At the July 13, 2018 Finance and Citywide Projects Committee Budget Briefing Meeting, multiple options were presented as alternative ways to provide revenue to the City. The options included Advertising on the exterior of trolleys, large-scale sponsorships throughout the City such as park naming rights and naming rights to the Miami Beach Convention Center and advertising on the back side of the fleet-management building.
Each of these items present both positive and potential negative implications and as such, staff has since met to discuss the items in detail. Discussions included potential legal, planning and historic preservation implications. Each option is expanded further below.
ADVERTISING ON THE EXTERIOR OF TROLLEYS
Previously, on the temporary Alton/West Trolley, advertising was sold by the city’s development coordinator. Each trolley garnered $2,150 per month in revenue or $78,000 per year for 3 trolleys, solely for advertising on the exterior windows.
The City now has 25 trolleys that operate city-wide. Upon implementation of these trolleys, staff was given direction to create a cohesive branding for the trolleys and no longer allow advertising on them. Thus, a design was adopted by Commission and all trolleys have a similar design that showcases the different iconic lifeguard stands throughout the City.
Since the July 13, 2018 Finance and Citywide Projects Committee Budget Briefing, the administration researched the possibility of piggybacking and working with Outfront Media, the company that is currently contracted to sell the advertising on the City of Miami trolley system, to sell advertising on the exterior of all trolleys in Miami Beach. There is approximately one year and six months remaining on the contract with the City of Miami. If approved, sales would begin immediately and Outfront has stated that we could add $500,000 in revenue to the FY19 budget. The City of Miami contract with Outfront Media, including all extensions and renewals, is attached for your review.
SPONSORSHIPS THROUGHOUT THE CITY, INCLUDING MIAMI BEACH CONVENTION CENTER NAMING RIGHTS
In 2007 the City hired a consultant to do a thorough assessment and inventory of all possible sponsorships throughout the City as well as possible revenue amounts for each item. After the completion of the assessment, the consultant was retained to begin the sales of these sponsorships, in addition to the sponsorship sales that were managed by the city’s development coordinator. The consultant focused on larger sponsorships and brought in the current contract between the City and Coca-Cola while the development coordinator focused on individual event sponsorships and advertising in MB Magazine.
The Coca-Cola contract currently generates $325,000 per year in cash as well as $60,000 in in-kind revenue and 450 cases of free product per year. The free product is used for city events such as the Veterans Day Parade, Fire on the Fourth as well as donated to outside events such as Art Deco Weekend. The contract was originally signed for a total of 10 years and will be up for renewal option in 2022.
The contract expired with the sponsorship consultant, was not renewed and the City’s development coordinator continued selling advertising and sponsorships for the City. Since the inventory was completed, the internal sponsorship and advertising coordinator has drastically increased the total alternative revenue being generated for the City - with totals of both cash and in-kind now reaching $1 Million per year. Some of the items included in this total are event sponsorships such as Fire on the Fourth, Veterans Day Parade, Family Service Day, Parks and Recreation sponsorships and advertising sold in the MB Magazine.
Many large parks and convention centers throughout the country utilize naming rights revenue to provide alternative revenue. The following chart shows some arenas and convention centers that have previously garnered naming rights revenue for their facilities. The newly renovated Convention Center would be a candidate for such option.
Staff met to discuss the possibilities of naming rights and what may need to be done to allow this. During the discussion, it was mentioned that, per the current City Code, the naming of the MBCC may have to go to referendum. All possible sponsorships would have to be presented to Commission for final approval prior to contracts being finalized. Administration could create a Request for Letters of Interest through the Procurement department to obtain a contractor to begin to pursue these types of sponsorships.
EXTERIOR ADVERTISING ON THE BACK OF THE FLEET BUILDING
The City of Miami Beach fleet building provides a great location to place signage that would only be seen by cruise ship passengers as well as boaters in the area that enter and exit the Port of Miami. The Port of Miami has approximately 5.3 million passengers each year. Murals of this size have potential to sell for more than $20,000 per month or $240,000 per year.