The Administration recommends that the Mayor and Commission adopt the Resolution.

On December 8, 2021 the Mayor and Commission approved Resolution 2021-31965 (attached), waiving, by 5/7th vote, the formal competitive bidding requirement, finding such waiver to be in the best interest of the city, and authorizing the City Manager to negotiate an agreement with Red Bull North America, for an exclusive municipal marketing pouring rights agreement in the energy drink category for vending and dispensing on certain city-owned properties, based upon the essential terms set forth in the city commission memorandum accompanying the item resolution, for a term of five (5) years; further, authorizing the City Manager to finalize and execute the agreements, subject to form approval by the City Attorney.

The Administration and Red Bull North America began contract negotiations and in addition to the agreed upon terms set forth in the December 8, 2021 agenda item, the Administration agreed to include additional benefits to Red Bull North America, as it was deemed to be favorable to both entities in terms of financial impact and brand awareness.

In addition to the business terms outlined in the December 8, 2021 Commission Agenda, the Administration would like to add the following items to the final agreement, which having a financial component, require approval from the Mayor and Commission:

Advertising & Sponsorship Rights

1.     Special Event Permit Fee Waiver - waiver of any Special Event Permit and/or Permit Application Fees for Red Bull North America’s use for two (2) mutually agreed upon event(s) per Year, based on availability and meeting all approvals as set forth in the City’s Special Event Permit approval process.  For purposes of the Special Event Permit and / or Permit Application Fee waiver, these Facilities shall include public beachfront areas, and Parks and Recreation facilities where Special Events are permitted.  The City shall only waive fees up to a maximum of $25,000 per event, and solely for permit or square footage fees for which the city has no hard cost.  All other costs and ancillary fees including but not limited to production, taxes, security, audio/visual, decoration, parking or food and beverage shall be the responsibility of Red Bull North America.  Rights may not be transferred or assigned and do not carry over into future Years.

The Administration is in support of this benefit as Red Bull North America is globally recognized as producing some of the top events and brand activations, and this will incentivize them to bring those events to Miami Beach.

2.     Product Sampling - Up to two (2) royalty free Product Sampling permits per month (up to $2,500 per permit per month, and up to $60,000 per Agreement Year), to a maximum of twenty-four (24) permits per Year.  Permit waiver shall only cover permit fee costs for which the City has no hard cost. If Red Bull North America does not use all twenty-four (24) permits by the end of the Year, any remaining permits will not roll-over to the following Year and will be forfeited.  All other fees and costs of production, including but not limited to taxes, security, audio/visual, decoration or food and beverage shall be the responsibility of Red Bull North America.  Rights may not be transferred or assigned and do not carry over into future Years.

The Administration is in support of this benefit as Red Bull North America sampling activations are highly engaging and recognizable and will not only bring awareness to our new partnership, but will bring brand awareness to the Red Bull North America brand with the intent of driving sales at City owned venues, resulting in higher consumption and financial rebates back to the City.

3.     Vending Sales Rebates – Red Bull North America will contract with a third-party vendor to execute city wide vending services.  The City will receive a vending rebate of $5 /per case for each case sold in vending machines placed on City property or within City venues.

The Administration is in support of this benefit as it was not included as part of the initial agreement and will further increase revenues to the City by allocating $5 from every case of Red Bull sold in vending machines, back to the City in the form of a rebate.

4.     Advertising Benefits.  Red Bull North America shall have the following advertising benefits, which do not have an actual out-of-pocket expense to the City: (1) one (1) royalty free advertisement in any City-produced event collateral as the “Official Energy Drink of Miami Beach”; (2) one (1) royalty free Red Bull North America PSA or message per year to be aired on MBTV; and (3) one (1) royalty free Red Bull North America PSA or message per year to be aired on the Miami Beach trolley video screens, with above advertising benefits having no additional costs to the City; and

The Administration is in support of all of the above-mentioned advertising benefits as they will draw attention to our new partnership, while elevating the Miami Beach brand and driving consumption and sales, resulting in higher revenues for the City. 

The contained items will have the following financial impact:

Special Event Permit - up to $25,000 per permit x 2 permits = $50,000 in fee waivers per Contract Year.  This benefit has no negative financial impact, as these waived fees would be unrecognized revenues.  These waivers cannot be used for any hard costs or where the City has an expense to be paid.

Sampling Permits - up to $2,500 per permit x 24 permits = $60,000 in waived fees per Contract Year.  This benefit has no negative financial impact. 

Vending Rebates – the City will receive a cash rebate of $5 / case sold in every Red Bull North American vending machine placed throughout the City and City venues.

Advertising Benefits - $0.00 - the City has no costs associated with these benefits and this benefit will only increase brand awareness, which in turn can help increase sales of Red Bull North America product, resulting in higher revenues due to the City under the agreement.