Clear Channel tried to 'walk away' from billboard deal with Methuen

Bill Kirk, The Eagle-Tribune, North Andover, Mass.
·3 min read

May 16—METHUEN — The City Council is poised to vote Monday night on a new contract with Clear Channel, after the billboard company tried to back out of its original deal with the city.

The multibillion-dollar outdoor sign company originally agreed to pay $1.25 million for a new Nicholson Stadium running track in return for the city allowing the company to convert two of its billboards to digital format. In addition to rebuilding the track, part of the Clear Channel payment — made over 25 years — was to go toward "improving and enhancing park amenities" in the city.

But when COVID-19 hit, and traffic on the nation's highways dried up, Clear Channel lost money and tried to renege on its deal with the city, even though the track by that time was completely rebuilt, said Mayor Neil Perry. The city even held a dedication ceremony last November.

"We had what we believed to be an agreement with Clear Channel," Perry told the council on May 3. "Clear Channel tried to walk away, which caused us a lot of consternation."

The result now is that the project is facing a $200,000 deficit, according to Maggie Duprey, the city's Chief Administrative and Financial Officer, or CAFO.

City Solicitor Ken Rossetti, Assistant City Solicitor Peter McQuillan and Economic Development Director William Buckley worked over several months to try to salvage a deal that would guarantee payment as agreed to. Instead, the only guarantee is that the city will get $500,000 from the Texas-based company over the next 10 years. The rest of the promised funding could still be held back, based on the contract undergoing its second review by the council Monday night.

During the initial review of the new contract on May 3, the council voted 8-1 in favor of the revised pact, with only Councilor Nicholas DiZoglio voting against it.

"We already paid for the track," DiZoglio said. "I want to get that money back."

City Councilor Jessica Finocchiaro said there were too many questions with the new deal, adding that the "previous contract was more advantageous."

She recommended tabling, or delaying, the contract vote "so we can have continued discussion." Her motion failed on a 6-3 vote. Voting in favor of delaying the vote were Councilors Mike Simard, DiZoglio and Finocchiaro.

At issue is wording in the new contract that would allow Clear Channel to withhold funding after the first 10 years of the deal.

"There is a condition in both agreements that at any time, beginning at year 11, Clear Channel can convert one or both Digital Billboard faces to non-digital," she said in a memo to the council. "If one face, it would reduce the annual grant to $12,500 and if both faces, then the grant will be eliminated henceforth. Therefore, only the first $250,000 in each agreement, $500,000 in total, is guaranteed."

The agreements cover two billboards, each having two faces. One billboard is located at 145-151 Pelham St., overlooking Interstate 93. The other is at 478 Merrimack St., overlooking Interstate 495.

"This guaranteed amount will cover the deficit balance in the track capital project and allow for additional funds to be put in a fund (for) capital expenditures related to the city's stadium and parks," Finocchiaro wrote.

Another fly in the ointment is that Clear Channel still needs miscellaneous permits and approvals for the digital signs, which likely won't come until later in the year — after the end of the fiscal year, which ends June 30.

As such, she said, the city will have to borrow to cover the $200,000 deficit in the track account. That expenditure will be reimbursed once Clear Channel gets the needed approvals and makes its first payment to the city.