Calgary Transit’s free fare zone that runs through the heart of the city is going to look a lot greener, years before the Green Line goes live.
Mayor Jyoti Gondek announced Friday morning that TD Bank has purchased the naming rights for the stretch of lane that runs from 11th Street SW to 3rd Street SE under a five-year agreement.
“This partnership to create the TD Free Zone is a unique step for our city, and it’s actually the first time a transit agency in Canada has worked with a sponsor to rename a portion of its network ,” Gondek said.
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“Once again, Calgary leads the country. We are finding innovative sources of revenue to support our operating costs as we seek to expand transportation service and improve reliability.”
Gondek and transit officials would not release a dollar amount the sponsorship brings in non-fare revenue for Calgary Transit, nor how many companies responded to the application process that began in 2021.
“The deal is very valuable to the city and we can’t disclose the dollar amount,” Gondek said. “This will offset the operating costs of the free tariff zone.”
A recent study from the University of Calgary showed that revenue from transportation costs as a share of expenses has been cut by almost half since the start of the COVID-19 pandemic.
“The decline in transit fare revenue was the largest source of revenue decline for Calgary Transit,” the report said.
As part of November’s budget deliberations, the City Council approved using budget surpluses to freeze transit fares at 2022 levels for next year and to cover the cost of transportation for children under 12.
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New look with the new name
The mayor said it is “critical” for the city to partner with the private sector “especially as we try to revitalize our downtown and provide a safe, affordable transportation network.”
“Early in the new year, you can expect to see some interesting branding around town — flashes of green, as we like to say at TD — as well as some marketing activities where we can get some C-Train riders surprised and pleased,” Robert Ghazal, TD senior VP, said.
“We know the C-Train is a fantastic mechanism to bring people to different events, whether it’s cultural, economic or just to enjoy the vibrant life of our city.”
The multinational banking, insurance and financial services corporation already has a presence downtown, with TD Canada Trust Tower atop The Core shopping center on 7 Avenue SW at 4 Street SW.
It also owns naming rights to a number of sports venues, including TD Place Stadium, home of the Ottawa Red Blacks, TD Garden, home of the Boston Bruins and Boston Celtics, and TD Ballpark, home of the Toronto Blue Jays spring training games.
Ghazal said this is not the first transit-related infrastructure with TD green on it.
“Union Station in Toronto is actually a strong (TD) brand and we have a fantastic partnership with the operators,” he said.
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One sports economist called selling the Calgary Transit-related naming rights a “fantastic idea.”
“You already have advertisements on the side of the trains themselves. TD already has a presence downtown – it’s essentially one of the stops – so why not allow them to add some of their dollars to the local economy? Moshe Lander, Concordia University economics professor and Alberta resident.
“If it adds dollars to the local economy, if it adds money in a way that we don’t have to see as a big tax increase on property taxes, welcome aboard — literally and figuratively.”
The city has had a sponsorship and naming rights policy since 2016.
Lander said for decades, sports franchise owners have taken advantage of the additional revenue the name brings to an arena.
The Concordia economist said companies that buy naming rights typically expect equal or greater value in new customer activity, or as an advertising-related tax write-off.
Lander said it also creates brand associations on a relatively low-risk property, even if the performance of the city-owned and operated transit service declines.
“It’s not on (TD). Even if they’re somehow associated with poor quality service, they’ll just pull their dollars and say ‘thank you’ when the contract is up, ‘We don’t want to renew it.’
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Renderings of the city show TD-branded banners hanging around the Downtown West/Kirby train station.
“We will maintain the current practice of having wrapped C trains come through 7 Avenue, but we will not have banners representing any other agencies,” said Sharon Fleming, director of Calgary Transit.
The other out-of-home advertising by Pattison Outdoor will remain in place, she said.
TD Bank Group announced Thursday that its fourth-quarter profit beat expectations, thanks in part to higher interest rates.
For its full year, TD reported a profit of $17.43 billion on $49.03 billion in revenue, compared with a profit of $14.30 billion on $42.69 billion in revenue in the prior year.
– With files from The Canadian Press
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