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Council/Agency Meeting Held: 98 �C �aDD•/a
Deferred/Continued to:
Ap roved ❑ Conditionally Approved ❑ Denied Y City Clerk's Signature
Council Meeting Date: April 6, 1998 Department ID Number: CS 98-012
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
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SUBMITTED TO: . HONORABLE MAYOR AND CITY COUNCIL MEMBEIIS
SUBMITTED BY: RAY SILVER, Acting City AdministratorCD
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PREPARED BY: RON HAGAN, Director, Community Service
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DARYL D. SMITH, Acting Director, Public Works
ROBERT FRANZ, Director, Administrative Servic s
SUBJECT: APPROVE AGENT'S CONTRACT FOR NAMING RIGHT
/CORPORATE PARTNERING PROGRAM fb#1ST/6nA1- 40111 W VIR.
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment
Statement of Issue: Should the city hire expert representation to develop and negotiate a
naming rights/corporate partnering program for the Pier Plaza project?
Funding Source: Pier Plaza Fund will be an enterprise fund. The startup costs of $30,000
will be advanced from the Pier Plaza Fund and reimbursed through naming rights/corporate
partnering revenues.
Recommended Action:
1. Motion to approve the attached contract with Schulte Sports Enterprises (SSE) for
naming rights/corporate partnering, and authorize the Mayor and City Clerk to execute;
2. Motion to approve an amendment to the FY97/98 Pier Plaza Fund budget to allocate
$30,000 of contingency into the new Pier Plaza Fund for project startup costs,
3. Motion to authorize the expenditure of$30,000 from the Pier Plaza Project Contingency
Fund for startup costs for print materials/brochures and agent's draw to be reimbursed,to.
the Pier Plaza Fund from the commissions paid to Schulte Sports Enterprises upon
receipt of revenue; and
4. Motion to direct staff to work with.Schulte Sports Enterprises to develop a naming
rights/corporate partnering benefits package to bring back to City Council for approval for
the Pier Plaza project.
REQUEST FOR COUNCIL ACTION
MEETING DATE: April 6, 1998 DEPARTMENT ID NUMBER: CS 98-012
5. Motion to approve waiver of professional liability insurance requirement as recommened
by the settlement committee on March 11, 1998.
Alternative Action(s):
1. Do not approve the contract with SSE for a naming rights/corporate partnering program,
and direct staff to solicit further proposals.
2. Do not proceed with a naming rights/corporate partnering program for the Pier Plaza at
this time.
Analysis: Per Council direction, staff has solicited requests for qualifications for a firm
to represent the city in negotiating and overseeing the naming rights/corporate partnering
program for the Pier Plaza. A staff committee (Bob Franz, Administrative Services Director;
Les Jones, former Public Works Director; Daryl Smith, Acting Public. Works Director; and
Ron Hagan, Community Services Director) interviewed two firms and has selected Schulte
Sports Enterprises of 'Huntington Beach to recommend to the City Council as the city's
agent in developing the naming rights/corporate partnering program. Schulte Sports
Enterprises (SSE) is an organization designed to address corporate America's involvement
in sponsorships, naming rights, and overall affiliations with external marketing opportunities.
SSE's experience includes representation of the client.side of corporate America, as well as
working directly for such Blue Chip companies as Harte-Hanks, Pepsico, Hunt Sports, FIFA
World Cup 94, Burger King Corporation, J. Walter Thompson, Major League Baseball, NFL,
NBA, NHL, etc. Their most recent projects include the Super Bowl Cruise, Pacific Bell
Ballpark (SF Giants), Las Vegas Domed Stadium, Major League Baseball Fanfest, NHL
Fanfest, 1998 USGA Senior Open, and production of a corporate sponsorship magazine
called Executive Events.,
As an agent for the city, SSE would work closely with the City Council, City Administrator,
and assigned city staff to implement the naming rights/corporate partnering program. Staff
currently envisions the program to include a primary venue site, i.e., the city's Pier Plaza,
and secondary venue sites such as:the proposed youth sports complex and the GTE eques-
trian event site. Staff feels that initially the program should focus on obtaining official nam-
ing rights/corporate partnering for Pier Plaza with future consideration of other venues.
Doing naming rights/corporate partnering deals is a complicated process, requiring
utilization of an expert in this field. For the first time, the city would be tapping into corporate
America's marketing and advertising dollars to provide a revenue stream 'for the
maintenance and improvement of public facilities. In Council's :recent approval of the
naming rights/corporate partnering concept, they indicated the city's need to look for new
revenue sources other than the General Fund and taxes to operate public facilities.
Staff believes that naming rights/corporate partnering can be a win-win situation for both the
public and the corporations involved. The city will be able to dedicate a revenue stream to a
specific operation, i.e., the Pier Plaza, and enhance the normal level of maintenance,
security, equipment replacement, etc. that it would normally be unable to do if this project
had to compete with other General Fund activities. Corporate America will win because of
0030262:01 -2- 04/02/98 11:30 AM
REQUEST-FOR COUNCIL ACTION
MEETING DATE: April 6, 1998 DEPARTMENT ID NUMBER: CS 98-012
its name recognition and marketing benefits from being involved in the Pier Plaza and other
city facilities.
To make the program work, the city will have to enter into a rather detailed agreement
outlining the benefit terms and conditions, amounts and performance requirements of
both the city and the corporate sponsor, to set the value of the naming
rights/corporate partnering program, to negotiate the rights, to write the contracts,
and to oversee the audit control of the revenue receipt. These services require the
involvement of a company with this expertise and experience.
Consequently, staff is recommending that the city enter into a commission agreement with,
Schulte Sports Enterprises to act as the city's agent in performing these services with the
city retaining all authority for all final decisions. City Council would have to appropriate
$30,000 in start-up costs for print materials/brochures and agent's draw from the Pier Plaza
Fund. This money would be deducted from the 5 percent commission that would be
paid to SSE upon receipt of revenue from successful naming rights/corporate
partnering contracts that SSE provides to the city and returned to the Pier Plaza Fund.
While the exact amount of revenue from this program has yet to be determined, preliminary.
research indicates that this would be a substantial revenue generator for the Pier Plaza
project. If the city does not have an additional source of revenue to operate and maintain
Pier Plaza, it will not be able to provide the level of service acceptable to the public. The
tradeoff,,.of course, is the commercialization of Pier Plaza in order to gain the revenue.
However, staff is confident that a program can be put together that will be very tasteful with
appropriate corporate sponsors that while providing for the number of visible impressions of
the corporate logo/name, will'still be consistent with the beautiful design of the Plaza.
Again, City Council will have all final authority over any benefit rights that a corporate
partnering contract would propose. Attached is a presentation prepared by SSE on the
naming rights/corporate partnering program for the Pier 'Plaza project. At the March 11,
1998, Settlement Committee, the professional liability insurance requirement for Schulte
Enterprises was waived. This program is consistent with the Recreation and Community
Services Elements 1.1 and 1.1.4 of the General Plan
Attachment(s)•
City Clerk's
P. • - Number No. Description
1. Agreement w/Schulte Sports Enterprises
2. Schulte Sports Enterprises Presentation
3. Letter from Timothy M. Connolly, Hunt Sports Group
0030262.01 -3- 04/01/98 8:22 AM
AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH
AND SCHULTE SPORTS ENTERPRISES FOR APPOINTMENT OF
AN AGENT FOR THE NEGOTIATION AND PROCUREMENT
OF A NAMING RIGHTS AGREEMENT TO PIER PLAZA
Table of Contents
Section Page
1 Term 1
2 Appointment and Authorization of Agent 1
3 Agent's Duties 2
4 Compensation and Expenses 3
5 Exclusivity 4
6 No Employment; No Representations 4
7 Representations to Sponsors 4
8 Termination 4
9 Entire Agreement; Amendment 5
10 Waiver of Breach 5
11 Assignment; Successors and Assigns 5
12 Hold Harmless 5
13 Controlling Law 5
14 Notices 5
15 Legal Services Sbucontracting Prohibited 6
16 Severability 6
SF:PCD:Agree:Schult
3/31/98
•
AGREEMENT-BETWEEN THE CITY OF HUNTINGTON BEACH
AND SCHULTE SPORTS ENTERPRISES FOR APPOINTMENT OF
AN AGENT FOR THE NEGOTIATION AND PROCUREMENT
OF A NAMING RIGHTS AGREEMENT TO PIER PLAZA
THIS AGREEMENT (the "Agreement") is made and entered effective April 6, 1998, by
and between City of Huntington Beach(CITY), a municipal corporation, and Schulte Sports
Enterprises, a limited partnership (AGENT). In consideration of the mutual promises and
covenants contained in this Agreement, CITY and AGENT agree as follows:
I. Term. This Agreement shall become effective April 6, 1998, and shall continue in
effect until terminated as provided herein.
2. Appointment and Authorization of AGENT
(a) CITY agrees to retain and appoint AGENT to represent it in carrying out
its negotiation and procurement of a naming rights agreement for Pier Plaza, which is located in
the City of Huntington Beach. It is anticipated that the sale of naming rights to Pier Plaza will
generate between $5 million and $7.5 million in revenue over a 10- to 12-year period. In order to
achieve such a naming rights agreement, AGENT shall perform the following Scope of Work:
SCOPE OF WORK
PHASE I
AGENT shall develop a list of business entities that potentially could purchase
naming rights to Pier Plaza. The list shall be presented to the City Council for approval.
PHASE II
Once the City Council approves the list of acceptable businesses, AGENT shall
develop a package of naming rights and/or associated advertising and sponsorship
benefits that could be offered to each identified business entity. The City Council shall
approve each such package.
PHASE III
AGENT shall develop a Marketing Plan for each naming rights package,
describing the types of advertisements that the CITY may be willing to accept. The
Marketing Plan may include brochures, presentations, models and site visits. The
Marketing Plan shall be approved by the City Council.
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SF:PCD:Agree:Schult
3/31/98
PHASE IV
AGENT shall market the Marketing Plan to Council-approved businesses.
PHASE V
AGENT shall negotiate a naming rights agreement with one or more business
entities. AGENT shall obtain letters of intent from each business entity indicating the
entity's willingness to enter into a naming rights agreement for Pier Plaza with the City..
This letter shall be referred to the City Attorney for development of a naming rights
agreement. The naming rights agreement shall be presented to the City Council for final
approval.
PHASE VI
The City Council retains the discretion to disapprove any naming rights
agreement, regardless of whether the Council had previously approved the Marketing
Plan. The CITY shall have no obligation under any circumstances to pay AGENT
commissions for denial of any naming rights agreement, even if the denial was in "bad .
faith."
(b) AGENT shall have no power or authority to contract directly with any third party
in connection herewith or in any manner on behalf of CITY. AGENT shall inform all prospective
parties seeking a naming rights agreement that the City Council of the CITY retains the sole,
unfettered discretion to enter into a naming rights agreement.
:Any naming rights agreement shall be in the name of and executed by CITY and all
details-,of such agreement require written approval of CITY. The AGENT understands that
CITY, in its sole unfettered discretion, may disapprove of any proposed naming rights agreement
in its discretion, and may require time to investigate the appropriateness of the proposed naming
rights agreement before granting or withholding approval.
3. AGENT's Duties. AGENT agrees that he shall:
(a) Exercise his best efforts, using its skill, experience, and knowledge to the
best of its professional ability in providing the services required under this
Agreement.
(b) Inform CITY of any fact or occurrence that affects CITY interests, and
disclose to CITY any personal, business, or financial interest (including
but not limited to any ownership interest in, representation of, or
employment by any person or firm providing any product or service that
competes with any product or service provided by CITY that may actually
or potentially impair or otherwise affect AGENT's ability to represent
CITY's interests to the maximum extent contemplated by this Agreement.
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3/31/98
(c) Not serve any of CITY's competitors with respect to any of the business
entities with whom the CITY is seeking a naming rights agreement,
without prior disclosure to, and specific written approval by, CITY.
(d) Pursuant to the California Political Reform Act, AGENT shall be
considered to be a "consultant" subject to the terms of the Act, within the
meaning of the various regulations the Fair Political Practices Commission
has promulgated concerning consultants. AGENT shall file a Statement of
Economic Interest with the City Clerk upon assuming the position of
AGENT, and subsequently on an annual basis, and upon termination of
this Agreement. Further, AGENT shall comply with California
Government Code Section 1090.
(e) Review and become familiar with Section 612 of the Huntington Beach
City Charter, which prohibits CITY from selling, leasing, exchanging or
otherwise transferring ownership of any CITY park or beach without the
approval of a majority of the electors voting on such a proposition at a
general or special election. AGENT shall propose no corporate
partnership or arrangement to CITY that would require a vote under
Section 612 of the Charter. AGENT shall consult with the City Attorney
of CITY to ensure compliance with this provision.
4. Compensation and Expenses.
(a) AGENT shall receive a five percent(5%) commission on total gross
revenues generated by naming rights agreements procured by AGENT and
approved by CITY. CITY shall pay AGENT said compensation within
sixty (60) days following CITY receipt of the revenues from the naming
rights agreements. The packaging and pricing of naming rights
agreements may be changed by CITY in its discretion from time to time,
and AGENT shall not receive any increased commission as a result of
such change unless AGENT negotiated the change. If CITY's revenues .
from a naming rights agreement are reduced, then the commission due
shall be reduced accordingly. Commissions shall only be paid from total
gross revenues and on a project by project cash accounting basis. CITY
shall have no obligation to pay commissions on benefits received pursuant
to a naming rights agreement where the benefits are of a non-cash nature,
including but not limited to provision of property or services to the CITY.
(b) AGENT shall work exclusively for the CITY for the first 90 days
following execution of this Agreement, through July 6, 1998. In order to
reimburse AGENT his living expenses, CITY shall pay AGENT a draw
against future commissions of Five Thousand Dollars ($5,000.00) upon
execution of this Agreement, and two additional Five Thousand Dollars
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SF:PCD:Agree:Schult
3/31/98
($5,000.00) draws due upon 30 days and 60 days following execution of
this Agreement. The total draws due for living expenses shall be Fifteen
Thousand Dollars ($15,000.00). The draws shall be credited against any
commissions due AGENT.
(c) CITY shall reimburse AGENT's travel and other out-of-pocket expenses,
not to exceed Fifteen Thousand Dollars ($15,000.00). The Director of
Community Services shall approve all expense reimbursements.
5. Exclusivity. AGENT shall have the exclusive right for naming rights agreements
for Pier Plaza for the term of this Agreement.
6. No Employment; No Representations. AGENT agrees that this Agreement is not a
contract for employment and AGENT shall be an independent contractor to CITY. AGENT
shall not receive any salary, bonuses or employment benefits from CITY. CITY makes no
representations or warranties about the total amount of commissions or other remuneration that
AGENT may earn from the procurement of corporate partnership arrangements otherwise.
7. Representations to Sponsors. AGENT shall not make any statements or
representations to prospective sponsors of naming rights or other promotional benefits that could
mislead or confuse the sponsors, and shall indemnify, hold harmless and defend CITY from and
against any and all claims, damages, liabilities, losses, costs, charges, and expenses (including
reasonable attorney fees) resulting therefrom, which may be brought in connection with or
arising from any such statements or representations.
8. Termination.
(a) Any time after ninety (90) days following commencement of this
Agreement, this Agreement may be terminated without cause upon one
month's written notice by either party.
(b) In the event AGENT or any employee of AGENT performing services on
behalf of CITY for the benefit of CITY breaches this Agreement, CITY
shall have the right to terminate this Agreement immediately by giving
notice to AGENT. CITY shall have no obligation to pay AGENT
commissions in connection with any matter for which AGENT was
terminated for cause. Termination of this Agreement by CITY shall not
limit any other right or remedy which CITY may have under this
Agreement, at law or in equity.
(c) In the case of CITY termination without cause, AGENT shall be paid the
commission provided for in Section 4 if the naming rights agreement is
executed within 180 calendar days after the termination of this Agreement,
and the AGENT has had negotiations with the same entity as entered into
the naming rights agreement prior to the final termination of this
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SF:PCD:Agree:Schult
3/31198
Agreement, provided that the CITY had received notice in writing from
AGENT of the names of the prospective sponsors before or upon
termination of this Agreement.
(d) UNDER NO CIRCUMSTANCES SHALL CITY BE LIABLE TO
AGENT OR ANY THIRD PARTY CLAIMING BY OR THROUGH
AGENT FOR CONSEQUENTIAL DAMAGES OR LOST PROFITS.
This paragraph shall survive the termination of this Agreement.
9. Entire Agreement; Amendment. This Agreement comprises the entire agreement
of and between the parties with respect to the subject matter hereof. This Agreement may be
amended or supplemented only by written agreement of CITY and AGENT.
10. Waiver of Breach. Any failure of AGENT or CITY to comply with any provision
of this Agreement may be expressly waived in writing, but such waiver shall not be construed as
a waiver of or an estoppel with respect to any subsequent or other breach.
11. Assignment; Successors and Assigns. AGENT shall have no right to assign, sell,
transfer or delegate, whether involuntarily or by operation of law, any right or obligation under
this Agreement without the prior written consent of CITY. Any purported assignment, transfer
or delegation in violation of this section shall be null and void. Subject to the foregoing limits on
assignment and delegation, this Agreement shall be binding and shall inure to the benefit of the
parties and their respective successors and assigns.
12. Hold Harmless. AGENT shall protect, defend, indemnify and hold harmless
CITY, its officers, officials, employees and agents from and against any and all liability, loss,
damage, expenses, costs (including without limitation costs and fees of litigation of every nature)
arising out of or in connection with performance of this Agreement or its failure to comply with
any of its obligations contained in this Agreement, except such loss or damage which was caused
by the sole negligence or willful misconduct of CITY.
13. Controlling Law. The validity, interpretation, and performance of this Agreement
shall be controlled by and construed under the laws of the State of California.
14. Notices. All notices pertaining to Agreement shall be in writing and shall be
transmitted either by personal hand delivery or through the facilities of the United States Postal
Service. The addresses contained herein for the respective parties shall be the places where
notices shall be sent, unless written notice of a change of address is given.
FOR CITY: FOR AGENT:
Ron Hagan Don Schulte
Director of Community Services President
CITY OF HUNTINGTON BEACH SCHULTE SPORTS ENTERPRISES
2000 Main Street 215 1/4 Main Street
Huntington Beach, CA 92648 Huntington Beach, CA 92648
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SF:PCD:Agree:Schult
3/31/98
15. Legal Services Subcontracting Prohibited. AGENT and CITY agree that CITY is
not liable for payment of any subcontractor work involving legal services, and that such legal
services are expressly outside the scope of services contemplated hereunder. AGENT
understands that pursuant to Huntington Beach City Charter § 309, the City Attorney is the
exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services
expenses incurred by AGENT.
16. Severability. If any provision of this Agreement is invalid, illegal or
unenforceable, the balance of this Agreement shall remain in full force and effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to
all other persons and circumstances.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and the year first above written.
SCHULTE SPORTS ENTERPRISES, a CITY OF HUNTINGTON BEACH, A
limited partnership municipal corporation of the State of
California
By:
DON C LTE o_ .
Its(circle one)Gener Partner/ yo r .
anaging Partne "
ATTEST:
L..
City Clerk �f p Q
APPROVED AS TO FORM:`=`
City Attorney
A
REVIEWED AND APPROVED: INITIATED P OVED:
Dir ctor of C munity Services
Cit dministrator
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SP:PCD:Agree:Schult
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ATTA
CHMENT 111 .
CITY OF HUNTINGTON BEACH
APPLICATION FOR INSURANCE REQUIREMENTS WAIVER OR MODIFICATION
• 1. Name/Title/Department of Requesting Staff Member Ron Hagan, Director, Community Services
2: Date of Request_ 313198
3. Name of Contractor/Permittee Schulte Sports Enterprises
4. Description of work to be performed: .. Act as agent of the city to see _naming
rights to corporate._America. "
5. Length of Contract indefinite
6. TN pe of Insurance Waiver or Modification Requested: -professional liability
(a)Limits: (b).CoN-erage
7. Reason for Request for Waiver or Reduction of Limits Schulte is not providing a
product or -service that requires profes"sional liability
insurance.
8. Identify the risks to the Ciiy if this request for waiver or modifications.granted =_ none
Department Head Signature
RON 4.MAN
(This section to he completed hythe Risk Manager)
Recommendation:
Approve Deny Risk Manager's Signature/Date
(This section to he completed hp the City Attorne})
Recommendation:
Approve Deny City Attorney's Signature/Date
Settlement Committee approUsic,!e required for this waiver. If Settlement Committee approval is required,
submit form to City Attorney' on the agenda. Recommendation: Approve ✓ Deny
City Council appr val [is] [is not] required for this waiver. If City Council approval is required, attach this form to the
RCA after consider y the Settlement Committee. This insurance waiver [is] [is not] on City Council agenda.
jmpNresoutionlnsreq/9/11/97
7
ATTACHMENT # 2
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A Corporate partnership of municipal facilities--primarily naming
rights packages for sports venues--is a direct result of the
OR, convergence of entertainment facilities and corporate America.
As the economics of building these facilities become increasingly
more complex and demanding, facility operators must evaluate' t p
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every potential revenue-generating opportunity. Consequently,
L
municipalities are targeting the large marketing budgets of
corporate America.
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In turn, -corporations are enticed by the glamour and
uniqueness of these new methods to reach their target audiences
and provide millions of repeat impressions per year. Thus,
corporate partnerships have evolved into a valuable commodity
for cities.
Although the Pier Plaza is not solely a sporting facility, the
marketing benefits available are comparable and are a logical
extension of .municipal experiences with arenas and stadiums.
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The value of a corporate marketing ®r a
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municipality is difficult to measure, and that is why the
city needs an expert.
JkTo corporate partners, the potential for increased
exposure and impressions within a community or
r
region is of great value. A company that has its name
connected with a recognizable facility that has large
audiences, gains an incredible amount of publicity and
credibility with the public.
Corporate sponsorship partnering enhances the
sponsor's image as a "major player" in their respective
product categories.
M* g
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Companies buying napping rights have tended to be
airline beverage, or financial services industries.
•
, The most likelycandidates for future municipal/
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...........
3it � c® orate mark deals are companies in the
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t41Y .{4 communications, automotive and soft drink
r r = industries. Theyma try to match these forerunning Y
competitors such as MCI, Pacific Bell, PepsiCo, and
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General Motors, who already p have experience with
naming rights deals.
PROJECT' COSTS
!1, w, Presentation and Sales Materials
r 'N Not to exceed $5, 000
General and administrative expenses
f
^i t '>' 1',
Not to exceed $5, 000
Presentations : Travel and expenses
Not to exceed $5, 000
°M All costs are negotiable and considered a draw from 5% agent
commissions earned.
All travel and expenses to be pre-approved by city.
Why
Schufte Enterprises
Sports
x nsive experience in Sponsorship Sales
E top
& Marketing
F Local enterprise with national experience
in corporate s onsorshl ro acts
..........
r Track Record
P oven
Currently working with '.'Blue Chip"
corporations who have the ability to fund
this
project
SUMMAR-.,.-
The Pier Plaza project is an unparalleled opportunity for
a F both the City of Huntington Beach and corporate
ri America.
Schulte Sports Enterprises believes that the Pier Plaza
will be a cornerstone for continued revitalization of our
downtown area and expansion of our sales tax base.
.... .......:.:..
This is an exciting and innovative approach to providing
enhanced revenues for maintenance and operation of the
Pier Plaza for the millions of annual Huntington Beach
visitors to enjoy.
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Schulte Sports Enterprises
Date: 3/6/98
To: Ron Hagen From: Don Schulte
City of Huntington Beach Schulte Sports Enterprises
Phone: 714-536-5291 Phone: 714-374-3330
Fax: 714-374-1708 Fax: 714-374-3332
Pages: 2
Subject: Hunt Sports Group
Ron,
Please find attached a letter from Tim Connolly, the president of the Hunt Sports
Group. Tim has expressed his interest in support with our project, and would be
available for a conference call if necessary.
Although Tim alludes to their properties and interests, you should be made aware of the
fact that the Hunt Sports organization is one of the most powerful sports management
and development groups in the world. A short list of their properties would include:
Kansas City Chiefs (NFL)
Chicago Bulls (NBA)
Kansas City Wizards (Major League Soccer) j
Columbus Crew (Major League Soccer)
Arrowhead Stadium (Kansas City)
United Center (Chicago)
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03/06/98 FRI 05:36 FAX 8169317337 HUNT SPORTS GROUP 10002
HUNT
SPORTS GROUP
March 6, 1998
'Mr. Ron Hagen
City of Huntington Beach
2000 Main Street
P.O.Box 190
Huntington Beach, CA 92648
Dear Mr. Hagen:
Don Schulte has been speaking highly of your efforts to secure sponsorships and naming
rights for your Huntington Beach Pier Plaza project. I would like to congratulate you on.
your choice of sales agents. Don's negotiation skills have been extraordinarily beneficial
to the Hunt Sports Group In dealing with high profile projects such as Pacific Bell Ballpark
(SF Giants)and other facility based offerings. We look forward to again working with Don
and pledge our support'in any capacity.
Hunt Sports Group has had extensive experience working with municipalities, naming
rights and sponsorships due to ownership positions with professional sports teams in many
different markets. We deal with many of the issues that you will soon face on a daily basis.
I would like to make clear that Hunt Sports Group will provide Schulte Sports Enterprises
with all of our resources and support necessaryto secure partnerships,and to manage any
relationships the city of Huntington Beach and SSE develop for each of your projects.
Please feel free to call me directly, (816/931-7722), or I would be happy to participate in
a conference call with you and Don.
Sincerely,
d POR S GROUP
I
imothy M. Con olly
esi dent
D A L L A S K AN S AS C IT Y
One Main Flaza 4435 Mafn St. Svik 920 Kanaae City,Mi&%uarl 64111
Telephone 816 9317722 Fax$16 9317337
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AGENTS CONTRA CT FOR NAMING
RIGHTS/CORPORA TE
..............................
.: ........ ...............:.....;.
• APPROVE CONTRACT WITH SCHULTE SP RISES
• APPROVE A$30,000 ADVANCE AGAINST FUTURE CON MISSIONS
• DIRECT SSE&STAFF TO DEVELOP A BENEFITS PACKAGE FOR
COUNCIL APPROVAL
• WAIVE THE PROFESSIONAL.LIABILITY INSURANCE
AGENTS CONTRACT FOR NAMING
RIGHTS/ TE
i
• WHAT IS THE OBJECTIV
— To generate $5 - $7.5 Million Dollars in
revenue for the Pier Plaza Fund over a 10 year
period.
i
— To find the Right corporate partner for
Huntington Beach!
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AGENTS CONTRACT FOR NAMING
RIGHTS/ ,RPORA TE
SCOPE OF WORK .
PHASE I
Develop list of corporate prospects
PHASE 2
Develop benefits package for Council approval
PHASE 3
Develop marketing and sales plan
PHASE 4
Corporate presentations
PHASES
Develop corporate partnership agreement
PHASE 6
Corporate partnership agreement approval by City Council
AGENTS CONTRACT FOR NAMING
RIGHTS/ ORA TE
},
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WHY SCHULTE SPORTS SES?
• Extensive experience in sponsorship sales
and marketing
• Based in Huntington Beach
• Nationwide network of major corporation
contacts
• Proven tract record
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AGENTS CONTRACT FOR NAMING
RIGHTS/ ORATE
............ ............................................................. ::: :::
<. ,
SUMMARY
• Unique opportunity for both the City and
corporate America!
• Opportunity to protect City's investment in
Pier Plaza!
• Now is the window of opportunity to obtain
the best corporate agreement!
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;, CITY OF HUNTINGTON BEACH
,O _
' 2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
DATE: �/J'o/9
TO: Pi y 0 5 ATTENTION: `ti[JC.VV
vfi(hJ & Rin/ CS�'YeG DEPARTMENT: /A CSi�Ch
RE ARDING:��QDGIiQQiD!-11
City,State, i
See Attached Action Agenda Item Date of Approval
Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item.
Remarks:
Connie Brockway
City Clerk
Attachments: Action Agenda Page Agreement Bonds Insurance
RCA Deed Other
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CC: #;in4w d2e.a�e�v es -Z ef6 e4,0,4
\N,�rr� A sy� � De Pent RCA ! Agreement Insurance 72/
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N�c Department RCA Agreemept Insurance Other
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Name Department RCA Agreement. Insurance Other
Name Department RCA Agreement Insurance Other
Risk Management Dept. Insurance
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Received by Name- Company Name - Date
G:Followup/coverltr
(Telephone:714-536-5227)
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(15) 04/06/98 - Council%Agency Agenda - Page 15
F-2. (Redevelopment Agency) Blocks 104/105 Owner Participant Selection -(Main
Street/6th Street/5th Street/Walnut Avenue) -Approval Of Development Strategy -
Authorize Staff To Prepare Exclusive Negotiating Agreement With CIM/Federal
Realty For Agency Approval (410.20)
Communication from the Employment Development Director and Community
Development Director regarding the need for a development strategy to be in place for
Blocks 104 and 105, and informing the Agency members that the seven Owner-
Participant proposals received by the Redevelopment Agency have been evaluated.
Approval of a development strategy with the selection of an Owner-Participant will allow
for redevelopment of the site.
Recommended Action: Motion to:
1. Approve a Development Strategy for Blocks 104 and 105 that seeks joint
development of the two blocks and utilize a traditional redevelopment approach
including property acquisition of the Main Street properties and new construction
with an Owner-Participant developer;
and
2. Direct Staff to prepare a 120 Day Exclusive Negotiating Agreement (ENA) with
CIM/Federal Realty and return to the Redevelopment Agency for approval of the
Exclusive Negotiating Agreement at the earliest possible date.
[Approved 5-1 (Julien: Absent, Garofalo: No)]
F-3. (City Council) Approve Agent's Contract For Naming Rights/Corporate Partnering
Program - Pier Plaza Project & Approve Professional Liability Waiver (600.10)
Communication from the Community Services Director, Acting Public Works Director
and the Administrative Services Director regarding the need for the city to hire expert
representation to develop and negotiate a naming rights/corporate partnering program
for the Pier Plaza project.
Recommended Action: Motion to:
1. Approve the attached contract with Schulte Sports Enterprises (SSE) for naming
rights/corporate partnering, and authorize the Mayor and City Clerk to execute -
"Agreement Between The City Of Huntington Beach And Schulte Sports
Enterprises For Appointment Of An Agent For The Negotiation And Procurement
Of A Naming Rights Agreement To Pier Plaza."
and
2. Approve an amendment to the Fiscal Year 97/98 Pier Plaza Fund budget to
allocate $30,000 of contingency into the new Pier Plaza Fund for project startup
costs;
and j
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3. Authorize the expenditure of$30,000 from the Pier Plaza Project Contingency
Fund for startup costs for print materials/brochures and agent's draw to be
reimbursed to the Pier Plaza Fund from the commissions paid to Schulte Sports l
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mmu nrl,(ry, 1)nqge !*ac
While historically there has been some initial
resentment from sentimental fans who will never-
aka a game in see at Boston Garden or Candlestick
f t a naming rights is now so firmlyPark, the idea of a g �
entrenched that most people understand the
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r A:{ economic reality that municipalities face and
} consider corporate involvement to be an acceptable
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business and economic practice necessity.
This is especially true when naming rights' revenues
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defrays costs that taxpayers would otherwise be
required to fund.
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The standard 20 plus year agreements that were
prevalent a few years ago have been replaced with
k shorter term agreements. 3 Com Park in San Francisco
is a 4 year contract, and Arrowhead Pond in Anaheim
� § is written for 5 years. Most marketing experts agree
a"� ' ; that although there will always be long-term namin
`- 1 g y g g
tfCt r rights packages, the increase in shorter term contracts
will continue as market demand grows and more
: Y this new marketing medium.
. corporations test w g
As the city's agent we will analyze what term is best to
provide the public with some continuity of recognition,
in addition to insuring the corporate partner makes a
firm commitment to Huntington Beach.
TOP 1.0 : {f E . NAMING DEALS
SPONSOR VENUE CITY MAJOR TERM TOTAL AVG.
LEAGUE CONTRACT ANNUAL
TEAMS PAYMENT
MCI MCI Center Washington,DC NBA NHL 10 $44 000 000. $4 400 000
+rR
Continental Continental Arena East Rutherford,NJ NHL,NBA 12 29,000,000 2,416,667
Airlines
Bank One Bank One Ballpark Phoenix,AZ MLB 30 66,000,000 2,200,000
Pacific Bell Pacific Bell Park San Francisco,CA MLB 24 50,000,000 2,083,333
Miller Brewing Miller Park Milwaukee,WI MLB 20 41,200,000 2,060,000
Fleet Financial Fleet Center Boston,MA NHL,NBA 15 30,000,000 2,000,000
Group
United Airlines United Center Chicago,II, NHL,NBA 20 36,000,000 1,800,000
PepsiCo Pepsi Center Denver,CO NHL,NBA 20 35,000,000 1,750,000
Arrowhead Water Arrowhead Pond at Anaheim,CA NHL 5 7,500,000 1,500,000
Corp. Anaheim
Molson Brewing Co. Molson Centre Montreal,Canada NHL 20 30,000,000 1,500,000
Huntington Beach Local Issues
A The City will have to find Compatible
Partners
* Synergistic Corporate Signage/Marketing
Applications must be acceptable to the City
f,` a , The City will have to provide Long Term
...............
fi
3{t�` CommunityCommitments to receive Long Term
x Corporate Revenues
P Successful Examples of Corporate PartnershipsON
for Attraction or Event venues
Disney Attractions
Sea World
PGA Tour
P�I4 OFILE
Schulte Sports Enterprises is an organization
designed to address corporate Americas involve-
ment in sponsorship naming rights, and overall
affiliations with external marketing pp g opportunities. SSE brings a
hl H� C f�'M1 C� � fresh approach to corporate sports and entertainment.
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The SSE group bases all its service offerings on extensive
experience in media, sponsorship 9 advertising, sales and other
methods of imp rovini! 9p the rewards to facilities sponsors, attendees
events, and. sports personalities.
SSE has helped clients raise funds and otherwise finance their
businesses - helped corporations to set up and run sports and
entertainment divisions - helped all to plan their future actions and
manage the execution of those plans.
'W'Schulte Spor ts,
Ent, er rises
Huntington each Houston New York
Schulte Sports
Enterprises
K
Don Schulte Pete Schulte Ray Schulte
President CFO V.P. of Operations
s Huntington Beach, CA Houston, TX New York, NY
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Judy Anderson Joe De Marco Tawnia Aswell
,
V.P. Corporate Services Director of Technology Sales Representative
' �.5#t6i1?td. �.t&A .�'Ci cf'1"btY.,65a.7d�`.��' '�s - %Ye ii@9�'pi�S'A1T$dS13uFsY77FS" ? _ {1,1AF4 ., ��54v`�.i7Ntt'ihdk�S5�k�3N°u.'N7�1'CiR�.478�Fkr'
Brian Webster v
Account Executive
SSE
ROJECTS
Ak 1998 Superbowl San Diego
Executive Events Magazine
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San Francisco Giants - Pacific Bell Ballpark
�a Hunt Sports Group - Arrowhead Stadium, Kansas City
H yundai Korea Classic Golf Tournament - Seoul Korea
hk"ti(
ff World Cup 94 - Los Angeles Organizing Committee
a... 1998 USGA Senior Open - Riviera CC
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Ryder Cu 97 - Eagle International
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E Las Vegas Domed Stadium
1996 Olympic Games - Atlanta GA
HUNTINGTON REACH PIER. PLAM
SSEs� OBJECTIVE
a
To enerate - Milli n Dollars 7.5 0
from corporate marketingrevenue
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the Pier Plaza Fund over a - )roj* ecte
3 ,*+tuxes„,
10- 12 year period,
STRATEGIES
Develop a Pier Partnership Package that allows
a corporation to effectively maximize corporate
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.................
t w involvement
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Develop rights/benefits package that serves as
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valuable tool for corporate marketing n g plans
Be selective when approving commercial)
'`r,.rs pp g
``k`• ''ipi�Yi}' Zrvtj
appropriate Pier Partners suited to Huntington------------
* Beach Pier Plaza image
f
Create secondary partnership packages for
additional revenue opportunities
Rignts &, ". .,en-efits, Options
Sample of Possible Ben efits,*
A Product or Service exclusivity A Include on security officials'
Primary entrance,display uniforms in and around Pier Plaza
Secondary entrance display Brick or the sponsor signage at
City reference on all printed entrance locations
........... correspondence and advertising A Conference room access for
...........
cor orate meeting
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Participation in all events at the
...... ....
facility including broadcast presentations
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................. ........... Exclusive access to Pavilion A Block of preferred reserved seats at
Pavilion and at all Pier events
.............
(restricted)
Secondary signage (Billboard, Trash A Kiosks of approved square footage
for franchise display or retail of
vestibules, etc.
..........
AL Include in all press articles and primary product
releases A Flag and banner opportunities
where applicable
JL VIP Parking Passes
Government vehicles at Plaza A First Right of Refusal on future
AL City entrance signs at city limits partnership projects
M,1 L A-R_ "- ,Kr ,E,T 1,-N,-G- P. ,--L.A, -N!
A Phase One
-City Council endorsement
A Situation Analysis
Key Issues -De'
M, Competitive Analysis -Im
Research
Phase Two
-Develop Comprehensive Objectives
?m -Prepare Positioning Strategy
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a,_ 3 -Develop Theme Rationale
k -Define Target Audience and Message Strategy
k -Develop Pier Partnership Package Development
Phase Three
-Prepare Budget
-Develop Methods of Evaluation
-Provide Timetable
-Provide Ongoing Management
PAR R,S
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