A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AMENDMENT NO. 2 TO THE AGREEMENT WITH COCA-COLA NORTH AMERICA AND COCA-COLA BEVERAGES FLORIDA, LLC (COCA-COLA), WHICH IS SET TO EXPIRE ON DECEMBER 31, 2021; SAID AMENDMENT (1) EXTENDING THE AGREEMENT, ON A MONTH TO MONTH BASIS, FOR A PERIOD NOT TO EXCEED SIX (6) MONTHS, AND (2) REMOVING THE ENERGY BEVERAGE CATEGORY FROM THE AGREEMENT, WHICH CATEGORY WILL BE THE SUBJECT OF A SEPARATE AGREEMENT WITH RED BULL NORTH AMERICA, INC; AND FURTHER AUTHORIZING THE CITY MANAGER AND CITY CLERK TO EXECUTE THE AMENDMENT, UPON FORM APPROVAL BY THE CITY ATTORNEY.

The City of Miami Beach (the "City") entered into a sponsorship agreement for the non-alchohol pouring rights at several city of Miami Beach owned venues, dated March 14, 2012 (the "Agreement"), with Coca-Cola North America, a division of the Coca­ Cola Company, and Coca-Cola Refreshments USA, Inc. d/b/a Florida Coca-Cola Bottling Company ("Coke Florida"), for a term beginning January 1, 2012 and ending on December 31, 2021.

On March 1, 2017, the Mayor and City Commission adopted Resolution No. 2017-29774, approving the assignment of Coke Florida's interest in the Agreement to Coca-Cola Beverages Florida, LLC in connection with the sale of Coca-Cola North America assets to Coke Florida.

The parties executed an assignment and assumption agreement, dated March 29, 2017, assigning Coca Cola's interest in the Agreement to Coke Florida.  Coke Florida‘s contract is set to expire December 31, 2021.

With the expiration of the City’s current agreement with Coke Florida as the non-alcoholic beverage partner, on December 31, 2021, the City is requesting the Mayor and Commission to extend the current contract on a month-to-month basis as of January 1, 2022 and not to exceed six (6) months.

The City, through our municipal sponsorship consultant, Spectra Partnerships, initiated a selection process for a new non-alcohol pouring rights partner and invited those companies to submit proposals, including an additional round of ‘best and final’ proposals, and a recommendation of a final offer for the City to consider.  Coca-Cola Beverage Florida, LLC (Coke Florida) and PepsiCo (Pepsi) submitted ten-year proposals; Dr. Pepper did not submit a proposal, and Red Bull North America, Inc. (Red Bull) submitted a five-year proposal.  All companies enjoy a strong brand presence, with existing partnerships that include professional sports and large events, as well as well-known venues.

Based on Spectra Partnerships review of the initial proposals submitted, Coke Florida, Red Bull, and Pepsi were each invited to submit a “best and final" offer. They each presented proposals that provided a combination of an annual sponsorship fee, as well as a structure for additional revenues to the City from sale of products (either vending or dispensed), and potential marketing opportunities. Spectra Partnerships evaluated the short and long-term benefits, both financial and intangible, to the City, and recommended that the City enter negotiations with Coke Florida and Red Bull as the City's official non-alcohol beverage and energy drink partners. 

Upon further review and consultation with stakeholders and members of the Commission, the administration was provided with feedback regarding the proposals, and felt that further consideration with the Coke Florida proposal would be prudent, to explore additional options presented in the review phase.

In order to explore these options, the City withdrew the Coke Florida sponsorship agreement from the December 8, 2021 agenda to look at options including but not limited to, further negotiations with existing entities, negotiations with additional third party brands for each category, and the pros and cons of not having a blanket pouring rights agreement.

Coke Florida currently oversee 25+ vending machines and equipment throughout City facilities including maintenance and inventory management, and the cancellation of the existing contract would result in that collateral and products being removed on December 31, 2021, and the City being responsible for sourcing their own equipment, as well as the labor involved in installation, maintenance, and inventory management.  Coke Florida estimates the equipment to be worth $100,000+, for which the City would need to find a funding source, if the current contract were allowed to expire.

Based upon the foregoing, the City Manager recommends that the Mayor and Commission approve the extension of the existing Coke Florida contract, with the exception of the energy drink category, on a month-to-month basis, for a period not to exceed six (6) months, to ensure business continuity and to avoid interruption to the current services and revenue streams within City facilities included within the existing agreement as set forth in the City Commission Memorandum accompanying this Resolution.