Giant Lincoln taxpayer-funded TV wasn’t enough — developers want to sell ads on it

By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. — How would you like to have a million-dollar Panasonic LED TV screen? Better yet, paid for with tax dollars?

That’s the situation for the developers of the Railyard, a block of restaurants and bars across the street from Lincoln’s new Pinnacle Bank Arena. The private developers at WRK put the 750-square-foot, Jumbotron-like outdoor screen in the courtyard of the entertainment district.

It was paid for by with the property taxes WRK would have otherwise paid in the area.

On Husker basketball game days, the Cube shows the game. On Valentine’s Day, it showed the movie “Tangled.” Other times, the screen might show computer animation or digital art.

The developers were allowed to sell limited ads on The Cube, but apparently, that’s not bringing in enough money, so they’re asking Lincoln to allow them to sell more sponsorships and ads on the big screen to offset the cost of the Cube, public events and public art.

Brett West, director of development for WRK, told the Lincoln Journal Star it cost the company about $500,000 last year to operate the Railyard, saying, “It’s a financial issue.” The Railyard is the development of bars and restaurants. The Cube itself is just a part of the Railyard, which includes a public plaza that is an ice skating rink in the winter.

It cost about $1 million to build and install the Cube, which was paid for with tax increment financing, an urban renewal financing tool that diverts property taxes that would normally be paid on the new development back into the project. Using TIF to buy a giant TV screen was a significant departure for Lincoln, which normally uses the public subsidy for things like streets and sidewalks, water and sewer lines.

Now WRK also wants the city to change the special sign district that was created for them so they can identify sponsors of the Railyard and Cube and run video ads on the Cube. Currently, they’re only allowed to use still graphics. They’re seeking a zoning change that would amend their special sign district to allow two sponsorship signs for the Railyard, a title sponsorship sign for the Cube and additional limited advertising on the Cube.

A bar owner down the street isn’t happy about WRK’s request. Kevin Duffy, owner of Duffy’s Bar at 235 N. 9th Street, wrote to the Lincoln City Council saying it was disconcerting to hear of WRK’s request less than seven months after the Railyard’s opening.

Duffy said $500,000 is a meaningless number unless WRK specifies whether that’s the total operating budget or cost in excess of original projections.

“The implication is that the $500,000 cost is to help pay for special events, public artwork and the Cube… the public art and Cube are not new additions to the Railyard,” Duffy wrote. “These are not out-of-budget purchases. These were major selling points to the entire concept and should have (c’mon, you know they were) been in the budget.”

He noted historic preservation guidelines and Nebraska liquor laws prohibit his bar from having alcohol beverage sign sponsors, while the City Council exempted the Railyard from the city’s sign ordinance and allowed two large signs identifying the area.

Duffy said WRK was allowed to bypass local laws and display sponsored signs, putting other Haymarket bars at a competitive disadvantage.

“I do not know the details of the WRK agreement with the city of Lincoln but I would be surprised to learn that if the situation was reversed (and) WRK was making more money than expected, Lincoln would benefit from that surplus,” he wrote. “WRK needs to weather this storm and either cut expenses, find ways to raise revenue or both.”

Duffy said he could show he’s had more than $500,000 in audited costs to his business, even though his bar is much smaller than the Railyard.

“Please let us know who we talk to at city hall about getting our sign approved,” he wrote.

WRK officials were not available for comment.

Hallie Salem, community development specialist for the city’s urban development department, has said allowing sponsorships of the Railyard would help ensure its viability.

In a statement provided to Nebraska Watchdog by the mayor’s office, Salem said while negotiating the redevelopment agreement with WRK, both saw the benefit of a private company operating and programming a quasi-public plaza and Cube. While the city contributed to the design and construction, it’s not contributing to the operating expense, so WRK must find ways to support public art and programming on the Cube and in the plaza.

WRK’s redevelopment agreement with the city specifies that the primary purpose of the Cube is to serve as a digital canvas for motion graphic and still picture art, with a requirement that it be used as an art installation at least 51 percent of the time it’s in use.

Under the redevelopment agreement, advertising was supposed to be limited to sponsors of special events, for no more than five minutes per hour. Half the money goes toward the Cube’s operation, maintenance and artist fees and the other half goes to the event organizer.

Salem said the cost to program and operate the plaza and Cube is higher than anticipated, and allowing sponsorships would help offset those costs.

“The plaza and the Cube would continue to operate the majority of the time for the benefit of the general public without any additional public funds,” Salem said.

Despite that expectation the Cube will be used for art most of the time, Salem said “development of the art is still in process” so it’s possible WRK isn’t meeting that threshold. A contract with a Lincoln art studio, Outpost 12, is about 70 percent complete (a portion of the artwork can be seen here), she said, and WRK is working with the Sheldon Museum of Art to develop a process for curating art on the Cube.

“As the Outpost 12 and Sheldon pieces near completion, the developer will be expected to meet the primary purpose of the Cube,” Salem said. “It is in the best interest of the developer to meet the terms of the redevelopment agreement.”

Salem noted that city staffers regularly attend arena events and patronize Railyard businesses when the Cube is used, and if WRK continues to increase the percentage of art aired on the Cube, it should soon meet its obligation to use the Cube for art 51 percent of the time.

Contact Deena Winter at deena@nebraskawatchdog.org. Follow Deena on Twitter at @DeenaNEWatchdog

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