COMMUNITY SERVICES & ENVIRONMENT COMMITTEE
	TO:	Mayor & Members of Council
	FROM:	Stuart Taylor, Strategic Services
	PREPARED BY:	Same As above
	DATE OF MEETING:	10-May-2004
	SUBJECT:	Interior Naming Rights Policy

RECOMMENDATION:

THAT Council approve the updated “Naming of Facilities and Parks” policy outlined in Appendix A.

PURPOSE:

The purpose of this report is to recommend a policy and process for providing third parties the opportunity to secure interior naming rights and customized sponsor positioning within the interior of corporate assets.

BACKGROUND:

On November 10, 1998 Council approved a policy for naming of facilities and parks (attached as Appendix B). The approved policy was focused on the naming of parks and exterior name of buildings. The opportunity to sell naming rights was identified as part of the Revenue Acceleration strategy. Staff are recommending adjustments to the existing naming policy that will allow interior naming opportunities to be pursued. Interior naming opportunities in Town facilities can appeal to corporate clients and can generate additional revenues to supplement program costs and enhance operating budgets.

There are some good examples of local governments that have leveraged naming rights, customized sponsorship and advertising programs into revenue streams. For example;

• The Iroquois Park Sport Centre in Whitby includes six indoor ice pads, an indoor pool, a food court, Pro shop, a restaurant and outdoor facilities. Iroquois Park attracts two million visitors a year and generates $300,000 annually through interior naming and advertisements.

• The City of Burlington was able to generate about $1.6M in naming, sponsorship and grant funding related to a waterfront park redevelopment;

• The Town of Whitchurch-Stouffville entered a ten year exterior naming agreement on a facility with a total cash value of $500,000;

• The City of London recently entered a naming and pouring (beer supplied by Labatt’s) agreement with Labatt’s valued at $5,000,000 over 10 years.

Staff is seeking Council approval to include interior facility-naming privileges in discussions with potential partners. Staff would focus these discussions on interior naming opportunities. Interior naming would be bundled with other exposure and a package would include;

· Logo exposure within an interior focal point (centre ice logo in arenas)

· Rink board advertisements

· Backlit signs

· Recreation and Culture Guide

· Information dissemination

· Couponing

· Consumer promotion opportunities

The type of package would be dependent on the attributes and opportunity presented by the facility and customized to the needs of the client. An integrated approach to packaging interior naming opportunities will leverage larger dollar amounts and maximize our return. The intent of the proposed policy is to allow these types of discussions to evolve and progress. Concrete proposals will be screened through staff and be brought forward for Council consideration.

It is proposed that facility naming be based on the proposed guiding principles and process as outlined in Appendix A attached. Staff recommend;

· All proposals related to naming a corporate asset will be approved by Council

· The proposed policy will not supersede existing naming policy in the Town unless Council makes an exception (see attached Appendix B for existing policy)

· Existing corporate assets named after an individual will not be considered for naming

FINANCIAL CONSIDERATIONS:

The 2004 budget identified revenue strategy initiatives with a total value of $725,000. Naming is one of the initiatives identified within the revenue strategy.

A preliminary opportunity scan indicates the Town has approximately six facilities with the potential to attract interior naming interest. This includes;

· Markham Theatre lobby area

· Angus Glen East ice pad

· Angus Glen West ice pad

· Thornhill Community Centre East ice pad

· Centennial Community Centre ice pad

· Mount Joy ice pad and soccer

Secondary targets include packaging the following;

· Milliken Mills ice pad and pool

· Armadale and Angus Glen Gymnasium

· Milliken Mills Soccer Dome

Determining Market Value of Interior Naming

The market in Whitby at the Iroquois Park facility indicates that interior naming, complimented with back lit sign advertising and rink board advertising has a value of approximately $30,000 per ice pad. Iroquois Park is a unique six pad arena complex that attracts two million visits on an annual basis.

It is difficult to establish a set price and establish a value for interior naming in Markham for a number of reasons. First, the idea is established in the professional sport facilities but is relatively new to local venues. In the local market naming opportunities have usually been created around capital building campaigns where parts of a building are “named” subject to a significant capital donation toward building construction. This is a common effort that is used by the Arts community, the YMCA and the City of Burlington did this to a certain degree with the Tansley Woods Community Centre that opened in the mid-1990’s. Finding benchmarks for interior naming is difficult because the proposed approach is relatively new to the market, and the existing benchmarks may represent unique opportunities.

Second, price for this type of activity is driven by a combination of market demand and the opportunity for market exposure. It is not anticipated that the traditional municipal approach of releasing a Request for Expression of Interest would stimulate a response from the market. However, it is in the better interests of the Town to advertise and/ or release a Request for Expressions of Interest document to ensure that the Town is transparent and fair in providing all stakeholders with the opportunity to submit a proposal for interior naming.

In the event that there is limited response the Town will proactively approach potential partners regarding interior naming opportunities. The Town will need to identify potential partners, complete basic market research on the partners, put together a customized sales package to attract the partner and approach the partner to point out the benefit of the interior naming opportunity and determine their interest. These actions would only take place after all Request for Expression of Interest submissions have been exhausted.

Interior naming in Markham has the potential to attract $20,000 to $25,000 per facility on an annual basis. Interior naming could create gross revenues of about $200,000 per year. There is opportunity to augment this revenue through back lit signs and rink board advertisements. The primary target for this effort is the new Angus Glen Community Centre. Angus Glen is attractive for interior naming and has the opportunity for back lit signs in the arenas. There will be one time and ongoing expenditures to service naming agreements. Complete financial details would be documented within each naming proposal. In general, the return on investment is expected to be 60-70%. Net revenues generated from this program should be credited against the Revenue Acceleration strategy.

BUSINESS UNITS CONSULTED AND AFFECTED:

Recreation and Culture has reviewed this report.

ATTACHMENTS:

Appendix A – Revised Naming of Facilities and Parks

Appendix B – Naming of Facilities and Parks

Stu Taylor, Director, Strategic Services

Jim Sales, Commissioner, Community & Fire Services