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Citi Bike Near Jersey City Launch
Under a potential pact, Citigroup would pay part of the $2.5 million upfront costs for the system
By ANDREW TANGEL
April 3, 2015 7:42 p.m. ET
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As Citi Bike expands in New York City later this year, blue bicycles adorned with Citigroup Inc.’s logo may start rolling on the other side of the Hudson River.
The financial giant is in advanced talks to sponsor Jersey City’s planned bicycle-sharing system, which is expected to launch later this year, a person familiar with the matter said.
Under the outlines of a potential agreement, Citigroup would shoulder at least some portion of the program’s estimated $2.5 million in upfront costs for 350 bikes and 35 stations where riders park them, this person said.
It wasn’t yet clear if an eventual deal would land the firm naming rights for the system. The person familiar with the matter said a contract hadn’t been drawn up, and cautioned there remained a number of unresolved issues. Other corporate sponsors also are expected to contribute to the program.
Citigroup’s involvement signals continued interest from deep-pocketed companies in paying for bike-share programs that have been springing up throughout the country in recent years despite sometimes bumpy starts.
Proponents tout the systems as an emerging form of transit that promotes exercise and reduces automobile pollution, but city officials and cycling enthusiasts have often struggled to find financing for upfront capital costs and subsidies for operations. Bike-shares typically get revenue from some combination of user fees, advertisements, sponsorships or taxpayers.
In addition to New York City’s program, Citigroup is the title sponsor of a Florida bike-share in Miami and Miami Beach.
Jersey City’s is among 20 public bike-shares expected to launch by the end of this year, bringing to 68 the number of such systems in the U.S., according to Lindsay Garten, a researcher with the Earth Policy Institute in Washington, D.C. The institute counted seven such systems in 2010.
The progress in securing funding for Jersey City’s bike-share signals a reversal of fortune for Mayor Steven Fulop. His city’s earlier attempt to launch a system last year faltered as sponsorships failed to materialize. That planned bike-share was supposed to be a regional system that included neighboring New Jersey locales Hoboken and Weehawken.
In June, Mr. Fulop blamed the earlier plan’s difficulties on the travails suffered by Citi Bike, New York City’s system, which was then facing financial and operational difficulties. Citi Bike’s woes were blamed for making potential sponsors skittish.
Since then, Citi Bike’s operator has been taken over by a group of New York investors, changed its name to Motivate and installed Jay Walder, a former head of the Metropolitan Transportation Authority, as its chief executive.
The takeover was announced along with plans to double Citi Bike’s current fleet of about 6,000 bikes, the country’s largest, over the next three years.
Jersey City later switched gears and selected Motivate, which was previously named Alta Bicycle Share Inc., in January. The city had sought a bike-share that would be compatible with New York City’s system, one in which riders could check out bikes with the same membership on either side of the river.
Mr. Fulop said in a recent Facebook post the bicycles for Jersey City’s system had been ordered and a launch was planned this summer.
Mr. Walder has said the reorganized company, which moved its headquarters from Portland, Ore., to New York City, was even developing its own bicycle—a nod to the supplier problems that have hobbled some systems trying to expand.
If it pans out, a bike-share program would come to a Jersey City whose downtown and waterfront have undergone significant transformation in recent years.
The city has tried to attract would-be residents of New York, offering relatively less-expensive rents and restaurants that visitors might find in hip Brooklyn neighborhoods.
During the past year, the city has built up its infrastructure to make way for cyclists, including added bike lanes and racks, said Christopher Englese, co-founder and president of Bike JC, a cycling and pedestrian advocacy group.
The result has been a streetscape that has become friendlier to bikes, he said.
“There’s more of an understanding of sharing the road,” Mr. Englese said. “We’re still working on that from both ends—from cyclists and motorists. But I do think we’re better suited now than we were a year ago for the bike-share program.”
Write to Andrew Tangel at
Andrew.Tangel@wsj.com
http://www.wsj.com/articles/citi-bik...nch-1428104532
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