REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Update on the Levi’s Stadium Naming Rights Signage Assessment and Request for Direction from the Stadium Authority Board
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
The Naming Rights Agreement (Agreement) between the Stadium Authority and Levi Strauss & Co. (Naming Rights Sponsor), provides that the Naming Rights Sponsor will receive Naming Rights Entitlements such as signage, media, among other things. The Naming Rights Entitlements includes the following Exterior Stadium and Interior Stadium Signage:
• Suite Tower - Marquee Sign. One (1) primary exterior stadium identification banner sign displaying the Stadium Name in large lettering (the "West Side Lettering").
• East Facade Marquee Sign. One (1) large, centered sign across the east-facing exterior displaying the Stadium Name in large lettering (the "East Side Lettering" and, together with the West Side Lettering, the "Stadium Name Lettering"), visible to surrounding corporate and residential areas.
• Two (2) primary seating bowl stadium identification channel cut or panel signs above the Stadium scoreboards displaying the Stadium Name. The signage will face the inner bowl of the Stadium and will be illuminated during all Stadium events.
Under Sections 3(g) and 5(f) of the Agreement, the Stadium Authority is responsible for the installation, illumination, cleaning, repair, and maintenance of the Naming Rights signage. The referenced Agreement provisions are included in Attachment 1.
The Stadium Authority Fiscal Year (FY) 2022/23 Capital Expense (CapEx) Budget includes line items for a Levi's Naming Rights Signage Refurbishment project ($1,260,000) and a Levi's Naming Rights Existing Signage Lighting and Driver Repair project ($420,000) related to the four (4) signs located above the North and South Scoreboards, west side of the suite tower, and on the east side of the grandstands. On May 10, 2022, the Board approved the Stadium Manager’s request to enter into an agreement with a vendor to complete needed interim repairs to the Naming Rights signage. As part of their approval, the Board also directed staff to explore options for a more cost-effective way to address the Stadium Authority’s ongoing obligation to adequately maintain the Naming Rights Sponsor signage.
Consistent with the Board’s May 10, 2022 discussion and direction, staff reviewed an assessment report submitted by the Stadium Manager dated July 9, 2021 prepared by a third-party sign consultant, Architectural Design & Signs, Inc. (AD/S) (Attachment 2). While the scope of the July 2021 assessment was comprehensive, the signs’ condition changed through subsequent repairs completed in September 2021. There would be further changes from additional repairs that were scheduled for August 2022. Therefore, some of the analysis/conclusions included in the AD/S report would have changed or no longer applicable.
As the Stadium Authority and City do not have the internal resources or expertise necessary to advise the Board on the best next course of action (e.g., continue to repair as the need arises, refurbish the signage, or replace the signage), staff recommended hiring a third-party vendor to complete an independent assessment of the signage. On July 5, 2022, the Board delegated authority to the Executive Director to procure, negotiate, and execute an agreement with a third-party vendor in an amount not to exceed $30,000 to assess the Levi’s Stadium Naming Rights exterior signs and make a recommendation on the most cost-effective long-term approach.
This report provides an update on the Levi’s Stadium Naming Rights signage assessment.
DISCUSSION
In July 2022, the Stadium Authority released a Request for Statement of Qualifications (RFSOQ) on the Stadium Authority’s e-procurement platform, DemandStar, for the Levi’s Stadium Signage Assessment. A bid notification was also posted to the City’s e-procurement platform, Periscope S2G (formerly BidSync), directing bidders to the Stadium Authority’s e-procurement platform. A total of 34 companies viewed the RFSOQ and one responsive bid was received from Square Signs, LLC DBA Front Signs.
In October 2022, the Stadium Authority entered into an agreement with Square Signs, LLC DBA Front Signs, in the amount of $6,766, to assess the condition of the four Naming Rights signs and provide a recommendation and corresponding report based on the assessment. Square Signs, LLC DBA Front Signs reviewed existing documents, such as the original construction documents, shop drawings, structural engineering, welder’s certifications, warranty information and lighting/electrical plans, and the scope of completed repair work that occurred in 2018, 2021 and 2022 which were confidentially shared with the vendor after they were selected from the RFSOQ, as requested by the Stadium Manager.
On November 30, 2022, the vendor visited Levi’s Stadium to determine accessibility and the necessary equipment to complete a condition assessment of the four signs as part of their overall assessment. A few days after their visit, the vendor notified staff in early December that they would not be able to implement the project due to it being more complex than they had originally assumed since they had not visited the location before and were unfamiliar with the existing conditions (e.g., access to at least one of the signs required street closure/traffic control, etc.). As result of the vendor’s determination, the agreement with Square Signs, LLC DBA Front Signs was terminated.
Staff requests direction from the Board on how to move forward with the Naming Rights signage. The following are potential options: 1) Accept the existing third-party assessment report provided by the Stadium Manager which recommends removal of existing signs and installation of new signs (approximately $1,190,850 at the time of the July 2021 report) and direct staff to work with the Stadium Manager to submit a Naming Rights Signage Replacement Project for the FY 2023/24 CapEx Budget, or 2) Direct staff to re-bid the project and hire a new vendor to perform an independent assessment of the Naming Rights signage and make a recommendation on the most cost-effective long-term approach.
Option 1: Accept Existing Third-party Assessment Report Submitted by Stadium Manager and Work with the Stadium Manager to Submit a Naming Rights Signage Replacement Project for the FY 2023/24 CapEx Budget
AD/S completed the following as part of their assessment of the Levi’s Stadium Naming Rights signage:
• Reviewed internal documents: 2014 original construction documents, shop drawings, structural engineering, welders certifications, warranty information, and lighting/electrical plans, proposed and completed 2018 repair work, and photos of the signs at the time.
• Conducted an onsite survey in June 2021 to determine site accessibility for equipment, current conditions of the signs, existing electrical connections and day/night visibility of the signs.
• Prepared a summary of discoveries, which outlined: 1) current condition of the signs was not recommended for retrofit/reconstruction, 2) if the decision is to reuse and reconstruct the signs to complete working order, Levi’s Stadium would be without Naming Rights signage for a significantly longer timeframe than would be required for removal and replacement, 3) equipment required onsite will directly impact Stadium events, 4) repair vs. replacement costs, and 5) material and product used to fabricate these signs have evolved greatly since 2014.
• Based on the internal review of documents and onsite survey, made a recommendation to remove the existing signage and replace with new.
Within the summary of discoveries, the July 2021 AD/S report provided cost estimates for 1) removal, retrofit, and reinstallation of all four signs (approximately $995,000), and 2) removal of existing signs and installation of new signs (approximately $1,190,850). They noted that the pricing was based off of market conditions at the time and material escalation, and that they had experienced continued increases in the price of materials used to fabricate and install such signs. AD/S recommended the latter approach, to remove the existing signs and install new signs.
It is unclear what the cost of a complete replacement of the four Naming Rights signs would be at this time. A Levi's Naming Rights Signage Refurbishment line item is included in the Stadium Authority FY 2022/23 CapEx Budget at the cost of $1,260,000. Since the AD/S report was prepared in 2021, the cost of the replacement could exceed the $1,190,858 cost outlined in the report by more than 25%.
It should be noted that while there have been repairs to the signs, unrepaired areas continue to fail. If the Board would like to use the existing third-party assessment and recommendation, staff would need to work with the Stadium Manager to submit a Naming Rights Signage Replacement Project for the proposed Stadium Authority FY 2023/24 CapEx Budget.
Option 2: Direct Staff to Seek an Independent Third-party Assessment
If the Board wants to receive an independent third-party assessment before determining how to move forward with the Naming Rights signage, staff will have to re-bid the project. The process would likely take several months to complete, and it is not guaranteed that the Stadium Authority will receive any bids from the process.
Should the Board decide to move forward with this option, staff requests that the Executive Director be delegated authority to procure, negotiate, and execute an agreement with a third-party vendor in an amount not to exceed $40,000 to assess the Levi’s Stadium Naming Rights signs and make a recommendation on the most cost-effective long-term approach. The not to exceed amount has been increased to reflect the sign vendor’s subsequent estimate for equipment rentals.
Staff will return to the Board with the independent assessment after it is completed so that it can determine how to move forward with the Naming Rights signage.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Option 1: Should the Board decide to pursue Option 1, staff will work with the Stadium Manager to submit a Naming Rights Signage Replacement Project for the proposed Stadium Authority FY 2023/24 CapEx Budget. The replacement project would likely exceed $1,260,000, which is the amount currently budgeted for a Levi's Naming Rights Signage Refurbishment project in the Stadium Authority FY 2022/23 CapEx Budget based on the assumption that a complete replacement would cost more than refurbishing the signs.
Option 2: Should the Board decide to pursue Option 2, the Stadium Authority FY 2022/23 Operating Budget, General and Administrative Budget contains $150,000 for Board directives and Executive Director assignments. There are sufficient funds to cover the cost of the sign assessment services (not to exceed $40,000).
COORDINATION
This report has been coordinated with the Treasurer and Stadium Authority Counsel’s Offices.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
ALTERNATIVES
1. Accept the existing third-party assessment report by AD/S that recommends a complete replacement of the four existing Levi’s Stadium Naming Rights signs and direct staff to work with the Stadium Manager to submit a Naming Rights Signage Replacement Project for the proposed Stadium Authority FY 2023/24 CapEx Budget; or
2. Direct and authorize the Executive Director to procure, negotiate, and execute a new agreement and any amendments as needed with a third-party vendor in an amount not to exceed $40,000 to assess the four Levi’s Stadium Naming Rights signs and make a recommendation on the most cost-effective long-term approach.
RECOMMENDATION
Recommendation
Staff requests direction from the Stadium Authority Board on how to move forward with the Levi’s Stadium Naming Rights signage.
Staff
Prepared by: Christine Jung, Assistant to the Executive Director
Approved by: Rajeev Batra, Executive Director
ATTACHMENTS
1. Naming Rights Agreement Provisions
2. AD/S Assessment Report