No Money, No Problem: Building a Transit Station With Hope

by Vickie Vértiz
Even though a founding corporate sponsor has not been secured by city officials, the transit station is still slated to open on December 6. The move will likely create a budget shortfall for the station operations expenses in the next seven months, said The Orange County Register.
The Anaheim Transportation Intermodal Center or ARTIC, is a huge terminal that connects Metrolink, Amtrak, taxis, and buses to residents. The developers and the city were hoping to locate a sponsor to be a primary funding fountain to operate and run the hub. The sponsor would also have naming rights over the hub, similar to places like AT&T Park in San Francisco, for instance.
The cost to operate the hub is upwards of $3.6 million, said the Register, but this figure is only to maintain and operate ARTIC through the end of June 2015. Currently, only half of that amount has been secured. The Register said that those funds are located in an account created so “the transit center could be financially self-sustaining, according to figures provided by city officials.”
To operate the hub, during an entire fiscal year, the cost is estimated at more than $5.2 million beginning on July 1, 2015, said the paper. But all is not lost. The paper mentions the idea that “near-term losses could be offset with potential revenue gained from long-term development of the land surrounding ARTIC,” according to Natalie Meeks, who is head of the Public Works Department in Anaheim.
During a tour of the transit terminal, Meeks said that, “We will operate in the red for a while, but then that can then be repaid with potential development on the site in the future.”
“That’s the 20-year funding plan for this,” Meeks added. “That there is a shortfall in the beginning, and then with the development and other things coming online with tenants, the leases go up and then you can start to pay back those funds.”
The $185 million construction cost was paid for through funds collected as a result of Measure M, a half-cent sales tax in Orange County passed by voters to pay for ARTIC and other transit projects. The Orange County Transportation Authority is the responsible county entity, but the ultimate responsibility of the City of Anaheim.
So far this year, the City has allocated more than $1.5 million to pay for ARTIC expenses, said the Register.
“I’m expecting our staff to come up with a way to pay the bill,” Councilwoman Gail Eastman told the Register. “Our first priority was getting the building done and getting the concession leases signed.”
Anaheim contracted The Superlative Group to locate a sponsor for ARTIC. The Group is lined up to receive a 10 percent to 15 percent commission, said the paper.
Meeks said in a statement quoted by the Register: “Transportation is a new market for sponsorships, and we feel ARTIC has great potential for years to come as a highly visible opportunity for any naming-rights sponsor.”
The interim City Manager Paul Emery was hopeful that the right sponsor would be found soon. He told the paper that, “With future revenue opportunities, we are confident with the financial prospects of ARTIC as well as its long-term benefits to the city and the region as a whole.”

ARTIC renderings - Courtesy Photo

ARTIC renderings – Courtesy Photo

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