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TO: |
Mayor and Members of Council |
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FROM: |
Stuart Taylor,
Director, Strategic Services |
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PREPARED BY: |
Laura Daly, Community Partnership
Coordinator |
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DATE OF MEETING: |
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SUBJECT: |
Town of |
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RECOMMENDATION:
That a non-exclusive partnership between the
Town of Markham and Mercedes Benz Canada Inc, Markham Retail Division for the
Naming of the East Arena at the Angus Glen Community Centre in the amount of
$20,000 a year for a three year term be approved by Council;
And that a legal agreement between Mercedes
Benz and the Town of
And that Council authorize the Mayor and Clerk
to execute this agreement in a form satisfactory to the Town Solicitor;
And that the Community Partnership Coordinator
work with internal stakeholders to implement and service the partnership.
PURPOSE:
The
purpose of this report is to seek Council approval for a community partnership
between the Town of
BACKGROUND:
In
October 2004, Mercedes Benz was the Associate Dinner Sponsor at the Mayor’s
Dinner for the Arts. Mercedes Benz was
impressed by the Mayor’s Dinner event and contacted the Community Partnership
Coordinator to discuss other opportunities with the Town of
As a
result a number of meetings between Town staff and Mercedes Benz have taken
place. Mercedes Benz was presented with
a proposal outlining marketing partnerships opportunities with the Town. As
discussions between the Town and Mercedes Benz progressed it became apparent that
naming the east rink of the Angus Glen Community Centre was an option that
appealed to Mercedes Benz.
The
naming discussions have included the President of Mercedes Benz, the Director
of Marketing for Mercedes Benz and the Sales Manager of Mercedes Benz
Markham. The Town has been represented
by the Manager of Marketing and Community Partnerships and the Coordinator of
Community Partnerships.
PARTNERSHIP DETAILS:
Mercedes
Benz has agreed to offer the Town $20,000 per year for each of the next three
years for the non-exclusive interior
naming rights to the east arena pad at Angus Glen Community Centre.
Mercedes
Benz will gain the following benefits from this agreement:
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The interior door entrance
to the east rink will be wrapped with the Mercedes Benz logo
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The Mercedes Benz logo will
be painted at centre ice
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Two (2) backlit signs at any
two of the community centres in
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One 8x16 backlit sign
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One 4x12 backlit sign
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Five (5) rink board
advertisements across the Town.
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The Zamboni at the Angus
Glen Community Centre will be wrapped with a Mercedes marketing design
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One evening or one afternoon
once a year where the employees of Mercedes Benz can have a family skate for a
two hour time period
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Four (4) times a year to
have a Mercedes Benz car on display on the exterior grounds of the Angus Glen Community
Centre
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A full page advertisement in
the Fall and Winter recreation guide – 80,000 guides in circulation per issue
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A public media launch with
the Mayor and Members of Council announcing the naming commitment Mercedes is
making at the site
Mercedes
Benz will supply all artwork. The visual
displays for this partnership will be subject to approval from the Town of
The
Mercedes Benz logo will be painted at centre ice on or about
If
sold on an individual basis the total revenue to the Town would be
$25,000. This includes:
Backlit Signs $ 9,500
Rink Boards
4,000
Zamboni Wrap 7,500
Recreation Guide 4,000
$25,000
The
initial cost to service this package would be:
Backlit Signs} $10,000
Rink Boards }
Zamboni Wrap 1,500
Recreation Guide 1,000
$12,500
This
would create a new profit of $12,500. Staff
has not been successful in the past in selling “multi-year” agreements. The longer term agreements allow the cost of
hardware and servicing to be spread over a longer term thereby improving
profitability. This is also the first
time staff is looking at a full naming package.
Mercedes Benz will receive additional value in a centre ice logo, door
wraps and a yearly recreational skate.
MERCEDES BENZ AGREEMENT IS AN IMPORTANT FIRST STEP
In
June 2004 Council endorsed a partnership policy that allowed for interior
naming of Town assets subject to Council approval. The opportunity to sell naming rights was
identified as part of the Revenue Acceleration Strategy. Naming opportunities in Town facilities
appeal to corporate clients and can generate additional revenue to supplement
program costs and enhance operating budgets.
In
the fall of 2004, staff released a Request for Expression of Interest (RFI)
inviting proposals related to community partnerships. There were no submissions to the RFI. Since that time staff has proactively
pursued community partnership opportunities with organizations that would be
seen as a good fit with the Town’s corporate goals. Mercedes Benz is a good fit in all areas.
Mercedes
Benz will receive valuable exposure for their commitment and the Town will
begin to create awareness of interior naming opportunities. Appendix A provides a visual impression of
the impact the Mercedes agreement will have on the east arena ice pad. These impressions are conceptual and the
final artwork may change, the intent is to demonstrate the impact. It is important to note that this interior
naming arrangement is non-exclusive and does not preclude the Town from naming
other areas of the facility.
There
are opportunities to repeat this process for the west arena pad and the
gymnasium within the Angus Glen facility.
Staff is optimistic that an interior naming revenue stream will become
more fully developed at Angus Glen Community Centre over the next 12-18
months. The Mercedes Benz agreement is
an important first step toward executing a longer-term strategy. With the Mercedes Benz agreement as a
catalyst, staff believes that a market exists to realize potential revenue at
Angus Glen Community Centre as outlined in Table 1.
TABLE 1
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Item |
Gross
Revenue (Annual) |
Notes |
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Interior
Naming: West
Rink East
Rink Gymnasium |
$25,000 $25,000 $15,000 |
Naming
agreements for more than 1 year will receive discount pricing |
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Rink
Board Advertising |
$20,000 |
Includes
22 rink boards at average sale price of $1,000. Two rink boards are allocated to naming. Over
the next three years the sales objective is 54 rink boards town-wide. |
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Back
Lit Signs |
$50,000 |
Includes
12 back lit signs distributed in Arena(s) only. Total capacity is 12 signs but two 8’x16’
signs are allocated to Naming. |
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Total (Potential) |
$135,000 |
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In
addition, there is the potential for additional product development. For example there is the ability to package
and sell additional ice logo space.
The
$135,000 potential is a conservative estimate as there is an opportunity to
expand and extend the backlit sign effort into other parts of the facility.
Extending
interior naming and back lit sales to other major community centres will take
place as the Town and the community “comfort level” is established.
Expenses and Resources
There
are expenses for hardware and electrical hook-ups related to the sale of back
lit signs. With respect to the Mercedes
Benz agreement these costs have been deducted from the first year revenues. In effect they have been amortized in the
first year versus over a 10-15 year life cycle.
As
this product line develops there will be a need to review resource
allocation. At present the area is
adequately resourced to proactively pursue naming, back lit signs and rink board
sales. Resource challenges will emerge
as more partners come on line and as the product line is extended to other
locations. As the partner list grows,
the demand for building the partner relationship and customer service will
begin to grow. In the future, the
balance between gross revenue generation and additional resources will need to
be considered.
FINANCIAL CONSIDERATIONS:
The
total partnership commitment from Mercedes Benz represents a non-refundable
$20,000 payment on an annual basis for each of the next three years.
Length of Agreement
Mercedes
Benz has agreed to partner with the Town of
Payment Dates and Distribution of Funds
The
$20,000 payment per year will be paid quarterly by Mercedes Benz. The first
payment will be required within 45 days of the agreement being executed. The payments will be made on a quarterly
basis through the life cycle of the agreement.
TABLE
2 below outlines the one time cost for back lit sign hardware, electrical work
and rink boards required to put the naming agreement in place.
TABLE 2
Distribution of Funds
In
2005, the cost to establish/ service the naming agreement is:
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$8,600 for a one time set up
fee for the backlits, rink boards and ice display
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$1,400 for the centre ice
logo
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$2,000 directed to
The
annual net revenue for all three (3) years will be directed toward the Town of
ENVIRONMENTAL CONSIDERATIONS:
None
ENGAGE 21ST CONSIDERATIONS:
Alignment to Corporate Goals
Fiscal
Stewardship
Quality
Community
Economic
Development
This
partnership with Mercedes Benz is in keeping with the Town of
BUSINESS UNITS CONSULTED AND AFFECTED:
The Community and Fire Services Commission, The
Angus Glen Facility Manager, The Director of Recreation and Culture and Legal
Services have reviewed this partnership in concept and/or have reviewed or
provided input into this report
ATTACHMENTS:
Appendix
A – Visual Impact of Interior Naming at Angus Glen East pad
Appendix
B – Partnership Policy
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Stuart Taylor, Director, Strategic Services |
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Jim Sales, Commissioner, Community and Fire
Services |
Q:\Strategic Services\Shared Data\Reports\General
Committee\Mercedes Benz naming.doc
