New Orleans has plenty of pressing needs as it struggles to recover from Hurricane Katrina, but new trash cans surely don't belong on the list.
The city just bought new trash cans three years ago, and there is plenty to criticize about that deal. The 600 receptacles, which cost $450,000, were bought through a no-bid contract, even though trash cans that provide advertising are typically free to cities, which usually get a share of the ad revenue. What's more, the company that supplied them, Niche Marketing USA, acknowledged a business connection with Terrence Rice, brother of then-Chief Administrative Office Charles Rice -- a relationship that the Rices deny.
But even though the purchase was plainly a bad business move, the trash cans -- touted as bomb-proof -- certainly hadn't worn out this quickly.
That's why it's hard to understand the Nagin administration's decision to get rid of them and spend $335,000 for 500 new wrought-iron trash cans. Sanitation Director Veronica White says she wants to get another 500 if the City Council gives her a large enough budget to do so, which would mean a whopping $670,000 for new trash cans.
The replacements might be more attractive than the receptacles that Mayor Nagin now mocks as "little munchkin trash cans." But if a concern for aesthetics is the driving force here, the administration should be able to find much better uses for the money.
There's a real danger, for example, that New Orleans could lose its distinctive appearance and history to the wrecking ball if salvageable homes and businesses are torn down. Why not give the New Orleans Redevelopment Authority some additional money to hire staff to clear titles of blighted properties so that they can be returned to commerce?
For $335,000, the city could hire additional building inspectors to meet the demand as more and more people rebuild and renovate their flood-damaged homes. The Nagin administration has also promised to add safeguards to prevent unwarranted demolitions, including a final review 48 hours before a teardown is scheduled. That's an important protection, but it's bound to add to the work load.
New Orleans doesn't need a trash can makeover, and the city should have better sense than to waste scarce resources in the midst of recovery.
Showing posts with label garbage cans. Show all posts
Showing posts with label garbage cans. Show all posts
Monday, February 18, 2008
Friday, March 23, 2007
Garbage Cans, Charles Rice -- Times Picayune Nov. 7, 2004
November 7, 2004 Sunday
SECTION: NATIONAL; Pg. 1
LENGTH: 2064 words
HEADLINE: Trash bin contract smells, some say;
No-bid deal in N.O. raises questions
BYLINE: By Gordon Russell, Staff writer
BODY:
A no-bid deal that gives a New Orleans firm the exclusive right to sell advertising on hundreds of city-owned trash cans in the Central Business District has raised eyebrows among others in the industry, who wonder why they weren't given a chance to compete for the potentially lucrative job.
Moreover, the company selling the ads and supplying the cans, Niche Marketing USA, had a business relationship with Terrence Rice, the brother of New Orleans Chief Administrative Officer Charles Rice, at the time the deal was announced, according to the company president. The company's chief executive later denied that Terrence Rice had worked with Niche.
City officials have been tight-lipped about the deal, refusing on numerous occasions during the past three months to answer basic questions about it. They say they have no paperwork on the arrangement because it is technically a subcontract between Niche Marketing and Waste Management, the city's trash collector, which buys the receptacles, known as "Jazzy Cans," from Niche at the city's direction.
The Nagin administration's reluctance to provide details on the matter has been unusual, given the aggressive stance the mayor has taken against patronage and in favor of transparency in the awarding of city contracts.
According to Charles Rice, Niche representatives had demonstrated the cans, purported to be bombproof, to him and other city officials. Along with the antiterrorism feature, the cans also contain four panels to display advertising.
City officials were impressed, Rice said, and so far have ordered Waste Management to buy 600 from Niche Marketing, using money donated by private companies to the mayor's "Imagine It Clean" campaign. The cans, which are not manufactured by Niche, cost $750 apiece, for a total of $450,000, Rice said.
Though the cans belong to the city, Rice said the city has no written agreement or contract with Niche Marketing on the company's exclusive franchise to sell advertising on them. However, he said the city does have a letter in which Niche promises to give 15 percent of its ad revenue to the city.
City officials have yet to provide the letter to The Times-Picayune, though the newspaper submitted a public-records request in August asking for all contracts and agreements between the city and the company. City officials also did not respond to a request for information about how much revenue the city has earned from the arrangement. Relatively few ads appear to have been sold so far.
Mixed messages
Charles Rice declined to directly answer questions about whether his brother had a relationship with Niche Marketing.
"That's something you would have to ask my brother about," Charles Rice said. "But I think you've spoken to Niche, and I think they've given you that answer."
Terrence Rice has not responded to numerous e-mails and phone messages.
Shortly after the cans were unveiled at a Nagin news conference in July, a receptionist at Niche Marketing answered a reporter's call asking for Terrence Rice by saying she would take a message for him.
In a later conversation, company President Stacey Mays-Douglas said Terrence Rice "no longer works here."
When asked what job Rice had performed, Mays-Douglas answered: "He was simply selling advertising. His goal was to sell ads on the Jazzy Cans."
Not long afterward, Kerry Brown, the firm's attorney, called The Times-Picayune and said Mays-Douglas "may have been mistaken." He said Terrence Rice "had been utilizing office space" leased by Niche but "has not received a penny from Niche."
He added that "there is no employer-employee relationship" between the company and Terrence Rice, and that Rice "has not received a paycheck, directly or indirectly." Brown described Rice as a "jack-of-all-trades."
Later, Niche CEO Rodney Whitney, who founded the firm, categorically and vehemently denied that Rice had any ties to the company.
"Terrence Rice has no relationship with Niche. He has never had a relationship with Niche," Whitney said.
Asked why the company's No. 2 official had said otherwise, Whitney said: "I don't know why she told you that. Evidently, you weren't talking to the right person."
'Imagine It Clean'
When asked why the city did not go through a bid process or a request for proposals to buy the new cans or to select an advertising vendor, Rice said a bid process was unnecessary and would have been unfair to Niche. He said the city's contract with Waste Management allows the city to direct the trash hauler to buy garbage cans and does not require a bid process.
The money for the cans came from the "Imagine It Clean" campaign, which Nagin's press office describes as a public-private initiative. Money for the effort had been donated by private companies, including $150,000 from Harrah's and $50,000 apiece from Waste Management and from Browning-Ferris International, another major trash hauler.
Technically, Waste Management has bought the cans at the city's direction, and then been reimbursed by the city, Rice said. A similar process was used for 508 new cans, costing $675 apiece, in the French Quarter and along St. Charles Avenue.
Waste Management bought those cans through Celtic Distributors, a company run by James "Dutchie" Connick, who is a lobbyist for Waste Management and also is the brother of Jefferson Parish District Attorney Paul Connick Jr. In that case, city officials apparently did not order Waste Management to buy cans from a specific vendor.
Rice added that when Marc Morial was mayor, the city was buying cans through Waste Management that cost $1,000 apiece, so the new cans represent a substantial savings.
Chuck Dees, area vice president for Waste Management, said his company had purchased a large number of concrete-based cans, adorned with the "Mayor's Clean Team" logo, for $490 apiece through Dutchie Connick. The company also bought a smaller number of fancier cans for the French Quarter at $840 apiece under the direction of the Morial administration, Dees said.
The Nagin administration did not respond to questions about which cans cost $1,000 apiece.
Lawsuit against Niche
When asked if a bid process might have resulted in a better price, Rice said he wanted the cans marketed by Niche, which he said embodied "patented technology" making them bombproof. Niche is the exclusive distributor of such cans in Louisiana, he said.
Rice said he took Niche officials at their word that they were the sole providers of such cans. Niche also "showed me a patent," Rice said, though the company's attorney said Niche has yet to receive a patent.
Rice said it would have been unfair to seek bids to select an advertising vendor because the idea of putting ads on trash cans was Niche's.
"Look at this realistically," Rice said. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."
However, a federal lawsuit against Niche filed last month by City Media Concepts, a company based in New York City, alleges that Niche parroted the design and concept of City Media Concepts, which has placed similar cans in Times Square.
The suit claims a violation of City Media's "trade dress" and trademark. In a nutshell, that means that the company has pioneered a trash can with a certain look and features, much in the way that McDonald's restaurants have certain looks and features, said Andy Langsam, City Media's attorney.
"You and I could not open a hamburger chain and call it McDougal's," Langsam said. "Or, if we called it Sam and Andy's, but it had golden arches, they'd stop us, too."
The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.
As evidence for its claim, City Media pointed to Niche's Web site, which used language strikingly similar to that used by City Media to pitch its product.
In a letter to Niche, Langsam demanded changes to the site owing to its "blatantly copied portions of our client's copyrighted materials."
As an example, the letter noted that City Media's Web site described its cans this way: "Crafted of heavy steel and weighing over 325 pounds, the Receptasign kiosk's sleek frame houses an outsized 45-gallon container that discreetly hides greater quantities of unsightly refuse."
Niche's site until recently described its cans like this: "Crafted of heavy metal and cement weighing more than 900 pounds, 'Jazzy Cans' have a 39.9 gallon container area, and a dome top that discreetly covers large quantities of unsightly refuse."
Said Langsam: "That told us that they knew of us, they copied us, this wasn't accidental."
Redesigned
Niche's Web site was redesigned shortly after the company received the letter from Langsam. Kerry Brown, the firm's attorney, said he suggested the changes after receiving the letter because he always advises clients to try to work out disagreements amicably rather than get bogged down in costly litigation.
"I want to get rid of any and all possibility that we did something wrong, because we didn't," he said.
Brown said the suit is baseless and promised that it will be dismissed within a week. He said Niche's cans differ substantially from City Media's because they are bombproof rather than bomb-resistant. He said the company has applied for but not yet received a patent.
"City Media does not have a mitigating can, a can that's capable of absorbing explosions," Brown said. "That's what Niche brought to the city. And City Media didn't see that."
Brown said he and Langsam had already agreed in principle to a settlement that essentially would involve City Media dropping the case. He said he couldn't discuss the exact terms.
But Langsam gave a different version. He said Brown had called him, explained that Niche, which was sued in federal court in North Carolina earlier this year in an unrelated action, could not afford to defend another suit. Brown wanted to discuss a settlement, Langsam said.
Langsam said he agreed to drop the claim only if Niche either agrees to remove all the trash cans from New Orleans' streets within two months, or pays City Media a licensing fee for each one. He would not disclose an amount.
Brown said he disagreed with Langsam's version of events but declined to offer his own.
"He's not going to get what he's asking for," Brown said.
Other companies irked
City Media is not the only company taken aback at the appearance of Jazzy Cans on New Orleans' streets.
Representatives of several companies that produce and sell display advertising said they would have welcomed a chance to bid for the right to sell ads on the garbage cans, but there was apparently no bid process to purchase the cans or sell advertising space on them.
"We did not receive an RFP (request for proposals) or anything," said Jodi Senese, a spokeswoman for Viacom, a major player in the outdoor advertising market.
Asked whether the company would have bid given the chance, Senese said: "It's in line with our business. It is an out-of-home advertising product, and we're in the out-of-home advertising business. We would have evaluated it and made a decision based on that."
Several other companies in the outdoor advertising business said they, too, would have welcomed a chance to compete. But none wanted to speak on the record for fear of hurting their chances of getting future city business.
It's possible the city could have gotten a better deal had it sought bids for the job.
Peter Arbor, vice president of operations for City Media, characterized Niche's arrangement in New Orleans as a sweetheart deal.
City Media pays for the cans it provides in New York, Arbor said, and also continues to own and maintain them around the clock, with crews that come out hourly to wipe the cans off so the advertising remains visible. That's not cheap, he said.
City Media shares 10 percent of its ad revenue with New York City, he said.
By comparison, New Orleans must buy and maintain the cans Niche provides. And although the city gets 15 percent of the ad revenue, the extra 5 percent doesn't nearly cover the other costs, Arbor said.
"It appears on the surface that it's a very good deal for Niche," Arbor said.
But Brown said Niche's cans are of far better quality and thus far more expensive than City Media's. Also, it's unfair to compare the advertising markets in New Orleans and New York City.
"They get tons more for advertising," he said. "You're comparing Times Square to Poydras Street."
. . . . . . .
SECTION: NATIONAL; Pg. 1
LENGTH: 2064 words
HEADLINE: Trash bin contract smells, some say;
No-bid deal in N.O. raises questions
BYLINE: By Gordon Russell, Staff writer
BODY:
A no-bid deal that gives a New Orleans firm the exclusive right to sell advertising on hundreds of city-owned trash cans in the Central Business District has raised eyebrows among others in the industry, who wonder why they weren't given a chance to compete for the potentially lucrative job.
Moreover, the company selling the ads and supplying the cans, Niche Marketing USA, had a business relationship with Terrence Rice, the brother of New Orleans Chief Administrative Officer Charles Rice, at the time the deal was announced, according to the company president. The company's chief executive later denied that Terrence Rice had worked with Niche.
City officials have been tight-lipped about the deal, refusing on numerous occasions during the past three months to answer basic questions about it. They say they have no paperwork on the arrangement because it is technically a subcontract between Niche Marketing and Waste Management, the city's trash collector, which buys the receptacles, known as "Jazzy Cans," from Niche at the city's direction.
The Nagin administration's reluctance to provide details on the matter has been unusual, given the aggressive stance the mayor has taken against patronage and in favor of transparency in the awarding of city contracts.
According to Charles Rice, Niche representatives had demonstrated the cans, purported to be bombproof, to him and other city officials. Along with the antiterrorism feature, the cans also contain four panels to display advertising.
City officials were impressed, Rice said, and so far have ordered Waste Management to buy 600 from Niche Marketing, using money donated by private companies to the mayor's "Imagine It Clean" campaign. The cans, which are not manufactured by Niche, cost $750 apiece, for a total of $450,000, Rice said.
Though the cans belong to the city, Rice said the city has no written agreement or contract with Niche Marketing on the company's exclusive franchise to sell advertising on them. However, he said the city does have a letter in which Niche promises to give 15 percent of its ad revenue to the city.
City officials have yet to provide the letter to The Times-Picayune, though the newspaper submitted a public-records request in August asking for all contracts and agreements between the city and the company. City officials also did not respond to a request for information about how much revenue the city has earned from the arrangement. Relatively few ads appear to have been sold so far.
Mixed messages
Charles Rice declined to directly answer questions about whether his brother had a relationship with Niche Marketing.
"That's something you would have to ask my brother about," Charles Rice said. "But I think you've spoken to Niche, and I think they've given you that answer."
Terrence Rice has not responded to numerous e-mails and phone messages.
Shortly after the cans were unveiled at a Nagin news conference in July, a receptionist at Niche Marketing answered a reporter's call asking for Terrence Rice by saying she would take a message for him.
In a later conversation, company President Stacey Mays-Douglas said Terrence Rice "no longer works here."
When asked what job Rice had performed, Mays-Douglas answered: "He was simply selling advertising. His goal was to sell ads on the Jazzy Cans."
Not long afterward, Kerry Brown, the firm's attorney, called The Times-Picayune and said Mays-Douglas "may have been mistaken." He said Terrence Rice "had been utilizing office space" leased by Niche but "has not received a penny from Niche."
He added that "there is no employer-employee relationship" between the company and Terrence Rice, and that Rice "has not received a paycheck, directly or indirectly." Brown described Rice as a "jack-of-all-trades."
Later, Niche CEO Rodney Whitney, who founded the firm, categorically and vehemently denied that Rice had any ties to the company.
"Terrence Rice has no relationship with Niche. He has never had a relationship with Niche," Whitney said.
Asked why the company's No. 2 official had said otherwise, Whitney said: "I don't know why she told you that. Evidently, you weren't talking to the right person."
'Imagine It Clean'
When asked why the city did not go through a bid process or a request for proposals to buy the new cans or to select an advertising vendor, Rice said a bid process was unnecessary and would have been unfair to Niche. He said the city's contract with Waste Management allows the city to direct the trash hauler to buy garbage cans and does not require a bid process.
The money for the cans came from the "Imagine It Clean" campaign, which Nagin's press office describes as a public-private initiative. Money for the effort had been donated by private companies, including $150,000 from Harrah's and $50,000 apiece from Waste Management and from Browning-Ferris International, another major trash hauler.
Technically, Waste Management has bought the cans at the city's direction, and then been reimbursed by the city, Rice said. A similar process was used for 508 new cans, costing $675 apiece, in the French Quarter and along St. Charles Avenue.
Waste Management bought those cans through Celtic Distributors, a company run by James "Dutchie" Connick, who is a lobbyist for Waste Management and also is the brother of Jefferson Parish District Attorney Paul Connick Jr. In that case, city officials apparently did not order Waste Management to buy cans from a specific vendor.
Rice added that when Marc Morial was mayor, the city was buying cans through Waste Management that cost $1,000 apiece, so the new cans represent a substantial savings.
Chuck Dees, area vice president for Waste Management, said his company had purchased a large number of concrete-based cans, adorned with the "Mayor's Clean Team" logo, for $490 apiece through Dutchie Connick. The company also bought a smaller number of fancier cans for the French Quarter at $840 apiece under the direction of the Morial administration, Dees said.
The Nagin administration did not respond to questions about which cans cost $1,000 apiece.
Lawsuit against Niche
When asked if a bid process might have resulted in a better price, Rice said he wanted the cans marketed by Niche, which he said embodied "patented technology" making them bombproof. Niche is the exclusive distributor of such cans in Louisiana, he said.
Rice said he took Niche officials at their word that they were the sole providers of such cans. Niche also "showed me a patent," Rice said, though the company's attorney said Niche has yet to receive a patent.
Rice said it would have been unfair to seek bids to select an advertising vendor because the idea of putting ads on trash cans was Niche's.
"Look at this realistically," Rice said. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."
However, a federal lawsuit against Niche filed last month by City Media Concepts, a company based in New York City, alleges that Niche parroted the design and concept of City Media Concepts, which has placed similar cans in Times Square.
The suit claims a violation of City Media's "trade dress" and trademark. In a nutshell, that means that the company has pioneered a trash can with a certain look and features, much in the way that McDonald's restaurants have certain looks and features, said Andy Langsam, City Media's attorney.
"You and I could not open a hamburger chain and call it McDougal's," Langsam said. "Or, if we called it Sam and Andy's, but it had golden arches, they'd stop us, too."
The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.
As evidence for its claim, City Media pointed to Niche's Web site, which used language strikingly similar to that used by City Media to pitch its product.
In a letter to Niche, Langsam demanded changes to the site owing to its "blatantly copied portions of our client's copyrighted materials."
As an example, the letter noted that City Media's Web site described its cans this way: "Crafted of heavy steel and weighing over 325 pounds, the Receptasign kiosk's sleek frame houses an outsized 45-gallon container that discreetly hides greater quantities of unsightly refuse."
Niche's site until recently described its cans like this: "Crafted of heavy metal and cement weighing more than 900 pounds, 'Jazzy Cans' have a 39.9 gallon container area, and a dome top that discreetly covers large quantities of unsightly refuse."
Said Langsam: "That told us that they knew of us, they copied us, this wasn't accidental."
Redesigned
Niche's Web site was redesigned shortly after the company received the letter from Langsam. Kerry Brown, the firm's attorney, said he suggested the changes after receiving the letter because he always advises clients to try to work out disagreements amicably rather than get bogged down in costly litigation.
"I want to get rid of any and all possibility that we did something wrong, because we didn't," he said.
Brown said the suit is baseless and promised that it will be dismissed within a week. He said Niche's cans differ substantially from City Media's because they are bombproof rather than bomb-resistant. He said the company has applied for but not yet received a patent.
"City Media does not have a mitigating can, a can that's capable of absorbing explosions," Brown said. "That's what Niche brought to the city. And City Media didn't see that."
Brown said he and Langsam had already agreed in principle to a settlement that essentially would involve City Media dropping the case. He said he couldn't discuss the exact terms.
But Langsam gave a different version. He said Brown had called him, explained that Niche, which was sued in federal court in North Carolina earlier this year in an unrelated action, could not afford to defend another suit. Brown wanted to discuss a settlement, Langsam said.
Langsam said he agreed to drop the claim only if Niche either agrees to remove all the trash cans from New Orleans' streets within two months, or pays City Media a licensing fee for each one. He would not disclose an amount.
Brown said he disagreed with Langsam's version of events but declined to offer his own.
"He's not going to get what he's asking for," Brown said.
Other companies irked
City Media is not the only company taken aback at the appearance of Jazzy Cans on New Orleans' streets.
Representatives of several companies that produce and sell display advertising said they would have welcomed a chance to bid for the right to sell ads on the garbage cans, but there was apparently no bid process to purchase the cans or sell advertising space on them.
"We did not receive an RFP (request for proposals) or anything," said Jodi Senese, a spokeswoman for Viacom, a major player in the outdoor advertising market.
Asked whether the company would have bid given the chance, Senese said: "It's in line with our business. It is an out-of-home advertising product, and we're in the out-of-home advertising business. We would have evaluated it and made a decision based on that."
Several other companies in the outdoor advertising business said they, too, would have welcomed a chance to compete. But none wanted to speak on the record for fear of hurting their chances of getting future city business.
It's possible the city could have gotten a better deal had it sought bids for the job.
Peter Arbor, vice president of operations for City Media, characterized Niche's arrangement in New Orleans as a sweetheart deal.
City Media pays for the cans it provides in New York, Arbor said, and also continues to own and maintain them around the clock, with crews that come out hourly to wipe the cans off so the advertising remains visible. That's not cheap, he said.
City Media shares 10 percent of its ad revenue with New York City, he said.
By comparison, New Orleans must buy and maintain the cans Niche provides. And although the city gets 15 percent of the ad revenue, the extra 5 percent doesn't nearly cover the other costs, Arbor said.
"It appears on the surface that it's a very good deal for Niche," Arbor said.
But Brown said Niche's cans are of far better quality and thus far more expensive than City Media's. Also, it's unfair to compare the advertising markets in New Orleans and New York City.
"They get tons more for advertising," he said. "You're comparing Times Square to Poydras Street."
. . . . . . .
Garbage Cans, Rice -- Times Picayune Jan. 18, 2005
January 18, 2005 Tuesday
Correction Appended
SECTION: NATIONAL; Pg. 1
LENGTH: 2204 words
HEADLINE: City's trash bin contract called wasteful;
Other firms say they can do more for less
BYLINE: By Gordon Russell, Staff writer
BODY:
As part of a no-bid deal with a local advertising company that enjoys close ties to the Nagin administration, the city of New Orleans paid $450,000 for garbage cans similar to those that competing businesses routinely provide for free.
Representatives of at least three companies that sell advertising on trash cans like those now dotting the streets of New Orleans say they would have been eager to provide the cans at no cost in exchange for the right to sell the ads that go in panels on the four-sided bins. To boot, two of the three said they also would have given the city a bigger piece of the ad revenue than the 15 percent the city is getting from the company that got the deal, Niche Marketing USA.
Nagin's chief administrative officer, Charles Rice, defended the city's decision to buy the cans, saying among other things that bidding would have been unfair to Niche, which he said submitted to the city the idea of advertising on cans.
But one of the three companies that said it would have provided the cans for free, Verres Media, submitted a proposal about two years ago that mentioned its ability to provide cans with advertising. At the time, however, the city was looking for a wide-ranging branding and marketing strategy, not trash cans, and the bid was overlooked.
Had the city gone out to bid on the trash cans, Verres officials said they would have resubmitted their previous offer, which would have saved the city $450,000 up front, and likely generated more money down the road.
And had the city entertained bids other than the one from Niche Marketing, it also would have heard from Eyeball Media, based in Atlanta, according to that firm's president, Richard Mashburn, who called Niche's contract "a sweetheart deal."
Eyeball provides similar cans with advertising to the city of Atlanta as well as private businesses. The company pays for the cans, maintains them and shares anywhere from 15 percent to 25 percent of the ad revenue with the client. Typically, cities get 25 percent, Mashburn said.
Mashburn, who checked out Niche's cans on a recent trip to New Orleans, said he intends to send a letter to city officials offering to help sell ads and giving the city a 25 percent cut.
"The way I look at it, the more the merrier," Mashburn said. "We would love the opportunity to come down there and sell."
City Media Concepts, a firm based in New York City that makes advertising cans similar to those the city bought from Niche, also provides and maintains similar receptacles at no cost. The firm typically shares 10 percent of its revenue.
Better terms from other vendors isn't the only problem rivals are finding with the Niche deal. City Media filed a federal lawsuit against Niche in October alleging that Niche's cans parroted City Media's design and concept. The suit says City Media's "trade dress" and trademark have been violated -- in essence, that Niche appropriated a trash can with a certain look and features that were pioneered by City Media.
The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.
City Media officials have said they would allow Niche to keep its cans on the street if the company paid an unspecified licensing fee. Niche officials have countered that the case has no merit. No trial date has been set.
Instead of conducting a bid process, the city opted to deal exclusively with Niche, which has ties to the brother of Chief Administrative Officer Charles Rice as well as to a lawyer who worked for Rice when he was city attorney.
Not only has the city paid for the cans -- which, at $750 a pop, have cost a total of $450,000 -- but Niche is forking over only 15 percent of the revenue from its sales, which so far have been less than brisk.
The city recently received the first of the royalty checks that are supposed to arrive twice a year. The total: $5,969. At the current pace, it will take the city 38 years to recoup its investment.
It is unknown how many ads the company sold to make that figure. Niche Chief Executive Officer Rodney Whitney refused to answer questions, but sales appear very slow: It is difficult to find any ads that are not "house ads": those that promote cleanliness, a donor to the "Imagine It Clean" campaign or Niche itself.
In Atlanta, Mashburn said he has been able to fill 63 percent of his ad space in nine months. If his company had access to the 600 cans in New Orleans and was able to sell ads at similar rates and at a similar pace, New Orleans would receive a check totaling almost $100,000 every six months.
Mashburn also noted that the city's decision to finance the purchase of the cans may have contributed to the slow pace of sales because Niche isn't on the hook for any real costs.
"If everything's coming out of your own pocket, you've got a real incentive to sell," Mashburn said. "Otherwise, you die."
When Christian Nardi of Verres Media saw the new trash cans popping up all over downtown New Orleans, he got a queasy feeling. That was my idea, he thought. When he learned about the terms the city had settled on, the queasiness turned to anger.
"I thought I got the shaft," Nardi said. "I felt like all the work I did on the proposal was for the city to take my idea and give it to someone else."
Verres' proposal, presented in early 2003 in response to a call by the Nagin administration for marketing ideas, centered on "traffic channelers," barricades with advertising used in airports and on outdoor walkways to steer pedestrians.
The process drew five responses, none of which the city pursued.
Verres' proposal also featured a picture of a trash can with four ad panels similar to those the city began buying from Niche last summer, and noted that the company could provide them as well.
Nardi said he made clear to city officials that the cans would be made available to the city under the same terms he offered for the traffic channelers. His terms: Give the cans to the city for free, maintain them and give the city 40 percent of the revenue from ad sales.
Nardi said he and an uncle who is his business partner "were both in awe of the idea that teachers are buying their own paper and books for students, and meanwhile the city is spending $750 apiece on trash cans that we offered the city for free."
But officials in the Nagin administration vigorously dispute elements of Nardi's account. In particular, they say, Nardi emphasized channelers, not trash cans, and that he never explained in writing the terms under which he could provide the cans.
"I read through every one of those proposals in exhaustive detail, and I would never remember he presented trash cans," said marketing director Matt Konigsmark, who coordinated the request for proposals for branding ideas. Konigsmark was not involved in last year's procurement of the trash cans.
"It is clearly an afterthought," Konigsmark added. "This whole proposal is focused on channelers, and then there's one page that said, 'Oh, by the way, we can do this.' There are 20 pages in the book, and 19 of them were on the channelers."
A review of the document shows that the garbage cans are indeed mentioned only in passing. The proposal also does not state that the financial terms would be the same as for the channelers.
But Nardi said he mentioned the garbage cans when he delivered the document to Konigsmark and made clear that the same terms would apply. Konigsmark said he does not recall such a conversation, and that even if it occurred, the members of the evaluation committee, which included Rice, would have relied on the written proposal to make its decisions.
"I certainly wasn't aware of the financial aspects of it," Konigsmark said. "He may have been willing to do it on those terms, but he didn't make that clear."
Konigsmark added that he read certain aspects of Nardi's proposal to mean that the city would have to help the company sell ads. "We're not really staffed to do that," he said.
Nardi said he was never expecting that kind of help. Rather, he wanted the city to assist in smaller ways, such as giving the company a letter it could use when soliciting potential customers.
"We wanted an endorsement," Nardi said. "We wanted their contacts, not for them to help us sell."
Rice has publicly defended the decision not to seek a better deal for the city through competitive bidding. After all, he said, the idea of trash cans with advertising on them occurred to him only because Niche representatives gave him and other city officials a demonstration of the cans, purported to be "bombproof."
In fact, that anti-terrorism feature makes the cans different from the cans that Niche's competitors offer for free, Rice said through a spokeswoman. But even if Niche's cans cost more than others, many of which claim only to be "bomb-
resistant," Niche's deal is unusual in that the company was not required to spend any money up front.
Rice said he was impressed with the cans and decided to have the city's trash collector, Waste Management, buy 600 of them, to be reimbursed by the city.
The pass-through arrangement freed Rice from having to follow public bid laws. Though he could have conducted one anyway, he said a bid process would have been unfair to Niche.
"Look at this realistically," Rice said in a November interview. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."
Last week, Rice took a slightly different tack, saying his decision to deal with Niche -- which is owned by an African-American, Whitney -- stemmed from a desire to fulfill the mayor's goal of nurturing minority-owned businesses.
"The mayor stated he wanted to increase and build the African-American middle class and to increase African-American entrepreneurship," Rice said. "This was a young, energetic African-American company, and in keeping with the mayor's vision, we decided to work with them."
But though Rice said the city's dealings with Niche are purely about promoting black business development, there are close connections between Rice and people affiliated with the company.
Terrence Rice, Charles Rice's brother, was working for the firm when the deal was announced, the company president said at the time. The company's chief executive later denied that Terrence Rice had worked with Niche.
Terrence Rice has not responded to questions about his relationship with the company. Charles Rice, meanwhile, refused to take questions on the matter, referring them to his brother and company officials.
In addition, Bobby Smith, whom Charles Rice hired as an assistant city attorney shortly after his own installation as city attorney in 2002, left City Hall in March 2004 and now works for Niche Marketing.
Smith's departure from City Hall, where he was earning $61,000, came about three weeks after Niche Marketing was incorporated, according to state records.
Nagin spokeswoman Tami Frazier said Rice was unaware of Smith's relationship with Niche. She also noted that Rice was not city attorney at the time of Smith's departure and said Rice had not kept track of him.
Asked whether he thought the purchase was a good one, Nagin said: "When I reviewed this transaction many months ago it looked like a good deal to me. I also recall this program being funded by private dollars. I have no other comments since I have not looked into the specifics in quite some time."
In fact, half the money spent on the cans came directly from the city's coffers. The other half came from the "Imagine It Clean" fund, which received large contributions from city contractors Waste Management, Browning-Ferris Industries and Harrah's New Orleans. The money was spent at the city's discretion.
The controversy about the cans goes beyond whether the deal was a cozy one. Some New Orleanians also are offended by the cans themselves.
City Councilwoman Jacquelyn Brechtel Clarkson, who represents the French Quarter and is generally a staunch ally of Nagin, wrote Sanitation Director Veronica White a letter in November asking that the so-
called "Jazzy Cans" be removed from the Quarter. Clarkson said she had received several complaints about the commercial cans.
White responded that the cans "represent part of the Mayor's 'Imagine it Clean' campaign and as such it is not at my discretion to remove them without his authority." White said she would forward Clarkson's request to the mayor.
Clarkson said she had not heard back from the mayor and doesn't expect to. "He has more important things to do," she said.
Clarkson's efforts were cheered by some Quarter activists who said the cans are out of place, only more so since they are often placed near ad-free trash cans that were hailed at the time of their installation, just a few years ago, for being good-looking receptacles adorned only with a fleur-de-lis.
Nathan Chapman, president of the French Quarter neighborhood group Vieux Carre Property Owners, Residents and Associates, lauded Clarkson for her efforts to rid the area of the newer, more commercial cans.
"We do feel they're not fitting within the historic ambiance of our city's most historic district," he said. "I just think the French Quarter is our showcase for the world, and it cheapens our image. Advertising on trash cans is not the symbol of the city that we ought to be putting out there."
CORRECTION:
Licensing contract awarded: An article in Tuesday's editions about a contract for downtown trash cans that display advertising erred in saying that the city of New Orleans had not picked a contractor to develop a separate sponsoring and licensing program for products and events bearing the city's imprimatur. In fact, the city last year awarded such a contract to a joint venture comprised of three firms: DD Marketing Inc. of Pueblo, Colo.; Trumpet LLC, a New Orleans advertising agency; and Rehage Entertainment Inc., a promotions company with offices in New Orleans and New York. (1/20/2005)
LOAD-DATE: March 12, 2005
Copyright 2004 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)
Correction Appended
SECTION: NATIONAL; Pg. 1
LENGTH: 2204 words
HEADLINE: City's trash bin contract called wasteful;
Other firms say they can do more for less
BYLINE: By Gordon Russell, Staff writer
BODY:
As part of a no-bid deal with a local advertising company that enjoys close ties to the Nagin administration, the city of New Orleans paid $450,000 for garbage cans similar to those that competing businesses routinely provide for free.
Representatives of at least three companies that sell advertising on trash cans like those now dotting the streets of New Orleans say they would have been eager to provide the cans at no cost in exchange for the right to sell the ads that go in panels on the four-sided bins. To boot, two of the three said they also would have given the city a bigger piece of the ad revenue than the 15 percent the city is getting from the company that got the deal, Niche Marketing USA.
Nagin's chief administrative officer, Charles Rice, defended the city's decision to buy the cans, saying among other things that bidding would have been unfair to Niche, which he said submitted to the city the idea of advertising on cans.
But one of the three companies that said it would have provided the cans for free, Verres Media, submitted a proposal about two years ago that mentioned its ability to provide cans with advertising. At the time, however, the city was looking for a wide-ranging branding and marketing strategy, not trash cans, and the bid was overlooked.
Had the city gone out to bid on the trash cans, Verres officials said they would have resubmitted their previous offer, which would have saved the city $450,000 up front, and likely generated more money down the road.
And had the city entertained bids other than the one from Niche Marketing, it also would have heard from Eyeball Media, based in Atlanta, according to that firm's president, Richard Mashburn, who called Niche's contract "a sweetheart deal."
Eyeball provides similar cans with advertising to the city of Atlanta as well as private businesses. The company pays for the cans, maintains them and shares anywhere from 15 percent to 25 percent of the ad revenue with the client. Typically, cities get 25 percent, Mashburn said.
Mashburn, who checked out Niche's cans on a recent trip to New Orleans, said he intends to send a letter to city officials offering to help sell ads and giving the city a 25 percent cut.
"The way I look at it, the more the merrier," Mashburn said. "We would love the opportunity to come down there and sell."
City Media Concepts, a firm based in New York City that makes advertising cans similar to those the city bought from Niche, also provides and maintains similar receptacles at no cost. The firm typically shares 10 percent of its revenue.
Better terms from other vendors isn't the only problem rivals are finding with the Niche deal. City Media filed a federal lawsuit against Niche in October alleging that Niche's cans parroted City Media's design and concept. The suit says City Media's "trade dress" and trademark have been violated -- in essence, that Niche appropriated a trash can with a certain look and features that were pioneered by City Media.
The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.
City Media officials have said they would allow Niche to keep its cans on the street if the company paid an unspecified licensing fee. Niche officials have countered that the case has no merit. No trial date has been set.
Instead of conducting a bid process, the city opted to deal exclusively with Niche, which has ties to the brother of Chief Administrative Officer Charles Rice as well as to a lawyer who worked for Rice when he was city attorney.
Not only has the city paid for the cans -- which, at $750 a pop, have cost a total of $450,000 -- but Niche is forking over only 15 percent of the revenue from its sales, which so far have been less than brisk.
The city recently received the first of the royalty checks that are supposed to arrive twice a year. The total: $5,969. At the current pace, it will take the city 38 years to recoup its investment.
It is unknown how many ads the company sold to make that figure. Niche Chief Executive Officer Rodney Whitney refused to answer questions, but sales appear very slow: It is difficult to find any ads that are not "house ads": those that promote cleanliness, a donor to the "Imagine It Clean" campaign or Niche itself.
In Atlanta, Mashburn said he has been able to fill 63 percent of his ad space in nine months. If his company had access to the 600 cans in New Orleans and was able to sell ads at similar rates and at a similar pace, New Orleans would receive a check totaling almost $100,000 every six months.
Mashburn also noted that the city's decision to finance the purchase of the cans may have contributed to the slow pace of sales because Niche isn't on the hook for any real costs.
"If everything's coming out of your own pocket, you've got a real incentive to sell," Mashburn said. "Otherwise, you die."
When Christian Nardi of Verres Media saw the new trash cans popping up all over downtown New Orleans, he got a queasy feeling. That was my idea, he thought. When he learned about the terms the city had settled on, the queasiness turned to anger.
"I thought I got the shaft," Nardi said. "I felt like all the work I did on the proposal was for the city to take my idea and give it to someone else."
Verres' proposal, presented in early 2003 in response to a call by the Nagin administration for marketing ideas, centered on "traffic channelers," barricades with advertising used in airports and on outdoor walkways to steer pedestrians.
The process drew five responses, none of which the city pursued.
Verres' proposal also featured a picture of a trash can with four ad panels similar to those the city began buying from Niche last summer, and noted that the company could provide them as well.
Nardi said he made clear to city officials that the cans would be made available to the city under the same terms he offered for the traffic channelers. His terms: Give the cans to the city for free, maintain them and give the city 40 percent of the revenue from ad sales.
Nardi said he and an uncle who is his business partner "were both in awe of the idea that teachers are buying their own paper and books for students, and meanwhile the city is spending $750 apiece on trash cans that we offered the city for free."
But officials in the Nagin administration vigorously dispute elements of Nardi's account. In particular, they say, Nardi emphasized channelers, not trash cans, and that he never explained in writing the terms under which he could provide the cans.
"I read through every one of those proposals in exhaustive detail, and I would never remember he presented trash cans," said marketing director Matt Konigsmark, who coordinated the request for proposals for branding ideas. Konigsmark was not involved in last year's procurement of the trash cans.
"It is clearly an afterthought," Konigsmark added. "This whole proposal is focused on channelers, and then there's one page that said, 'Oh, by the way, we can do this.' There are 20 pages in the book, and 19 of them were on the channelers."
A review of the document shows that the garbage cans are indeed mentioned only in passing. The proposal also does not state that the financial terms would be the same as for the channelers.
But Nardi said he mentioned the garbage cans when he delivered the document to Konigsmark and made clear that the same terms would apply. Konigsmark said he does not recall such a conversation, and that even if it occurred, the members of the evaluation committee, which included Rice, would have relied on the written proposal to make its decisions.
"I certainly wasn't aware of the financial aspects of it," Konigsmark said. "He may have been willing to do it on those terms, but he didn't make that clear."
Konigsmark added that he read certain aspects of Nardi's proposal to mean that the city would have to help the company sell ads. "We're not really staffed to do that," he said.
Nardi said he was never expecting that kind of help. Rather, he wanted the city to assist in smaller ways, such as giving the company a letter it could use when soliciting potential customers.
"We wanted an endorsement," Nardi said. "We wanted their contacts, not for them to help us sell."
Rice has publicly defended the decision not to seek a better deal for the city through competitive bidding. After all, he said, the idea of trash cans with advertising on them occurred to him only because Niche representatives gave him and other city officials a demonstration of the cans, purported to be "bombproof."
In fact, that anti-terrorism feature makes the cans different from the cans that Niche's competitors offer for free, Rice said through a spokeswoman. But even if Niche's cans cost more than others, many of which claim only to be "bomb-
resistant," Niche's deal is unusual in that the company was not required to spend any money up front.
Rice said he was impressed with the cans and decided to have the city's trash collector, Waste Management, buy 600 of them, to be reimbursed by the city.
The pass-through arrangement freed Rice from having to follow public bid laws. Though he could have conducted one anyway, he said a bid process would have been unfair to Niche.
"Look at this realistically," Rice said in a November interview. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."
Last week, Rice took a slightly different tack, saying his decision to deal with Niche -- which is owned by an African-American, Whitney -- stemmed from a desire to fulfill the mayor's goal of nurturing minority-owned businesses.
"The mayor stated he wanted to increase and build the African-American middle class and to increase African-American entrepreneurship," Rice said. "This was a young, energetic African-American company, and in keeping with the mayor's vision, we decided to work with them."
But though Rice said the city's dealings with Niche are purely about promoting black business development, there are close connections between Rice and people affiliated with the company.
Terrence Rice, Charles Rice's brother, was working for the firm when the deal was announced, the company president said at the time. The company's chief executive later denied that Terrence Rice had worked with Niche.
Terrence Rice has not responded to questions about his relationship with the company. Charles Rice, meanwhile, refused to take questions on the matter, referring them to his brother and company officials.
In addition, Bobby Smith, whom Charles Rice hired as an assistant city attorney shortly after his own installation as city attorney in 2002, left City Hall in March 2004 and now works for Niche Marketing.
Smith's departure from City Hall, where he was earning $61,000, came about three weeks after Niche Marketing was incorporated, according to state records.
Nagin spokeswoman Tami Frazier said Rice was unaware of Smith's relationship with Niche. She also noted that Rice was not city attorney at the time of Smith's departure and said Rice had not kept track of him.
Asked whether he thought the purchase was a good one, Nagin said: "When I reviewed this transaction many months ago it looked like a good deal to me. I also recall this program being funded by private dollars. I have no other comments since I have not looked into the specifics in quite some time."
In fact, half the money spent on the cans came directly from the city's coffers. The other half came from the "Imagine It Clean" fund, which received large contributions from city contractors Waste Management, Browning-Ferris Industries and Harrah's New Orleans. The money was spent at the city's discretion.
The controversy about the cans goes beyond whether the deal was a cozy one. Some New Orleanians also are offended by the cans themselves.
City Councilwoman Jacquelyn Brechtel Clarkson, who represents the French Quarter and is generally a staunch ally of Nagin, wrote Sanitation Director Veronica White a letter in November asking that the so-
called "Jazzy Cans" be removed from the Quarter. Clarkson said she had received several complaints about the commercial cans.
White responded that the cans "represent part of the Mayor's 'Imagine it Clean' campaign and as such it is not at my discretion to remove them without his authority." White said she would forward Clarkson's request to the mayor.
Clarkson said she had not heard back from the mayor and doesn't expect to. "He has more important things to do," she said.
Clarkson's efforts were cheered by some Quarter activists who said the cans are out of place, only more so since they are often placed near ad-free trash cans that were hailed at the time of their installation, just a few years ago, for being good-looking receptacles adorned only with a fleur-de-lis.
Nathan Chapman, president of the French Quarter neighborhood group Vieux Carre Property Owners, Residents and Associates, lauded Clarkson for her efforts to rid the area of the newer, more commercial cans.
"We do feel they're not fitting within the historic ambiance of our city's most historic district," he said. "I just think the French Quarter is our showcase for the world, and it cheapens our image. Advertising on trash cans is not the symbol of the city that we ought to be putting out there."
CORRECTION:
Licensing contract awarded: An article in Tuesday's editions about a contract for downtown trash cans that display advertising erred in saying that the city of New Orleans had not picked a contractor to develop a separate sponsoring and licensing program for products and events bearing the city's imprimatur. In fact, the city last year awarded such a contract to a joint venture comprised of three firms: DD Marketing Inc. of Pueblo, Colo.; Trumpet LLC, a New Orleans advertising agency; and Rehage Entertainment Inc., a promotions company with offices in New Orleans and New York. (1/20/2005)
LOAD-DATE: March 12, 2005
Copyright 2004 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)
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