Copyright 2005 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)
May 2, 2005 Monday
SECTION: NATIONAL; Pg. 1
LENGTH: 761 words
HEADLINE: New bids planned for trash can ads;
N.O. is after bigger slice of revenue pie
BYLINE: By Gordon Russell, Staff writer
Mayor Ray Nagin's administration plans to seek new bids in June for a controversial contract to sell advertising on hundreds of trash cans the city placed around town last year.
The no-bid contract now in place is held by Niche Marketing USA. Niche touted the cans as "bombproof" in convincing the mayor's "Imagine It Clean" campaign to mix city money and private donations and spend $450,000 on them. Niche also committed to sell ads on the sides of the cans and give City Hall a 15 percent cut of the revenue.
The controversy over the contract partly stemmed from ties between Niche and Charles Rice, Nagin's chief administrative officer, who recently issued a letter announcing the city's intention to seek new bids. When the deal was announced last summer, a Niche official said Rice's brother, Terrence Rice, worked there. Subsequently, the company's chief executive, Rodney Whitney Jr., denied that Terrence Rice was an employee.
Also, Niche employee Bobby Smith once worked for Charles Rice at the city attorney's office.
And the questions didn't end there.
While the city was buying 600 "Jazzy Cans" at $750 a pop, at least three competing businesses told The Times-Picayune that they routinely provide similar cans to cities for free in exchange for the right to sell ads on them. And two of the three said other client cities usually collect more of the proceeds than the 15 percent cut New Orleans settled for.
So far the city's return on its $450,000 investment has been paltry. The first of what are supposed to be biannual checks from Niche arrived in January. The total: $5,969. More than three months later, sales still appear to be sluggish.
Rice's letter said the city plans to issue a request for proposals for advertising sales by June 3, a few weeks before Niche's second royalty check is due. Beginning that same date, Niche "will no longer be authorized to sell advertising on the Jazzy Cans," the letter says.
However, the company isn't being fired outright. In a letter to Whitney, the ad firm's CEO, Rice encouraged Niche to submit a proposal.
In a written statement, Rice said he decided to seek bids "in an effort to be cost-efficient and provide better quality service to the citizens of New Orleans."
Rice also said the city has no plans at the moment to buy more cans "but will leave that open for the winning vendor to purchase cans if needed."
The decision to issue the request for bids comes two months after Richard Mashburn, president of Atlanta-based Eyeball Media, wrote to the city offering to sell ads on the trash cans. Mashburn, who has trash can advertising contracts in Atlanta, Memphis, Tenn., and other places, offered to sell the ads in New Orleans on a nonexclusive basis, meaning Niche could continue its own sales effort.
In the letter, Mashburn offered to give the city 25 percent of the money from the ads he sold, a sharp improvement on the 15 percent paid by Niche.
Mashburn has yet to receive a response to his letter. But he said he was encouraged by the city's willingness to seek fresh proposals and said he plans to bid.
"We're going to send a certified letter to Mr. Rice requesting that we be on the request for proposals list," he said. "We'll make a nice offer, one that's going to be hard to turn down."
Two other vendors in the trash can advertising business also said they're likely to enter bids.
Christian Nardi of Verres Media, who pitched the idea of selling ads on pedestrian "traffic channelers" or garbage cans in a 2003 proposal to the Nagin administration, said he'll probably bid.
Nardi's earlier proposal was in response to a request from the city for ways to make money through "branding" the city. Though that proposal focused on traffic channelers, it also made clear that his company could provide trash cans. The company was offering the city 40 percent of the revenue.
Meanwhile, City Media Concepts, which sells advertising on trash cans in New York's Times Square and elsewhere, will also likely bid on the New Orleans business, according to Vice President Peter Arbor.
When City Media became aware of Niche's New Orleans contract last year, it filed a "trade dress" suit against the local firm.
Essentially, the suit claimed that City Media pioneered a trash can with a certain look and features and that Niche had parroted it.
The suit has since been settled, said City Media's attorney, Andy Langsam, adding that the terms of the settlement are confidential.
Kerry Brown, Niche's attorney, did not return phone calls seeking comment.
. . . . . . .