TO: MAYOR AND CITY COUNCIL MEMBERS, CITY OF CHINO
FROM: JACKIE MELENDEZ, ASSISTANT CITY MANAGER
SUBJECT
title
Cost Sharing Agreement with Chino Hills Ford for CA-71 freeway sign modification.
end
RECOMMENDATION
That the City Council review and consider approval of the funding request from Chino Hills Ford for a 50% cost-share contribution of $288,192 and authorize the City Manager to execute the necessary documents on behalf of the City.
body
FISCAL IMPACT
Approval of the Digital Sign License Agreement will result in a General Fund expenditure of $288,192, representing the City's 50% cost-share of the total $576,384 project cost for upgrading the existing digital freeway sign along CA-71. This amount will be incorporated into the Proposed FY 2025-26 Budget, scheduled for Council adoption on June 17, 2025.
The City's contribution covers all one-time capital costs and maintenance expenses for the first five years. Beyond this initial period, all ongoing operational costs including maintenance, programming, power, and insurance will be the sole responsibility of Chino Hills Ford, ensuring no future financial liability for the City.
Payment will be made directly to the digital sign vendor, Electra-Media, Inc. (EMI).
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Positive City Image
• Responsible Long-Range Planning
• Effective Technology
|
Revenue: Click or tap here to enter text. |
Expenditure: 1009020-43650-MS263 |
|
Transfer In: Click or tap here to enter text. |
Transfer Out: Click or tap here to enter text. |
BACKGROUND
Chino Hills Ford, located in Chino, has formally requested financial assistance from the City for a significant upgrade to its existing digital freeway sign, positioned along the CA-71 freeway. This sign serves as a prominent advertising asset for the Chino Auto Center.
The current sign is presently inoperable due to several technical deficiencies, which include:
• The use of outdated and discontinued Amber LED technology, no longer supported by manufacturers.
• Aging electrical wiring and internal components, which pose safety concerns and render repairs unfeasible.
• A screen size and resolution that do not meet current standards for visibility and performance, particularly regarding daytime readability and exposure to high-speed traffic.
To address these issues and restore the sign's functionality, Chino Hills Ford has contracted Electra-Media, Inc., a vendor specializing in auto dealer digital signage. Their comprehensive retrofit plan proposes the following upgrades:
• Installation of a larger, full-color, high-resolution LED digital display designed for optimal visibility to an estimated 150,000 daily drivers.
• An illuminated "Chino Auto Center" identification feature to be placed at the top of the sign structure.
• Incorporation of City of Chino branding on the pole cover to enhance civic identity.
• Refurbishment of all lighting systems and a complete repainting of the structure to ensure a like-new appearance.
• Required to file a CEQA Exemption under CEQA Guidelines §15301
This sign upgrade is anticipated to enhance the visibility of the Chino Auto Center, potentially increasing consumer traffic, dealership sales, and consequently, local sales tax revenue. The dealership currently employs 125 staff members, with plans to expand to 150. Based on industry benchmarks, a fully functional and modern freeway sign could contribute to a 20-30% increase in sales, which could generate over $233,000 in additional annual tax revenue for the City.
ISSUES/ANALYSIS
The proposed partnership for the digital freeway sign upgrade presents no apparent analytical challenges. The contract agreement incorporates precedents from other municipalities that have provided comparable levels of financial support for similar projects, such as the City of Montclair's contribution of 50% of a $750,000 project.
In exchange for the City's financial support, Chino Hills Ford will change its name to Chino Ford and allocate 15% of the sign's display time for public messaging for twenty (20) years. This provision enables the City to utilize the sign for public service announcements (PSAs), emergency alerts, and various City campaigns without incurring ongoing media costs.
Attachments: Chino City Funding Request Letter
Chino Hills Ford - Sale Agreement
Digital Sign License Agreement - Chino Ford
Exhibit 2 Chino Ford - Rendering