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.

On September 26, 2018, the City Commission adopted Resolution No. 2018-30518, accepting the recommendation of the Finance Committee at its September 14, 2018 meeting, and approving and authorizing the City Administration to obtain advertising services for the City’s trolleys from the City of Miami trolley advertising contract with Outfront Media.  The Mayor and City Commission also directed City staff to bring the remaining alternative revenue streams recommended by the Committee to the next full City Commission meeting for further discussion.

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. Two articles regarding the topic have also been attached for your reference.

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. The agreement with the previous contractor has been attached for your review as a possible format for a contract moving forward.

 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. 

Staff is exploring the opportunity of working with a company that currently sells this type of advertising in other municipalities for the possibility of allowing them to include this sign in their catalog of possible signage in the area. 

On September 14, 2018 staff presented this information to the Finance and Citywide Projects Committee and it was recommended that the City’s Marketing and Communications Department move forward with large-scale sponsorships throughout the City and the sale of advertising on the back of the fleet building.