Under pressure to raise money to meet growing capital and operating expenses, Metro leadership is considering a number of options — ranging from increased parking fees to more digital advertising.
But of all the possibilities up for discussion, the one likely to draw the most attention is selling naming rights to stations.
The idea has been studied and rejected before, and existing policy prohibits the practice. But Metro board members now agree that the financial stress faced by the system could be grounds for a change. At the very least, it’s enough to start the conversation.
“We have an obligation to look at the waterfront and see what kind of opportunities there are for enhancing revenue, and I think a policy dealing with naming rights for stations is something we need to consider,” board member Michael Goldman said. “We can’t keep blinders on our eyes.”
The idea is one of several that will be up for discussion at Thursday’s board meeting.
Goldman, along with the board’s chairman, Jack Evans, and member Malcolm Augustine acknowledged that such a change could face significant rider pushback.
Among the issues raised five years ago, when the idea was last discussed, were concerns about brand association with historical landmarks. The agency also found that a majority of riders were opposed to the idea and wanted short station names that could be used as wayfinders, according to Metro staff.
But board members now say that without additional funds, more fare increases or service cuts might be necessary. For riders, adjusting to potential names like “Navy Yard-Nationals” or “Gallery Place-Verizon Center” may be worth the trade-off.
According to documents prepared for the board’s presentation, New York’s Metropolitan Transit Authority signed a contract with a developer to rename Atlantic Avenue Station as Atlantic Avenue-Barclays Center. The contract is for $200,000 a year for 20 years for a total of $4 million.
Philadelphia’s SEPTA system signed a five-year, $5 million deal to change the name of Pattison Station to AT&T Station. It also signed a deal with Jefferson Health System for $4 million over five years to rename its Market East Station as Jefferson Station.
The Massachusetts Bay Transportation Authority, which run’s Boston’s “T,” approved and developed a corporate sponsorship plan but didn’t get any proposals that met its minimum bid requirement. The Los Angeles Transit Authority also approved a plan last year but repealed it in February because of legal concerns.
Metro staff sees potential naming opportunities for Gallery Place, Navy Yard, Metro Center and L’Enfant Plaza, based on their proximity to popular venues and high ridership, according to the staff presentation.
Even so, board members cautioned against treating the possibility as anything more than a preliminary discussion. The option is merely one way to ensure that the board has, in Augustine’s words, “uncovered every stone with regard to revenue.”
“It is a matter of doing due diligence, to listen and then to take everything into consideration, and then come up with a recommendation,” Augustine said. “It won’t just be a one-day discussion.”
According to board documents, ad revenue is anticipated to total nearly $24 million in fiscal 2018 — about 1.3 percent of Metro’s annual operating budget.
The agency has already moved forward with some of the other initiatives to raise money. Starting this fall, Metro will install more than 65 new digital advertising kiosks at stations throughout the system. Officials are also planning new digital “fare information” displays at the Union Station and National Airport stations, and they want to convert analog advertising boards into more-lucrative LED displays.
Digital advertising displays generate three times the revenue of traditional displays, according to the staff presentation.
They also want to encourage more train and bus “wraps,” mural-like advertisements that cover the entire exterior of the vehicles. And they’ll be pushing to find businesses and organizations interested in paying for “station dominations” — when a station is plastered in advertisements for a single entity, a “total brand experience,” Metro says, which costs $60,000 to $100,000 for four weeks.
Officials also hope to wring more money from parking at Metro facilities. There are no plans to increase existing basic weekday rates — at least for now. But the agency wants to launch pilots that would begin charging motorists for leaving the parking lots earlier in the morning — lowering the exit gates at 7:30 a.m. rather than 9:30 a.m.
They agency also would expand the “non-rider parking fee” program to more stations — charging extra for those who park at stations but don’t use the trains or buses. Officials also want to partially lift the ban on food and drink vendors operating on Metro property, so the parking lots could host weekend farmers markets or community events.
Metro is also seeking to capitalize on the growing activism centered on Washington — charging special weekend parking rates on the days of big events, such as the Women’s March. Weekend parking at Metro facilities is currently free.
Metro says the agency could make an extra $3.6 million a year by implementing these new parking fees.
Yet station names strike a particular chord with riders — and have since the Metro’s early years. Most recently, the addition of “Kennedy Center” to Foggy Bottom-GWU had riders scratching their heads over a 27-letter station name located a half-mile from the iconic performing arts space.
The way Goldman sees it, the revenue that could be brought in would depend on the particular station, commercial entity and the duration of the contract. And riders shouldn’t necessarily expect that entire station names would be overhauled. They might, for example, include hyphens to maintain traditional geographic names.
“As I envision it, all the money wouldn’t be available when the arrangement is signed,” Goldman said. “We would amortize the amount over the period of the agreement, so that if it was a 10-year agreement, we would only credit 1/10 of the amount as advertising revenue as revenue in each year.”
Zachary M. Schrag, a historian at George Mason University and the author of “The Great Society Subway: A History of the Washington Metro,” said adopting a new naming rights policy ultimately boils down to a costbenefit analysis. In the abstract, “somewhere in between no net revenue and one billion dollars is the appropriate amount,” he joked. The right balance comes with collecting a worthwhile sum and not “doing damage to people’s ability to navigate the system,” he said.
Evans knows to expect a range of public reactions.
“For the most part, people are going to oppose everything we do, because that’s human nature,” he said. “Most people don’t want to change the station names, have us charge for parking, more advertising — they want everything to stay as it is yet have enough money to run the system.”