Norfolk could reap $29M for light-rail naming rights

NORFOLK

Selling naming rights to light-rail stations, park-and-ride lots, or even the entire rail system could reap nearly $29 million in revenue to help pay for running the system, a study shows.

While the city and Hampton Roads Transit have not decided whether to pursue the idea, the transit agency hired a consultant to explore its potential.

"In these economic times, naming rights is about revenue that is sorely needed," said City Councilman W. Randy Wright. "I see it as a steady revenue stream to help offset operating costs."

Light rail's annual operating costs are estimated to be $8 million to $9 million, of which the city will shoulder about 30 percent. Fares plus federal and state funds will cover the rest.

Norfolk has not sold naming rights for public facilities, although it recently announced a naming campaign for overhauling Town Point Park.

Wright said city leaders have approached the issue with trepidation.

"We've not been as aggressive on that front as we could have been," he said. "Maybe this could open it up a bit."

Locally, high-profile public facilities that have sold naming rights are the nTelos Pavilion amphitheater in Portsmouth, the Verizon Wireless Virginia Beach Amphitheater and the Sandler Center for Performing Arts in Virginia Beach.

It's a new concept to public transit and light rail in particular, according to consultant Alan Wulkan of InfraConsult, who works with HRT on light-rail public outreach.

In Cleveland, two hospitals bought the rights to name a new bus rapid transit system there Healthline for $11 million over 10 years. In Las Vegas, monorail stations and trains are named for sponsoring companies.

Several light-rail system operators are considering naming programs, including those in Detroit and in Phoenix, which opened its system Saturday.

HRT hired The Superlative Group Inc., of Cleveland, for $50,000 to study the potential. Its draft report values a package of naming rights for the Norfolk line at about $29 million over about 20 to 30 years.

"The most valuable asset will be the naming rights for the entire line," Wulkan said.

The 7.4-mile system, now under construction from the medical complex on Brambleton Avenue to the city line at Newtown Road, is already known as The Tide.

The consultant estimates that naming the entire system would be worth $20 million to $25 million if The Tide is dropped and replaced by a sponsor's name. If the city and HRT opt instead to maintain The Tide and go for a "presenting-level" sponsorship, the revenue would be about half.

Naming stations could generate another $3 million to $5 million, the report concludes.

The city and HRT could opt for a full package or could decide to name only some elements such as stations, the maintenance facility, and park-and-ride lots, or sell rights to operate vending machines and ATMs at stations.

Assistant City Manager Stanley A. Stein said, "I don't think this is something the city needs to rush into."

The $288 million light-rail line is projected to open in mid- to late 2010. Stein said he plans to have the consultant make a presentation to the City Council in about a month.

"It's fine to say this is how much we can raise, but what are the rules of the road going to be?" he asked. "What principles are we going to build this on?"

Debbie Messina, (757) 446-2588, debbie.messina@pilotonline.com