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Written by Erik Bojnansky, BT Senior Writer   
May 2020

A no-bid contract brings sidewalk kiosks to town

SKiosks_1ometime in the near future, computerized touchscreens resembling giant smart phones will be planted on sidewalks and pathways along commercial corridors throughout the City of Miami.

By touching the screen, you’ll be able find local businesses, public venues, and bus routes, or take a photo of yourself. Public health advisories and other service announcements will be broadcast when these giant smart phones aren’t in use. In cases of an emergency, you can use them to call the police or an ambulance. They’ll provide free Wi-Fi, too.

And for a fee, they’ll display commercial advertisements.

On April 23, the Miami City Commission unanimously approved a no-bid contract with IKE Smart City LLC, a subsidiary of Orange Barrell Media based in Columbus, Ohio. That contract will allow the outdoor digital media company to install what are often referred to as “information kiosks” on the public right-of-way nearly anywhere in the City of Miami, so long as they’re at least one block away from each other, for the next 10 to 20 years, in exchange for a piece of the advertising revenue.

In an e-mail to the BT, Pete Scantland, CEO of IKE Smart City, says his company will immediately scout sites for around 50 kiosks and intends to “install several kiosks by the end of the year.” The kiosks will be placed in locations where they’ll be “most useful to residents and visitors.” At least ten percent of those kiosks will be placed “in communities of concern so various services, including free public Wi-Fi, are available to all of Miami’s residents,” Scantland adds.

Kiosks_2Marc Sarnoff, a former Miami City Commissioner and lobbyist for IKE Smart City, says the kiosks will be similar in appearance to those the company installed in downtown Coral Gables, except shorter. The Coral Gables kiosks are around 11 feet tall, Sarnoff says, while the Miami kiosks will be seven feet tall. Scantland adds that his company will work with the city to ensure the design “reflects the character of every neighborhood in which IKE is installed.” (IKE stands for Interactive Kiosk Experience.)

Scantland says the only source of revenue generated from these devices is advertising. Still Scantland and Sarnoff stress that the main purpose of the kiosks is provide information about the local area.

“Essentially, what they do is provide information to folks who require a lot of information [like] tourists or people seeking places to eat. That’s basically what they do,” Sarnoff says.

But Peter Ehrlich, an Upper Eastside activist affiliated with Scenic Miami, says the deal essentially allows additional LED billboards to be installed in Miami: “LED billboards are just visual pollution. These kiosks will just clutter sidewalks and harass residents and tourists.”

There are restrictions on what sort of advertisements can be displayed. Political advertisements are forbidden, as are tobacco ads, images depicting nudity or sexually explicit images, and “content that could be deemed offensive by reasonable local community standards.” The contract allows the city to further restrict those images at any time.

Kiosks_3However, when city commissioners discussed IKE’s pending contract, they mainly talked about what share of advertising revenue Miami will get from the kiosks and how that money will be spent. After all, the City of Miami is projected to end the fiscal year with a $19.7 million deficit, according to an April 23 memo from budget director Charlie Rose, and that’s if COVID-19 stay-at-home orders end in two months.

Indeed, when the IKE Smart City contract was first presented to city commissioners on April 9, they deferred it until the end of June. Reason: the contract stated it would be sharing 20 percent of the net revenue in the first three years, and 40 percent thereafter, meaning the company would be able to deduct costs like maintenance and installation before sharing anything with Miami.

Just two weeks later, IKE agreed to give the city 40 percent of the gross revenue throughout the contract. Most of the city’s share of the money, 75 percent, will go to the general fund. The remaining 25 percent will flow to whatever special districts in which the kiosks are installed, such as the Downtown Development Authority, Southeast Overtown Park West Community Redevelopment Agency, Omni Community Redevelopment Agency, and the Wynwood Business Improvement District, Coconut Grove Business Improvement District.

“We were friendly to the [commissioners’] request that we share gross revenues,” Scantland says, explaining the quick turnaround. (Scantland declined to share with the BT what sorts of rates will be charged for paid advertisements.)

IKE Smart City has kiosks in eight cities, including Baltimore, Cleveland, Columbus, St. Louis, San Antonio, Denver, Tempe, and Coral Gables. But IKE isn’t the only company that builds and installs such kiosks, nor is it the only company that would have liked to make a deal with Miami.

During the April 23 meeting, Edward Martos, a lobbyist affiliated with the law firm Weiss Serota Helfman, pleaded with city commissioners to consider an offer made by his client: the similarly named Smart City Media, a New York-based company that claims to have kiosks in at least seven municipalities. Matos claims Smart City Media is willing to give Miami 42 percent of its gross revenue.

“Simply on financial terms alone, when you’re looking at a budget shortfall, we’re offering you a superior offer,” Matos told commissioners.

Scott Goldsmith is president of the “cities and transit” section of Intersection, an information-kiosk company with devices in 12 markets, including New York City and Los Angeles, that’s owned by Google’s parent company, Alphabet. In a written statement to the BT, Goldsmith states that Intersection would have loved to bid for a Miami contract.

“Miami is a world-class city that would be a great fit for our business,” Goldsmith conveys. “We’ve developed thousands of industry-leading information and advertising displays across the country and would have provided a very competitive bid. We hope there is an opportunity to partner with Miami in the future.”

Scantland insists that IKE Smart City “stands out from the competition” thanks to the company’s technology, business model, and staff. He adds that the company has also been “working with the City of Miami for over a year to ensure that it is intimately familiar with our business and our technology.”

Lobbying, and campaign contributions, were a big part of this education effort. A January 1 investigative piece by BT contributor Francisco Alvarado for the Florida Bulldog revealed that IKE Smart City hired both Sarnoff and Miguel Diaz de la Portilla, a former county commissioner and brother of Miami City Commissioner Alex Diaz de la Portilla as lobbyists.

Additionally, IKE and Orange Barrel Media gave Sarnoff’s political committee, Truth is the Daughter of Time, $63,000 between February 2018 and August 2019. Sarnoff’s committee then gave $5500 to a political committee run by Miami City Commissioner Keon Hardemon, $15,500 to political committees affiliated with Alex Diaz de la Portilla, and $1000 directly to Diaz de la Portilla’s campaign account during last year’s city election.

Prior to IKE’s known interest in City of Miami politics, Truth Is the Daughter of Time also gave $11,000 to Joe Carollo’s successful 2017 campaign for Miami’s District 3 city commission seat.

“Like many businesses, IKE retained the counsel of local lawyers to assist in drafting a contract that met with Miami City Code and followed city procedure,” Scantland explains.

Still, kiosk companies can bid for an area of Miami frequented by residents and tourists alike: Bayfront Park. At the April 23 meeting, Commissioner Joe Carollo insisted that the semi-autonomous committee he chairs, Bayfront Park Management Trust, issue its own bid for information kiosks, and that revenue be used to help pay for the park’s operations.

“I will negotiate with this firm or other firms for the best deal possible, and bring this back to you with additional projects that I would like to negotiate,” Carollo declared. His colleagues agreed -- so long as money not used to run Bayfront Park would be sent to the general fund.

The bids may not have been legally possible at all if the Miami-Dade County Commission hadn’t passed an ordinance this past January allowing the City of Miami to opt out of the county’s ordinance governing signs on the public right-of-way. Although Miami officials have routinely disregarded county laws governing outdoor advertisements. Advocates of controlling outdoor advertising point out that the city has ignored county and state regulations governing the size and placement of billboards, advertising murals, and digital signs for more than a decade. (See “Billboard Jungle,” August 2013.)

No one spoke out against information kiosks when they were discussed by the commission in March and April, either. That’s possibly because activists are exhausted from fighting outdoor advertising companies and their lobbyists in Miami, explains Nathan Kurland, a member of Citizens for a Scenic Florida. Scenic Miami itself, while technically still existing, is essentially inert. “We are in the process of losing the battle right now,” Kurland admits.

Kurland isn’t shy, however, about sharing his opinion that, although they’re on installed on sidewalks, kiosks near a roadway are potentially distracting to vehicular drivers. “Sidewalk kiosks are even worse than the huge LED billboards -- they’re dangerous distractions at eye level that are difficult to ignore,” he says.

Scantland counters that the kiosks are far less distracting to drivers than electronic billboards. “In contrast to billboards, which are 672 square feet, the kiosks are 65 inches on the diagonal and are installed on the sidewalk where they will be most useful to pedestrians,” he states.

Another possible concern is personal information. The kiosks collect information via sensors (which also collect environmental data) and Wi-Fi service, as well as any searches done directly on the kiosk. They retain the data for six months. IKE’s contract states that it may engage with “third-party partners to collect certain technical information to help us operate and provide the Wi-Fi service and other services available on the IKE.” The info can also be used to figure out “population demographic information,” foot traffic, and website history.

Nathan Sheard, a lead organizer for the Electronic Frontier Alliance, says such data is extremely valuable to companies, and it can be obtained from someone walking by with a smart phone if the Wi-Fi router is turned on. That’s fine, Sheard says, so long as the company guarantees that the private searches of an individual aren’t disclosed. And while IKE’s data clause ensures privacy and forbids the sale of data to a third party, Sheard points out that this policy can be changed at any time, so long as the company gives the city a 30-day notice.

“I think the general idea of offering free or low-cost Internet access is admirable. More cities should look at Internet access,” Sheard says. At the same time, he says, there is an opportunity to insert stronger language in the agreement to ensure privacy rights.

Scantland says that while IKE does gather “pedestrian counting data,” that information is “completely aggregated and anonymized.”

As for the kiosks themselves, Scantland insists they’ll be an asset to the city. The kiosks will drive traffic to local businesses, he maintains, whether they advertise or not. During the pandemic, IKE Smart City will donate “airtime to local business and non-profit organizations.” The kiosks can also “promulgate location-centric public health information.”

But what about reports that the COVID-19 virus can live on surfaces, including interactive screens, for several days? “Our kiosks will be cleaned on a daily basis,” Scantland assures, “and we are taking extra precautions to ensure that kiosks will be deployed with a coating that minimizes the spread of diseases.”

 

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