Council approves digital large‑format signage leases at four city‑owned downtown sites amid public debate

The City Council approved lease agreements enabling installation of five large‑format digital signs on city‑owned properties in downtown San Jose, authorizing the city manager to finalize negotiated leases with Orange Barrel Media (OBM). The sites are the Center for the Performing Arts (two signs), McEnery Convention Center, Market In San Pedro Garage, and Second & San Carlos Garage.

The presentation traced a multi‑year process that began with a 2017 council direction to explore off‑site advertising on city property, an RFP process and two rounds of solicitations, and project‑level environmental review. Staff said the leases were structured as revenue‑share agreements with guaranteed minimum rents; the negotiated minimums are about 25% higher than the bidder's initial proposal. The minimum guaranteed rent across the four leases for a 20‑year term is about $21.4 million; OBM's revenue projections estimate $37.5 million over the full term.

City value in the deal includes a substantial allotment of time for city‑controlled messaging. Council packets and staff said the negotiated lease terms start with 15% of sign time for the city and also include all unsold slots (typically 10–35% of time), producing an estimated 25–50% of overall time on the signs for public messaging, arts displays and emergency alerts. The leases require OBM to pay utilities, maintenance, and to power the signs with renewable energy; OBM also agreed to site‑specific concessions such as artistic enhancements and takeover days for convention clients at the McEnery Convention Center.

The item prompted strong public comment both for and against. Supporters included downtown businesses, arts groups and the Chamber and Downtown Association, which said the signs would modernize downtown, boost foot traffic, provide event marketing and generate revenue for city services. Opponents included neighborhood activists, Lick Observatory representatives and environmental advocates who raised concerns about visual clutter, light pollution, driver distraction and the precedent of expanding digital signage; some speakers warned of potential litigation. Staff said the environmental analysis (a mitigated negative declaration circulated and responded to during the public comment period) addressed driver distraction and lighting, concluded required mitigation was feasible, and that the project complies with Caltrans and municipal dimming/operation standards (no illumination midnight–6 a.m.; automated dimming; tilt and rims to reduce upward light).

Council deliberation included questions on timetable, the absence of a takedown requirement for existing static billboards in downtown (staff explained the current RFP/lease approach differs from earlier policy options), and assurances about blackout periods and city control in emergency events. Council voted to authorize the manager to finalize leases; staff said OBM plans to commence construction documents promptly with the first sign targeted for the fall 2025 season (Center for the Performing Arts), followed by other sites into 2026.

Why it matters: the decision unlocks projected multi‑million dollar revenue for the city and a new platform for public messaging and cultural programming, while raising civic trade‑offs about nighttime lighting, visual character and the long‑term role of large‑format advertising in public spaces.