2004-0469 – City of Sunnyvale: Study Issue To Revive Auto Dealer Decorative Banner Program:  This study will examine whether to adopt a pilot program or codify provisions to allow decorative banners for auto dealers at certain locations along El Camino Real. RK (Also to City Council on 09/28/04)

Ryan Kuchenig, Project Planner, presented the staff report.  He summarized the evolution of the study issue and the history of the Auto Dealer Decorative Banner Program. He noted that the City Council created a sub-committee including Comm. Babcock to identify how the City could support auto dealers with cooperative marketing and other programs to help increase their presence within Sunnyvale. He further noted that a new auto dealer association was formed and has renewed interest for collective marketing and advertising.  The sub-committee, staff and the association met to discuss and gather input for a banner program.  Staff noted that the recommended ordinance would regulate the banner size, number, spacing of banners, mounting height, duration and design. He noted the benefits of the banner program to the City as well as to the auto dealers.  Staff recommended that the Auto Dealer Decorative Banner Program become a permanent program.

Chair Moylan discussed with staff on available data indicating whether or not the pilot program made an impact. He asked staff whether the recommendation is so that auto dealerships will be competitive and not face a disadvantage with the other auto dealers in other cities.  Staff responded that no data was available to make this determination on whether the program or lack of is a disadvantage.  He added that the proposed program is one hoped to benefit the auto dealerships to be competitive. 

Further, Chair Moylan clarified whether the program from other cities has similar requirements with the proposed program.  Ms. Ryan responded that other cities do not seem to have comparable programs.  She added that the proposed collective marketing strategy is used in other cities.

Furthermore, Chair Moylan asked why recommend a permanent program rather than create a second pilot program. Ms. Ryan clarified that a first pilot was conducted where data was not gathered and City Council directed staff to conduct a second pilot and to collect data on the economic impact information. She noted that there are other factors that influence sales and that the proposed program is only one piece of a marketing program. 

Chair Moylan asked staff on what basis the recommendation was made to have a permanent program when there is no data available and commented that the program appears to be selectively treating one business differently from all the other businesses.  Ms. Ryan responded that there is no concrete data linking to the success of the business.  However, she noted that a unified program provides a collective identity and that combined with marketing is expected to have a positive benefit.  She added that consumers identify different places in which to purchase automobiles because of a collective marketing.  Ms. Ryan added that the recommendation is not based on an actual or perceived sales volume but rather in terms of collective marketing which is reinforced by the decorative banner program.

Comm. Babcock asked staff whether the size and design of the banners would be identical with the exception of the dealers’ logo since it is not clearly stated in the ordinance. Ms. Ryan responded that the ordinance states the need for submitting a proposal to staff to review size, colors and design to be the same, simple and to the point and would not necessarily be identical because of logo differences or primary color, but they would have a unifying quality.

Comm. Babcock further asked to clarify why staff proposes one banner per pole.

Staff responded that staff was concerned with the visual impact and felt that one banner would be more appropriate to prevent cluttering.

Further, Comm. Babcock asked staff whether this is something that could be looked at later at the request of the association.  Ms. Ryan responded that it depends on the Council’s study issue prioritization.

Comm. Klein asked if staff has any recommendation as to the percentage between logos and words in a banner.  Ms. Ryan responded that staff did not look at it extensively.  However, based on one sample, she would expect the logo to be no more than 25% of the banner and the remainder would be graphic or slogan.

Vice Chair Hungerford recommended to change the word “require” with “warrant” in the last sentence of the first paragraph of the proposed ordinance to communicate a softer but similar message about the need for the banner. 

Chair Moylan opened the public hearing.

Adam Simms, resident and a member of the Sunnyvale Automobile Association thanked the City Council, Comm. Babcock and Connie Verceles for their support. He stated that the Sunnyvale Automobile Association is composed of 12 dealerships and 16 franchises with one of the goals to bring awareness of their presence in Sunnyvale. He discussed the competitiveness of automobile sales with the sales being diverted to Stevens Creek or Capitol Expressway.  He emphasized that one of the goals of the association is to bring awareness of their presence. He noted that the automobile dealerships in San Jose do not have better cars nor better priced cars, but rather they have creative ways of marketing to attract consumers. He stated that one of the ways to drive this awareness is the creation of the automobile decorative banner program as one of the marketing tools and one step to help in a consistent basis. He recommended that the association would like to manage the maintenance of the banner instead of changing the banners every six month.  He stated that it is important for their association to keep their show rooms and stores clean and one of them is to keep their banner fresh at all times.

Comm. Simons thanked Mr. Simms on re-energizing the automobile market in Sunnyvale.  He asked whether there is any value for the association to review the program as needed instead of having a permanent program. Mr. Simms responded that the question should be whether the association could quantify the benefit with this type of program.  He stated that members have a one year commitment with substantial financial monthly commitment and agreed to do on an annual review.

Further Comm. Simons asked about the value of making the program permanent.  Mr. Simms responded that the internal and external promotion is very important and constant awareness of auto dealerships in Sunnyvale is vital not only to the dealerships but as well as to the City of Sunnyvale.

Comm. Babcock clarified with Mr. Simms whether two years as the frequency of changing the banners would keep them fresh and attention catching would be sufficient.  Mr. Simms responded that the association is not suggesting that two-year interval is the right period but rather to have high quality banners and the ability to change the banners when needed.

Further, Comm. Babcock asked whether the association has looked at having two sets of banners changing them every six months for variety and appeal.  Mr. Simms responded that the investment is to have high quality banners and when there is wear and tear then replacement should be made.  He added that if the a new look is needed then adjustment will be made.

Comm. Babcock further asked Mr. Simms what is the association’s control over the auto dealers to change the banners. Mr. Simms responded that the agreement is that each dealership will pay for their banners and the association will supply the banner to maintain the quality, look and feel of the banners.  He added that the Ordinance requires fewer light poles which are 30 feet apart and fewer banners.

Ms. Ryan clarified that staff’s recommendation is a maximum one banner of 30 feet of frontage and not by the number of light poles as there are some cases where the light poles are as close as 10 feet.  But the total number of banners is based on the total feet of the frontage which averages 30 feet distance between the poles on most sites.

Chair Moylan closed the public hearing

Comm. Babcock commented that staff’s recommendation covers it all and that the program will create a collective identity for the auto dealerships and a benefit for the overall streetscape.  The program will recognize a unique business which needs to be retained.

Comm. Fussell gladly supported the motion and that the program would assist the auto dealerships with the collective which identify will enable them to compete. He congratulated the association for its participation and hoped the ordinance will go forth.

Vice Chair Hungerford offered a friendly amendment to delete the words “and require” keeping “warrant signs” in the last sentence of the first paragraph of the proposed ordinance.  Accepted by the maker and the second.

Vice Chair Hungerford commented that El Camino Real is different from Stevens Creek and Capitol Express because of is uniqueness and diversity. He further commented that he does not want to see El Camino Real become another auto row although that the auto dealerships are an important part of the make up of El Camino Real.  He added that the proposed ordinance fits the auto dealerships with other diverse uses along El Camino Real.  The program would not be obtrusive and would preserve the diversity and the various businesses.  He saw the collective value of the banners as long as it does not overwhelm other businesses along El Camino Real.

Chair Moylan shared Vice Chair Hungerford concerns about El Camino Real becoming another auto row.  However, his major concern is that the driving force of the ordinance is that auto dealerships require and warrant special collective signs even absent of data to support this statement.  He added that the problem has not been clearly established whether banners different from the sample attached to the staff report would address the problem. He further added that the difference between dealers is not based on the types of banners.  He expressed concerns that the ordinance would show favor over a particular group of business and discriminate against other businesses.  He felt that there is no driving need or justification to recommend a permanent program. He did not support the motion.

Comm. Simons supported the motion.  He recommended that performance measurements are very useful to ascertain the value of the program.  He added that the proposed program is very modest and that Sunnyvale would extremely benefit from the success of auto dealerships and other businesses along El Camino Real.

Comm. Babcock commented that the auto industry is unique from other industries along El Camino Real.  She added that most of its inventory is stored outside which could be a part of landscaping or part of the entire store. She concluded that the program is a small step where the association is willing to pay for and it is worth trying.  She stated that she learned a tremendous amount and understand the uniqueness of the industry as a member of the subcommittee.

FINAL MOTION:

Ms. Ryan stated the item will be considered by City Council on 09/28/04