SUBJECT: SEE BELOW DATE: October 12, 2016 SUBJECT: SUPERGRAPHICS; BILLBOARDS; DOWNTOWN SIGN INTENSIFICATION PROGRAM

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1 CED AGENDA: 10/24/16 ITEM: D (4) CITY OF, SAN JOSE CAPITAL OF SILICON VALLEY wutsrponmljihgfedcbaywvutsrponmlkjihgfedcba TO: COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE FROM: Harry Freitas Nanci Klein SUBJECT: SEE BELOW DATE: October 12, 2016 Approved ) Date yxwvutsrponmlihgfedcbatsrpoliedcb /D p/a SUBJECT: SUPERGRAPHICS; BILLBOARDS; DOWNTOWN SIGN INTENSIFICATION PROGRAM RECOMMENDATION Accept an informational report on the status of activities to investigate enabling super graphics, billboard signage in eligible citywide locations, and a downtown sign intensification program, and direct the staff to continue the work plan as described. OUTCOME Provide the Committee with information on the efforts to respond to the City Council interest in enabling signage opportunities that could generate revenue for the City and convey a vibrant urban environment by allowing installation of dynamic and contemporary signage on selected sites. BACKGROUND The City Council has provided direction to staff to consider signage initiatives in three geographic areas: 1) Supergraphic signs in Downtown and North San Jose; 2) New electronic billboards for off-site commercial advertising on City-owned and privately owned properties in the Downtown and citywide; and 3) Signage intensification in the Downtown to enliven the Downtown experience and generate revenue for public purpose This report provides an update regarding the status of these initiatives and a brief summary of the remaining work to be done.

2 Page 2 yxwvutsrponmlihgfedcbatsrpoliedcb Supergraphics Supergraphic signs are large banner signs consisting of flexible material attached flush to the face of a building. Title 23 of the San Jose Municipal Code (the Sign Code) regulations currently allow temporary banners up to a maximum of 1,200 square feet in size (sign area) for large Downtown buildings. Following installation of the "Oracle Building" sign during the 2016 Super Bowl, the City Council expressed interest in providing for the temporary display of this type of signage in Downtown and in North San Jose. The City Council subsequently directed staff to prepare a recommendation that would allow larger supergraphic signs. Billboards Billboards are large signs that display commercial off-site advertising (i.e., advertising for goods or services that are not necessarily provided on the billboard site). Electronic billboards are programmable electronic signs that utilize digital display screens to produce changeable messages involving still images or images that appear to move on the display screen. Current City policies, regulations, and other constraining factors to consider for allowing electronic billboards on City-owned or private property are summarized below: General Plan Policies. The Envision San Jose 2040 General Plan (General Plan) provides for consideration of new billboards through a discretionary process where they will not create visual blight and clutter, and encourages relocation of existing billboards from impacted areas to areas where they will have less visually blighting effect. The General Plan specifically prohibits billboards on freeways, rural scenic routes, grand boulevards, and scenic gateways. Sign Code. The current Sign Code prohibits new billboards and other off-site advertising (i.e., commercial advertising of products or services not sold on the site on which the sign is located). It provides for relocation of existing legal non-conforming billboards subject to specific parameters. Criteria for relocation sites preclude Neighborhood Business Districts, Redevelopment Areas, any area proposed for beautification or utility undergrounding, and priority areas for billboard removal, including the Downtown Core and major thoroughfares leading into the Downtown Core. Under the current Sign Code, relocated billboards may not be programmable electronic signs. Council Policy 6-4. This Council Policy (adopted in 1972) prohibits new billboards on City property. It specifies removal of existing billboards from City property within five years. Council Policy This Council Policy (adopted in 1986) specifies the public process for any private use of City property that is associated with the public use of that property

3 Page 3 (Site Permit) and for any private use of City property not associated with the public use of the property (Conditional Use Permit and possibly re-zoning). Other Limitations. Charter provisions governing park land, private activity constraints associated with bond funding, and lease and other contractual obligations may further limit or preclude billboard displays on specific City-owned sites. In addition, state and federal regulations govern the placement of billboards along freeways, primary arterials, and other transportation facilities. These regulations, which are multi-layered and complex, constrain where billboards and other signs can be located in San Jose. yxwvutsrponmlihgfedcbatsr Downtown Signage Intensification Program In Fall 2015, the City participated in the Silicon Valley Chamber of Commerce's Study Mission to Denver, Colorado. Participants were impressed by the presence of dynamic and unique signage in the Downtown Denver Theater District. The Executive Director of the Denver Theater District, a non-profit created in 2007 that administers signage opportunities with advertising companies on behalf of the City of Denver, shared information about the Denver Theater District signage program, which has generated substantial revenue for the City of Denver and private property owners, and is a source of funding for arts and cultural promotion and activation. Contemporary offsite commercial signage has been installed in Denver and other cities as a means to enliven city centers and potentially increase revenue opportunities for municipalities and private property owners. Currently, signs located in Downtown San Jose are regulated by Title 23 of the Municipal Code. Title 23 limits new signage to display only on-site activities. Over the past two months, staff has been collaborating with Denver Theater District staff to develop a sign intensification program that would enable more off-site signage opportunities in Downtown San Jose. The Downtown Sign Intensification's potential for revenue generation is unknown at this time. An equally important driver to pursue the Downtown Sign Intensification Program is to support high quality signage in Downtown, which will create a vibrant environment commensurate with great urban places. San Jose's revenue generation and quality signage potential will be better understood after the City receives information from media companies on signage opportunities and locations, including revenue opportunities, through a Request for Information process.

4 Page 4 ANALYSIS yxwvutsrponmlihgfedcbatsrpoliedcb Supergraphic Signs Staff is currently developing a recommendation for an ordinance that would allow on sitesupergraphic signs on certain buildings in the Downtown Sign Zone and the North San Jose Development Policy Area. Outreach meetings are scheduled for the week of October 17, 2016, to obtain input regarding supergraphic signs from a variety of stakeholders (including the Chamber of Commerce, the Downtown Association, and the Preservation Action Council of San Jose (PACSJ)) as well as the community at large, including companies and property owners. In addition, staff is exploring regulations of other cities and working with the Fire Department and Building Division to understand and address any life-safety issues associated with the installation of these large signs on building facades. Staff anticipates bringing a draft ordinance forward for consideration by the City Council in December of this year. Billboards Staff is now in the process of reviewing the tools and regulations other cities have used in permitting and obtaining revenue from new or relocated billboards and in identifying the relevant city, state, and federal regulations that control the location of new or relocated billboards along freeways, principal arterials, and other roadways. These endeavors include mapping the very complex and overlapping State and federal regulations in an effort to identify areas that may be eligible for new billboards. Staff is focusing initial efforts on identifying City-owned sites that meet state and federal regulatory requirements and have potential as billboard sites based on limitations related to City Charter requirements, private activity constraints, and contractual obligations. Once this analysis is complete, staff will develop recommendations regarding billboards on City-owned property for consideration by the City Council. Any provision for new billboards on City-owned property will require an amendment to the Sign Code, revision of City Council Policy 6-4, and related environmental (CEQA) clearance. Location of billboards on freeways, rural scenic routes, grand boulevards, or scenic gateways would also require an amendment to the text of the General Plan. Staff anticipates completing additional public outreach and bringing recommendations to the City Council in December Based on direction from Council, staff will prepare the necessary amendments to policies and the sign code and conduct CEQA review. As a second phase of the analysis, staff will explore opportunities for location of electronic billboards on private property and evaluate any potential for revenue generation from billboards on such property. This work is expected to be completed in early 2017.

5 Page 5 yxwvutsrponmlihgfedcbatsrpoliedcb Downtown Sign Intensification Program Staff is proposing a two phase work-plan, with the first phase focusing on enabling signage opportunities on City-owned properties and the second phase focusing on privately owned properties. Program Boundaries The Downtown Sign Intensification Program boundaries are proposed to be the same boundaries as described as the Downtown Growth Area in the General Plan. See attached map. Signage Opportunities and Limitations on City Properties 4 Although there are over 100 City-owned properties in Downtown, substantially fewer of those sites may be eligible for siting signage due to Charter provisions governing park land, private activity constraints associated with bond funding, lease and other contractual obligations, and state and federal regulations. In addition, some City-owned sites may not be desirable for signage due to size, location, visibility or other factors. City Properties Revenue Potential The City would receive revenue as a landlord from signage on City properties. While each opportunity is valued differently by media companies based on its unique market and potential impressions, the Arts and Venues Division of the City of Denver receives approximately $500,000 in annual revenue from all signage on City facilities in the Denver Theater District boundaries. This consists of revenue received from five medium-sized (9'xl6') LED signs, three static signs on a City-owned parking garage, and an aggregation of signs on the Colorado Convention Center highlighted by one large-sized (14'x48') LED sign. Responses to a San Jose issued Request for Information will provide additional information on revenue potential; however, specific signage opportunities would not be determined until after getting further direction from Council on a formal Request for Proposal (RFP) process and revenue generation would depend on the outcome of the RFP process. Program Public Benefits As in Denver and Atlanta, staff is recommending that a percentage of time on any allowed sign be allocated at no cost for public messaging or for the use of the digital displays to showcase art. The ability to leverage these marketing assets can be used to attract conventions, concerts, and other desirable events to locate in San Jose venues. Based on the Denver model, staff is also recommending that a percentage of any revenue that is generated by signs on City-owned property be used to administer the sign program as well as support public benefit improvements and activities in the Downtown Sign Intensification Program boundaries.

6 Page 6 Additional public benefits are expected based on the vibrancy that the signage program is expected to bring to downtown streets. The department that manages Denver's real estate assets in the Theater District stated that their belief that there was a reduction in vagrancy in the district due to the implementation of the sign program. yxwvutsrponmlihgfedcbatsrpoliedcb City Properties Timeline The next step will be to issue a Request for Information for City-owned properties in Downtown, which will occur in December. After staff reviews submissions to the RFI, it will evaluate information received and determine the format for administration of the Downtown Sign Intensification Program and whether the City or another nonprofit should administer the Program. Subsequently, pending Council approval, there will be a Request for Proposals released in the late winter/early spring of 2017 to determine which media firms will be selected to install and create advertisements. The Council will also be asked to adopt changes to the San Jose Municipal Code to remove applicable restrictions and to accept design guidelines for evaluating signs in the Program area. The target for installation of signage on eligible City properties is the Fall of Throughout the process, staff will engage with the resident, business, and larger stakeholder community in Downtown San Jose through presentations at roundtable or community meetings. Expansion of Program to Private Properties Staff will also continue to explore the opportunity to expand the Downtown Sign Intensification Program to private properties, in order to generate additional revenue to administer the sign program as well as implement public benefit improvements and activities in the Downtown Sign Intensification Program boundaries. Information received through the RFI process for Cityowned properties will be evaluated to assess the demand for signage opportunities in the District. Mapping the complex and overlapping State and federal regulations to identify areas that may be eligible for new billboards will also be used to strategically plan for any expansion of the program to private properties. EVALUATION AND FOLLOW UP Staff will return to Council in December 2016 with recommendations related to supergraphics and billboards on City-owned property. In early 2017, staff anticipates returning to Council with a recommendation on an RFP process for downtown sign intensification on City-owned properties and information on opportunities for location of electronic billboards on private property and evaluate any potential for revenue generation from billboards on such property.

7 Page 7 PUBLIC OUTREACH This memorandum will be posted on the City's website for the October 24, 2016, Community and Economic Development Committee meeting. COORDINATION This memorandum has been coordinated with the City Attorney's Office. CEOA This memorandum is an information report that is not a project pursuant to the California Environmental Quality Act. /s/ HARRY FREITAS Director of Planning, Building and Code Enforcement /s/ NANCI KLEIN Assistant Director of Economic Development For general questions, please contact Jenny Nusbaum, Supervising Planner, at (408) For questions about the Downtown Sign Intensification Program, please contact Reena Brilliot, Business Development Officer, at (408) Attachment Proposed Downtown Sign Intensification Area Map

SAN JOSE CAPITAL OF SILICON VALLEY

CED AGENDA: 04/24/17 ITEM: D (2) CITY OF SAN JOSE CAPITAL OF SILICON VALLEY Memorandum TO: COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE FROM: Harry Freitas Nanci Klein SUBJECT: SEE BELOW DATE: April 12,