LAGUNA NIGUEL : New Bus Shelter Company Chosen

The City Council has approved an exclusive, five-year contract with the Target Media bus shelter company and ended its business dealings with a financially ailing Tustin firm that owes the city more than $30,000.

The new contract with Target Media guarantees the city revenue of at least $170,000 in the next five years. The company also agreed to prohibit the advertising of alcohol or tobacco products in the city.

Council members expressed sympathy with the plight of investors trying to reorganize the finances of Metro Display Advertising Inc.

In January, Metro Display, which was doing business as Bus Stop Shelters, filed for Chapter 11 financial reorganization in U.S. Bankruptcy Court.

The company lists assets of $925,000 and debts of an estimated $55 million, including $1.5 million owed to cities and counties, City Manager Tim Casey told the council.

The company, one of three major Southland firms that install and sell advertising space on bus shelters, owes Laguna Niguel about $32,000 for the 12 advertising bus shelters it operated in town, Casey said.

“It’s a very difficult issue,” Councilwoman Patricia C. Bates said.

Investors said they feared that the council’s decision would set a precedent and hurt their reorganization plans.

But Casey said the firm’s shelters in town represent only a small fraction of the 2,600 Metro has installed in Southern California and Nevada and of the 4,600 that were sold to investors.

Councilman Paul M. Christiansen, who earlier this year initiated an investigation into bus shelter funds owed to the city, suggested that the city give Metro investors three shelters as a sort of “enterprise zone.” The suggestion failed to gain any support.