The Utah Transit Authority is floating a novel way to help avoid or reduce future tax hikes: selling rights to name its TRAX stations or even entire transit lines.
San Diego did that last year in a deal with Sycuan Casinos. For $25.5 million over 30 years, it renamed what is now called the Sycuan Green Line. Cleveland and Philadelphia have made similar deals with companies.
It’s akin to the Utah Jazz renaming their indoor stadium the Vivint Smart Home Arena for the revenue. Formerly, it was the EnergySolutions Arena, after originally being called the Delta Center — depending on who bought 10-year sponsorships.
Maybe some such company would like a transit line named for it, too, or at least a key transit stop.
“We’re open to options and looking at all these opportunities,” Steve Meyer, UTA interim executive director, told the Transportation and Tax Review Tax Force this week.
(Rick Egan | The Salt Lake Tribune) UTA interim Executive Director Steve Meyer says a few words as South Salt Lake and other dignitaries met to break ground on construction of UTA’s S-Line double track project at 2233 S. 300 East, Monday, June 11, 2018.
The task force was formed by the Legislature to study how to fund and manage future transportation, especially because lawmakers just decided to allow transit to share in transportation funds that had previously been reserved for highways.
The panel asked UTA and the Utah Department of Transportation for reports on possible alternative funding tools as some transportation taxes have just been raised — and others soon may be.
Salt Lake County — after approval by cities representing most residents — will soon impose a $58 million a year sales tax hike for transit and roads. It is a 0.25 percent increase (2.5 cents per $10 purchase). Voters had rejected such an increase in 2015, but the Legislature this year gave counties authority to collect the tax without voters' OK.
Voters statewide also will be asked in a nonbinding question on the Nov. 6 ballot whether to raise the gasoline tax by 10 cents a gallon. It would clear the way to shift sales tax revenue that now goes for transportation to education instead.
Meyer said UTA has pursued money-raising alternatives to sales taxes for years. Those range from selling advertising on its trains and buses to working with businesses to subsidize bulk sales of transit passes for employees; from persuading concert promoters to include transit fare in tickets to cutting deals with developers to use UTA surplus property for a share of profits.
These supplemental revenue activities help, Meyer said, but in the end provide only about 3 percent of the agency’s $403 million annual operations budget.
Among new areas the agency may explore are the selling of naming rights to transit stations or entire transit lines.
Meyer noted that Cleveland sold the naming rights for a bus rapid transit line to multiple agencies, including the Cleveland Clinic and the University Hospitals of Cleveland. The route was named the HealthLine.
Besides San Diego selling rights to Sycuan Casinos to name a streetcar line, the city reached a $30 million, 30-year deal with UC San Diego Health to name the UC San Diego Blue Line.
Meyer said such deals provide San Diego about $2.5 million a year. “That’s comparable to what we’re getting in advertising [revenue] now.”
The Southeastern Pennsylvania Transportation Authority cut a $3.4 million deal to rename its Pattison Station, near major Philadelphia sports venues, as AT&T Station. But a transit agency in Boston that tried to sell naming rights found no firms interested in paying the fees it sought.
Meanwhile, UDOT is also eyeing an unusual way to raise money: selling the naming rights to its small fleet of 25 vans that help manage breakdowns or crashes on freeways — and is seeking changes in law to allow that.
The trucks could end up decorated with sponsor advertising, or UDOT could also put signs along freeways noting that incident management is provided by a sponsor, such as an insurance company.
Linda Hull, policy and legislative services director for UDOT, said the proposal was considered but pulled out of a 2015 bill that allowed the agency to try to sell naming rights for rest stops and traveler information services.
She said lawmakers worried it would confuse motorists about who was providing the service.
However, 23 other states now offer such sponsorships, Hull said, and it seems to work fine for them. A UDOT consultant indicated it could likely sell such sponsorships.
She sought permission for the agency to explore it more and said it shows promise of generating $100,000 to $1 million a year.
The incident management trucks budget is $3.3 million a year, Hull said, so “any funding that could perhaps offset some of that service would be nice.”
UDOT promised to do more research and present findings to lawmakers.
