Projected $2 Million ARTIC Shortfall in First 6 Months

The OC Register has reported the Anaheim Regional Transportation Intermodal Center (ARTIC) will run a $2 million deficit in its first six months of operation. Some excerpts:

Before it was built, the Anaheim Regional Transportation Intermodal Center was expected to be a self-sustaining hub that would be primarily financed by revenue from advertising and a naming-rights sponsor.

More than four month have passed since ARTIC opened, and city officials said that they aren’t close to securing a company willing to pay to put its name on the 67,000-square-foot facility, while total advertising revenue during the six months of operation are projected to be $81,675.

By June’s end, city officials expect to earn $391,548 in total revenue for ARTIC, falling far below the anticipated $2.38 million cost to keep the facility’s doors open.

“By definition, we’re being forced to reduce city services from what we could have otherwise spent,” Tait said. “The city needs to figure out how to cut ARTIC’s operating expenses as much as we possibly can. Fiscally, it hasn’t worked out so far.”

Anaheim’s coffers are on pace to have a surplus of at least $1.5 million above reserves, which will likely be used to cover ARTIC’s near-term operating shortfall, said city spokeswoman Ruth Ruiz. The City Council will soon consider whether to approve that allocation.

Ruiz said city officials are studying how to reduce ARTIC’s operating costs for the next fiscal year that begins July 1, but an initial estimate released last year projected a $5.2 million spending plan.

“We wouldn’t be dipping into reserves or city services to pay for ARTIC, we would be dipping into surplus revenue from the city,” Councilwoman Kris Murray said. “There are several avenues to explore to earn some revenue for ARTIC, and I want to see any money that goes toward these early operations to be repaid once the station becomes revenue-positive.”

Along with a potential naming-rights sponsor, future revenue could come from developing the city-owned property surrounding ARTIC for housing, retail or office space. Some additional revenue could come from ARTIC tenants.

You can read the entire article here.

Tapping surplus revenue to cover this deficit isn’t exactly optimal; it’s money that could be used for other purposes and there won’t necessarily always be surpluses to tap. ARTIC isn’t going away, and carping won’t dispel the deficit either. Ways have to be found to realize the promise of it being self-sustaining. Among those is bringing back the freeway billboard proposal, and doing so in a manner that anticipates and prepares for the disinformation onslaught that will almost certainly be mounted by Regency or another outdoor advertising company.

2 comments

  1. Instead of having one (big) company’s name as a sponsor, let’s have multiple names. This way the cost is split up equally. I heard that the three parking lots are free for the first year and thereafter there will be fee. The city and the residents need to advertise to family, friends, co-workers –to beat traffic coming into Orange County is to take the Metrolink or Amtrak from their city’s station. There are other transportations available locally (OCTA, ART) and long distance (Greyhound buses).
    I am very pleased that Mission Market became the first retailer at the ARTIC and the Anaheim Public Library added a kiosk to borrow books directly! Perhaps that is what is needed as well…small and convenient service to “grab-n-go” on one’s way to their destination!

    The city does not need MORE residential housing PERIOD!! Retail and businesses, such as cafes, YES!

    Residents and local businesses needs to be included in any future advancements for ARTIC and any other constructions throughout the city!

    I have more to say, however this comment is getting too big.

    Thank you to everyone!

  2. “carping won’t dispel the deficit either”

    Carping? You mean about the $200,000,000 spent on an empty glass shell that was not even necessary, and now having to pay all those window washers?

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