Updated at 3:56 p.m. Board of Works Commissioner Andrea Alarcon said in a statement Thursday afternoon that her department would work with other city officials to “effectively implement as many of the controller's recommendations as possible, including the completion of a full program review and the execution of a contractual amendment that will rectify many of the noted shortcomings that have arisen during the program's initial tenure with the city."]


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Photo: City Controller Wendy Greuel at a press conference last summer. Credit: Al Seib / Los Angeles Times