Moneybox

If You Build It, Will They Sponsor?

How Salesforce wound up naming a San Francisco landmark.

A rendering of the new facility, designed by Pelli Clarke Pelli.
What’s in a name?
Transbay Transit Center

San Francisco’s newest landmark opened on Sunday, a two-and-a-half-block, $2.2 billion bus station with a park on the roof. The public transportation terminal is named not for local leaders Harvey Milk, Ed Lee, or Nancy Pelosi, but for the software company whose new headquarters next door is the tallest building in the city: Salesforce Transit Center and Salesforce Park.

The reviews for the station, designed by Pelli Clarke Pelli, are glowing. In the San Francisco Chronicle, John King writes approvingly of the space, where local, suburban, and long-distance bus passengers will arrive downtown:

The entry hall glistens, with natural ventilation and 32-foot-tall walls of glass. … The space is surprisingly quiet, neighborhood noise muffled by the building’s perforated metal screen as well as the towers looming outside.

On the roof, the 5.4-acre park (about four football fields) offers a moment of respite from the busy streets below. The building, which replaced the aging Transbay Terminal, was so crowded on opening Sunday that visitors were asked to come back another day.

Is corporate nomenclature the future of public transportation facilities? In many places, it’s the past: New York’s Grand Central Terminal was named for the New York Central Railroad, Newark’s Penn Station for the Pennsylvania Railroad, and so on. The nation’s various Union Stations sound like they were named in bursts of post–Civil War pride, but many were also built by Union Pacific.

The difference is that Salesforce isn’t in the transportation business. The Transbay Transit Center, as many news outlets continue to call it, is a public facility that was put up for sponsorship in 2015. Salesforce will have paid stakeholders $10 million by the end of this year, and beginning in 2021 will pay $3.28 million per year with 3 percent interest until the agreement expires. Over the next 25 years, the SF-based company will pay a total of $110 million for the naming rights to the transit center and the park, which is connected to the firm’s skyscraper via skybridge. Salesforce will have to rent the space for private gatherings like anyone else.

Why the sponsorship in the first place? Transbay came in a year late and $600 million over budget—and still doesn’t include the high-speed and commuter rail connections required to bring most of its projected riders. As a result, a station designed to serve as many as 45 million passengers a year will serve only a fraction of that total to begin with. Retail leases will pay for some of the $25 million or so in annual operating costs, as will revenue from tolls and fares. And then there’s that bit from Salesforce.

It doesn’t seem like much money to put your company’s name on what was billed (in the bid solicitation) as “an inspiring and iconic civic landmark in the heart of a vibrant new downtown.” It’s cheaper than a 30-second Super Bowl ad and just a third of what Levi’s pays to put its name on the San Francisco 49ers’ new stadium in Santa Clara. But when it comes to public transportation, every little bit counts.

It has long been the status quo in the U.S. for nonprofit and public institutions to depend on private largesse, from Carnegie libraries to museum wings named for various philanthropists. Corporate naming rights are a slightly more recent phenomenon but have thrived in an era of record corporate profits, unparalleled personal wealth, and public-sector retrenchment. Consider the National Museum of African American History and Culture, where the Walmart Welcome Center leads to the Bill & Melinda Gates Foundation Staircase to the Sweet Home Café “generously supported by Kaiser Permanente.” The nation’s flagship public museum is named for a donor, James Smithson, but it’s more reliant on private-sector partners than ever.

For cities, this dynamic is most evident in the wave of corporate partners that have bought naming rights to sporting and event spaces. For just $1.3 million a year, the University of Louisville has forced basketball fans and concertgoers to meet at the KFC Yum! Center. In pro sports, these deals can be quite lucrative for cities—and provide some solace for public finance watchdogs, since most cities fork over hundreds of millions to build the facilities on behalf of franchises. Public transit hasn’t attracted that kind of money, and with good reason: You won’t find millions of people watching buses come and go on television eight times a year.

Which brings us back to the economics of sponsoring transit projects: It’s an awkward combination of agencies desperate for money and an almost total lack of interest from corporate partners. Unless the building has a top-tier architect and costs a few billion, a place at the heart of the city apparently isn’t worth much. Detroit’s new streetcar was named the QLine, for Quicken Loans, for just $500,000 a year. In Boston, the MBTA tried to auction off station and line names but abandoned the effort when it received only a single bid, from JetBlue for the Blue Line, that did not reach the $1.2 million asking price.

In other words, the price of naming many of these facilities is very, very low—and we still, apparently, can barely afford to name them ourselves. If the station of the future doesn’t have a corporate name on it, it’s probably not that it wasn’t for sale, but that nobody wanted to buy it.