Streams

NY's Rocky Road to a Bike Share Sponsor -- or Why The Rollout Will Take Longer Than Planned

Tuesday, May 08, 2012 - 01:38 PM

New York City Transportation Commissioner Janette Sadik-Khan at the rollout of New York's "Citibike" bike share. (Photo: Andrea Bernstein)

When New York  Deputy Mayor Howard Wolfson and New York City Department of Transportation Commissioner Janette Sadik-Khan announced New York's bike share program last fall, the intention was clear -- they were setting up "a new system to be comprised of 10,000 bikes and 600 stations in parts of Manhattan and northwest Brooklyn -- at no cost to the taxpayers" as Sadik-Khan put it then.

The system, it was explained, needed to be large to make it work -- the more potential users could depend on finding bikes in a variety of locales, the more it would be an actual public transportation network -- not some urban folly.

But when the system was presented Monday under its brand new-name, Citibike, to be funded through a five-year, $41 million contract with Citibank and a $6.5 million Mastercard sponsorship, it was somewhat less extensive -- at least at first.  "It will be a phased-in deployment," Sadik-Khan said at Monday's press conference.  "I mean we can’t just airdrop 10,000 bikes in. It will be between August and spring of 2013 that we'll have the deployment of the full system."

The bike share program, it turned out, would NOT hit the Upper West Side, Upper East Side, Park Slope, Cobble Hill, or much of Brooklyn beyond Bergen Street until a year from now.

Sadik-Khan wouldn't explain why, or when, this decision was made.   No other DOT officials would speak to this issue, implying that this was always the plan. When I asked Alta president Alison Cohen about delays in implementing the program, Sadik-Khan's spokesman rushed over to prevent her from answering.

But speaking to elected leaders, officials and several sources familiar with negotiations over the bike share contract, a story has emerged of a far more rocky road to a sponsor than yesterday's happy news conference would suggest.

"I got a call sometime last week, that’s when I first heard of  a delay," said Council member Gail Brewer, who represents the Upper West Side. Brewer says she was told there would be 7,000 bikes rolled out at first, with the balance coming next spring. Was she disappointed? Brewer, a big bike share backer, was philosophical.  "I'll be disappointed if I don't get my day care slots back," Brewer said, referring to Mayor Michael Bloomberg's proposed budget. "You have to have priorities."

When the city announced that Alta Bicycle Share would be operating the bike share it made one in a series of splashy promises -- there would be no cost to New York taxpayers. "Alta will be getting a sponsor," Sadik-Khan said at the time. That would make New York the only large-scale system in the country to be entirely privately funded.

"We're getting an entirely new transportation network without spending any taxpayer money," Bloomberg said at Monday's press conference. "Who thought that could be done?"

Apparently, there were a lot of doubters. Puma was approached, and Adidas (New Balance has sponsored Boston's "Hubway.") So was American Express. "All the usual suspects," said one source familiar with the negotiations. "The list of companies who could spend this kind of money just isn't that long. And it was unprecedented to raise that kind of capital  for an unproven system --  bike share on European scale, an order of magnitude larger than any system in existence in north America."

By February, officials were beginning to sweat. If New York didn't find a sponsor, the city could be on the hook to Alta -- but worse, many officials thought, the bike share program could be imperiled.

"It's a lot of money and each company has to decide whether the opportunities they'll have by sponsorship fit their clientele," said Bloomberg on Monday, maintaining he never worried.

But Alta's business plan was confusing, sources say, making it hard to reel in the big money. In late winter, the city involved its Economic Development Corporation in the planning, adding some business gravitas to the discussions.   (The EDC is a quasi city agency that usually hands out loans to entities willing to locate or create jobs in New York.)

Ed Skyler, Bloomberg's former Deputy Mayor for Operations (and Sadik-Khan's old boss), is a top Citibank executive. Citibank was lured in.

(Even so, everyone, from the Mayor on down, credits Sadik-Khan. "I never worried," Bloomberg said, "because Janette went after it. And anyone who knows Janette knows if she sets her mind to it it's going to get done.")

Eventually, Citibank was sold. "We think this is a very innovative program that makes people’s lives easier, that’s what we do, that’s what we do as a bank," Vikram Pandit, Citibank's CEO, told me Monday.

Was he worried about controversy surrounding the program? "This is a program supporting bikes, bikes are environmentally friendly, they're good exercise. There’s always controversy  -- but on balance we think this is a great program," Pandit said.

The Citibank contract was signed only two weeks ago -- far later than officials had hoped. Without the contract, there wasn't the upfront capital to get the bikes produced. And that, multiple sources confirm, was the major reason for the delay in getting the bikes to some neighborhoods.

Bike share boosters are, for the most part, expressing just the faintest disappointment at the delay in bringing bike share to the full footprint.

"The reality of implementing an entire transportation network from scratch for a city as large and complicated as New York will obviously require a careful approach," said Transportation Alternatives chief Paul Steely White. "The city is working with local communities to roll out bike share with as little disruption as possible. Sometimes that means revising timelines. The important thing is to keep moving forward and work toward meeting the huge demand for bike share in New York City."

Steely White, Brewer and others are willing to cut the city some slack -- willing to give credence to what the city says. "We said we would find a sponsor.  And we did," mayoral spokesman Marc LaVorgna said. " We're doing something that's never been done before."

When the bright blue bikes were unveiled Monday at City Hall plaza, there were smiles and claps. And the idea of "Citibike" seemed to convey exactly what the city wanted -- these bikes are for transportation, for getting around the city. These are urban bikes. And they are intimately tied with the city's economic future.

"A perfect outcome," Sadik-Khan told me yesterday.   I told her I was guessing she was exhaling right about now. A faint smile played across her lips.

 

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Comments [4]

Lance

The laid off Dewey and
LeBoeuf lawyers are rubbing
their hands in glee for the
first lawsuit against a
Citibike that hits pedestrians.

And to Ms. Brewer: we do not need
any bike share sites on the Upper
West Side. Save the money for the
Libraries.

May. 15 2012 02:09 PM
Sheila

But I would like to know WHY the program is only in areas populated by yuppies!!!

May. 15 2012 11:43 AM
elle

I am really miffed that upper Manhattan is being left out of the first phase,as noted in the article. This is especially annoying since it is more difficult to go across town by public transport once you hit Central Park than downtown. Bikes could alleviate crowded buses, cab congestion, and the lack of any crosstown trains. Why cluster stations downtown instead of equally rolling out throughout Manhattan island, I wonder?

May. 14 2012 02:26 PM
Rob

Citifield costs Citibank $20million per year. This is only costing them about $4million, and it puts there name all over Manhattan. Their ubiquity on TV and Film coverage will multiply the impact enormously. I think Citi got a great deal.

May. 12 2012 10:46 PM

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