MEMORANDUM NO. 04-20(A)

DATE: January 21, 2004

TO: Mayor Cushing / Homer City Council

FROM: Walt Wrede

SUBJECT: Homer Multi-Purpose Recreation Facility / Advertising / Naming Rights

The Memorandum of Understanding between the City of Homer and the Homer Hockey Association anticipates that the parties will need to discuss various revenues issues at some point in the future, including, but not limited to advertising and concessions. The parties anticipated that these issues will be addressed in a separate agreement that will then be incorporated in the MOU.

HHA has been doing a great deal of work on its fund raising campaign. It has already sold much of the available advertising space on the ice rink sideboards. HHA is also actively discussing selling advertising space in other areas of the arena, on the zamboni, and on uniforms that teams may wear. As you probably know, selling advertising space and the solicitation of corporate sponsors is common practice in hockey arenas and sports facilities around the country. HHA is also planning to honor and recognize donors in other ways including possibly, a wall of plaques.

One issue that has come up that was not anticipated in the MOU is the idea that we might sell naming rights to the facility to a corporate sponsor or other donor who reaches a certain contribution level. As you probably know, this is also a common practice around the country and many sports facilities now have corporate names. This issue was raised by HHA at the last meeting of the Project Review Committee on January 14^th. HHA believes that there are corporate sponsors out there who would be interested in this. The contribution level that was discussed was $50,000 per year for 10 years. The revenue from the first three years would be used for capital costs and the revenue from the last seven years would be used for maintenance and operations.

HHA brought this issue to our attention because it thought that something like this should have the endorsement of the Homer City Council. HHA recognizes that this could be a politically sensitive topic and that ultimately, this will be a City owned facility. We agreed that this issue should go before the Council for those very reasons.

The City representatives at the meeting (Mayor Cushing, Councilman Stark, Anne Marie, Beth, Dean, Carey, and myself) appeared to generally agree on several points (although we did not get together to discuss them as a group). They were:

• If naming rights are permitted, we should make it clear to the sponsor that they will not be allowed to turn the outside of the building into a billboard. They will have to comply with the sign code (and other pertinent zoning and building codes) and corporate colors should not be allowed.
• Selling advertising space inside the building, on equipment, on uniforms, etc is OK
• The plan to use the first three years of revenue for capital costs and the remainder for M&O is good
• The idea of selling naming rights to the building causes some concern and reservation. This has the potential to be controversial in Homer and a number of us were uncomfortable with the notion that everything is for sale for the right price. Some felt that it would be better to name the hockey rink itself after a sponsor rather than the entire building.

RECOMMENDATION: The Manager’s recommendation is that the Council:

• Approve the selling of advertising space but stipulate that it be subject to a plan approved by both parties Homer Hockey Association and by the Homer City Council and that the plan be incorporated into the advertising and concessions agreement referenced above.
• Endorse the fund raising and revenue allocation strategy whereby the first three years of advertising and/or naming rights revenues go to the capital campaign and the remainder to M&O
• Permit the selling of naming rights for the sheet of ice, the hockey rink itself, or possibly other things in the plan approved by City Council (ie., the scoreboard) but not the building itself.