Woodbine Park - Sponsorship of Bandshell (Ward 26 - East Toronto)

The Economic Development and Parks Committee recommends that:

(1)the report (May 18, 1999) from the Commissioner of Economic Development, Culture and Tourism be adopted, subject to deleting the recommendation embodied therein and inserting in lieu thereof the following:

"The Commissioner of Economic Development, Culture and Tourism be directed to commence the installation of the necessary in-ground services for a bandshell in Woodbine Park, the funding for same to be from the Parks' Capital Budget envelope"; and

(2)the report (June 4, 1999) from the Commissioner of Economic Development, Culture and Tourism be received for information.

The Economic Development and Parks Committee reports, for the information of Council, having requested the Commissioner of Economic Development, Culture and Tourism to:

(a)prepare a Request for Proposal (RFP) for sponsorship of the bandshell in Woodbine Park the said RFP to have a clear understanding of the expectations relating to programming, etc., and report thereon to the Economic Development and Parks Committee for its meeting of September 11, 1999; and

(b)provide a verbal update as to the progress of the said RFP to the July 12, 1999, meeting of the Economic Development and Parks Committee.

The Economic Development and Parks Committee submits the following report (May 18, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

To seek authorization for City staff to enter into negotiations with Molson Breweries and report directly to City Council at its meeting of June 9, 10 and 11, 1999, respecting the detailed terms and conditions of their sponsorship proposal for a bandshell at the new Woodbine Park.

Financial Implications:

There is a potential $630,000.00 contribution towards the construction of the bandshell which is currently planned but not budgeted for the new Woodbine Park.

Recommendation:

It is recommended that the Economic Development Committee authorize the appropriate City officials to enter into negotiations with Molson Breweries, and report directly to City Council at its meeting of June 9, 10 and 11, 1999, on the specific terms and conditions of their sponsorship proposal for construction of a bandshell at the new Woodbine Park.

Background:

The construction of Woodbine Park will commence in June 1999 with the official opening planned for July 1, 2000. Approved capital budget funds for 1998 - 2000 will be applied to the construction of the base park. The park design contemplates a bandshell and field area for community use ranging from field sports, outdoor classrooms and special festivals and events. The bandshell is not included in the base park construction and requires additional funding of at least $600,000.00. As part of the tender process for the park construction, competitive bids were requested for the construction of the bandshell as a provisional item should additional funds be made available in the future.

On December 16, 1998, staff received a letter of interest from Molson Breweries and an accompanying cheque for sponsorship interest for the bandshell feature. Subsequently, on April 19, 1999, Labatt Breweries advised staff of their sponsorship interest in Woodbine Park with an offer, a cheque and a request to discuss steps for moving ahead. In order to ensure a fair evaluation of the two proposals, both offers and cheque deposits were returned on April 30, 1999. At that time, staff notified both Molson Breweries and Labatt Breweries that we were prepared to consider and make a decision on an offer, for recommendation to the Economic Development Committee, provided it was received by a prescribed deadline, and that it was generally consistent with the park design and budget and the intent of the City's interim corporate sponsorship guideline, to the staff's satisfaction.

Comments:

On May 13, 1999, staff received two corporate sponsorship proposals for the bandshell at the new Woodbine Park; one from Molson Breweries and one from Labatt Breweries. Based on the evaluation completed by staff, Molson Breweries sponsorship offer of $630,000.00 plus provision of bandshell signage, for a term of 10 years with an option to renew for another five years, payable upon agreement with the City, best meets the City's selection criteria and is considered the superior offer.

A corporate sponsorship program is under development by the Chief Financial Officer and Treasurer, as outlined in the report dated February 18, 1999, that was received by Council March 2, 1999. The intention of the program is stated as follows:

"The corporate sponsorship program is intended to optimize the City's sponsorship benefits, ensure competitive access to City contracts and promote the City's public image. A six month development study will be followed by reports to Council proposing a corporate policy and seeking authority to award a sales/marketing/program management contract. Corporate sponsorship agreements may begin to impact the operating budget in the year 2000 if the project proceeds on schedule. In the meantime an interim corporate guideline has been established to direct sponsorship activities in 1999."

The General Principles of the Interim Corporate Sponsorship Guidelines provide, among other things, that:

"(1)The City of Toronto accepts the principle that, under the general conditions outlined in the guideline, external organizations may sponsor (through cash, products, services or other contributions) portions of, or entire, approved City programs, events or activities in return for forms of recognition or acknowledgment agreed upon with the City. Also, under the general conditions of this guideline, City staff may solicit such sponsorship of City projects by external organizations.

(2)Sponsorship arrangements must be in accordance with City policies.

(3) All sponsorship arrangements and agreements are subject to review and approval by the appropriate City authorities and must conform with this interim guideline....."

This report seeks explicit authorization from both the Economic Development Committee and Council to act on Molson's sponsorship, as set out in their letter dated May 13, 1999. Molson's sponsorship offer is generally consistent with the intent of the interim guideline, but not with every provision, and allows the City to realize a planned capital facility by the July 2000 opening of the new Woodbine Park. The detailed reasons for this recommendation include the following:

(1) the offer is $630,000.00 cash, payable upon agreement by the City, for a capital facility that is part of the master plan for the new Woodbine Park, but is not budgeted for in the approved Capital budget program for the period 1998-2002;

(2) the construction of the new park will commence in June 1999 and is scheduled for completion and official opening July 1, 2000. Acceptance of the Molson offer permits the bandshell to be included in the same construction contract and schedule in conjunction with the base park construction, if Council provides the necessary authorization as set out in the recommendation of this report;

(3)the bandshell is budgeted at approximately $600,000.00 with a life expectancy of greater than 10 years. The term of 10 years, with an option to renew for a further five years, and the amount of the cash contribution would be consistent with the cost and duration of the facility. While the Interim Guideline provides a term of one year for sponsorship arrangements that proceed in the interim, it is not feasible, given the cost and duration of the bandshell, to impose a one year limit on the term of the Molson sponsorship in this instance;

(4)consultation with appropriate authorities has taken place and will occur respecting the form and content of the necessary legal agreements, as provided in the Guideline, as well as information sharing and record maintenance;

(5)rather than proceeding under the delegation of authority set out in the Interim Guideline, explicit authorization is being sought from Committee and Council for the Molson sponsorship offer at this time, as the offer exceeds $500,000.00 and the facts pertaining to the bandshell construction and the sponsorship offer do not strictly conform to the Interim Guideline; and

(6)Woodbine Park is part of the approved Capital Program for 1998-2002, and all costs related to the park and bandshell are allocated to the program budget, consistent with the guideline.

Conclusion:

The Molson Sponsorship offer permits the Woodbine Park bandshell to be constructed in conjunction with the base park for completion by July 2000 promoting the City's public image. It is the superior offer of two proposals received by May 13, 1999, and evaluated according to the selection criteria set out by staff.

Appropriate City staff should now be authorized to enter into negotiations with Molson Breweries on the specific terms and conditions of their sponsorship proposal and be requested to report onthedetails of the sponsorship agreement arrangements to City Council at its meeting of June9,10and 11, 1999.

Contact Name:

Ms. Susan Richardson, Parks and Recreation Division, 392-1941.

The Economic Development and Parks Committee also submits the following report (June 4, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

This report provides further information as requested the Economic Development Committee meeting of May 21, 1999.

Financial Implications:

There are no financial implications.

Recommendations:

It is recommended that:

(1)this report be receive as information; and

(2)the report submitted by the Commissioner of Economic Development, Culture and Tourism, dated May 18, 1999, be approved.

Comments:

At its meeting of May 21, 1999, the Economic Development Committee deferred consideration of the report (May 18, 1999) on Sponsorship of a Bandshell at the new Woodbine Park and requested that a further report be submitted to the June 21, 1999 meeting of the Economic Development and Parks Committee on the application of interim sponsorship guidelines for this project and the criteria for corporate sponsorship, particularly for sponsorship opportunities over $500,000.00.

The report on the Corporate Sponsorship Program dated February 18, 1999, the purpose of which was to update Council on efforts to develop a corporate sponsorship program was received by Council at its meeting of March 2, 1999. The Interim Corporate Sponsorship Guideline dated February 18, 1999, was attached for information. The following section refers to the guideline and how it applies in this instance. The guideline consists of seven sections labelled A to G.

(A)Background:

The purpose of the guideline is to provide interim sponsorship directions to allow program areas to pursue sponsorship opportunities that do not extend past December 31, 1999, unless the Interdepartmental Task Force approves otherwise.

Comment: The Molson sponsorship offer extends for 10 years with an option to renew for another five years.

(B)Application:

The interim guideline applies to all business arrangements with the City of Toronto or its Departments where external organizations contribute to City programs, events or activities in return for recognition or other promotional consideration during the program, event or activity. The guideline does not apply to gifts to the City, grants from other levels of government, City sponsorship of external projects, arrangements contributing to program events or activities undertaken by the City's agencies, boards or commissions.

Comment: The Molson sponsorship offer meets the above criteria.

(C)Definitions:

(1)Sponsorship:

A mutually beneficial business arrangement between the City of Toronto and one or more external companies, organizations or enterprises where the external organization contributes funds, goods or services to a City program, event or activity in return for recognition, acknowledgment or other promotional considerations connected to the project. Sponsorship arrangements may involve the dedication or exchange of goods, services, cash, or human resources by both parties toward the completion of the project which is usually managed by City staff. Sponsorship projects must be consistent with approved Departmental mandates and objectives.

Comment: The Molson Sponsorship offer would provide $630,000.00 cash to a City capital project, i.e., Woodbine Park, in return for recognition of Molson's by naming the facility the "Molson Stage" and for "preferred brewer" status for all events and occasions held at the venue where alcoholic beverages are being served - with the understanding that competitive brewers may in fact opt to sponsor events at the site that Molson would not be sponsoring. The sponsorship project, the Woodbine Park Bandshell, is part of an approved departmental Master Plan Concept for Woodbine Park.

(2)Sponsor Contribution:

The items, goods, services or resources an external organization is contributing to a City program, event or activity under a sponsorship arrangement or agreement.

Comment: The Molson Sponsorship Contribution is $630,000.00 cash upon completion of a sponsorship agreement with the City.

(3)Contribution Value:

The exact or estimated cash value of an individual sponsor's contribution to a City project. If not cash, the value should be estimated as a current market value, i.e., what the City would otherwise be willing to pay for the purchase of the item or service.

Comment: The contribution value of the Molson Sponsorship offer is exactly $630,000.00 due and payable upon the agreement of the City.

(4)Project:

An approved City program, event or activity for which external sponsorship is being sought.

Comment: The Woodbine Park bandshell is part of a departmentally approved Master Plan Concept for Woodbine Park for which City capital funds are not currently available and for which staff are seeking external sponsorship.

(5)Gift:

A contribution to the City for which there is no reciprocal benefit expected or required from the City.

This guideline does not apply to gifts which are unsolicited or, if solicited, are not linked with specific City program, event or activity. Even if no reciprocal benefit is requested, this guideline does apply to gifts which are solicited for a specific program, event or activity.

Comment: The Molson Sponsorship offer is not a gift as there is a reciprocal benefit required and expected from the City.

(D)General Principles:

There are eleven general principles set out in the interim guideline.

(1)The City of Toronto accepts the principle that, under the general conditions outlined in the guideline, external organizations may sponsor (through cash, products, services or other contributions) portions of, or entire, approved City programs, events or activities in return for forms of recognition or acknowledgement agreed upon with the City. Also, under the general conditions of this guideline, City staff may solicit such sponsorship of City projects by external organizations.

Comment: In this case, City staff solicited sponsorship proposals from both Molson and Labatt Breweries to achieve a bandshell at the new Woodbine Park without the requirement of additional capital funds.

(2)Sponsorship arrangements must be in accordance with City policies.

Comment: The Molson Sponsorship offer is in accordance with City policies, i.e., explicit City Council authorization is being sought as the financial arrangement exceeds $500,000.00. The project is part of the approved Master Plan concept developed by Parks and Recreation staff in consultation with the community. The project will be managed by Departmental staff.

(3)All sponsorship arrangements and agreements are subject to review and approval by the appropriate City authorities and must conform with the interim guideline.

Comment: All details respecting the Molson Sponsorship offer have been provided to and reviewed by appropriate City authorities. The offer does not conform to the interim guideline because the term extends past December 31, 1999.

(4)Details of sponsorship arrangements are negotiable and may vary from project to project. While public acknowledgement and publicity for the sponsor may be part of a sponsorship agreement, sponsor benefits are not limited to these opportunities. Within the general conditions of the guideline, a wide range of benefits for both parties in a sponsorship agreement may be negotiated.

Comment: Details of Molson's offer meet all criteria established by Parks and Recreation staff for this project. The benefits are limited to those described above in the Definition section.

(5)Sponsorship arrangements with the City of Toronto are governed by the following five key principles:

(i)concept approval for each sponsorship project by the appropriate level of authority prior to soliciting of sponsorship contributions;

Comment: The Woodbine Park bandshell was part of a departmentally approved Master Plan Concept dated April, 1998, prior to any sponsorship contributions being solicited.

(ii)open and competitive access, consistent with current policies, to sponsorship opportunities with the City; each department must ensure that appropriate access to sponsorship opportunities to all suitable and potentially interested external organizations is maintained; soliciting of sponsorship opportunities shall be done in accordance with City policies;

Comment: The Department provided equal access to both Molson and Labatt Breweries.

(iii)approval of actual sponsorship agreements and contracts by the appropriate City authorities;

Comment: Under the recommendations of the May 18, 1999 report, explicit Council authority is being sought for the terms and conditions of the actual sponsorship agreement and contract with Molson Breweries.

(iv)sharing of information between City departments regarding sponsorship, purchasing and advertising plans through the Interdepartmental Task Force. Departments are responsible for the maintenance of complete records of sponsorship transactions;

Comment: Information respecting this sponsorship opportunity was shared with Senior Management Committee and with the City Solicitor, the Director of Purchasing and Supply and Senior Management of the Parks and Recreation Division.

(v)a professional and co-ordinated approach to sponsorship arrangements.

Comment: General conformity with the interim sponsorship guidelines hasbeen the Department's objective in order to ensure a professional and co-ordinated approach within the Corporation.

(6)Sponsorship arrangements must provide a means for the City to obtain resources which can be used to maintain, enhance, promote, or market a City program, event or activity, and should complement other City advertising, public relations and promotional activities.

Comment: The Molson Sponsorship offer provides the funding necessary to build the new bandshell.

(7)Programs, events or activities for which sponsorship is sought must be part of a department's approved service mandate or annual plan, or be mandated by Council, either through the budget process or by motion of Council. All costs to the City must be allocated to a program budget.

Comment: City Council authorization is being sought to accept the Molson Sponsorship offer and apply it to the construction of a bandshell for the new Woodbine Park.

(8)A sponsorship package or description that outlines the forms of sponsorship being sought and the benefits available to sponsors, should be presented to potential sponsors whenever possible. Staff from Purchasing and Materials Management Division may be consulted in the preparation of sponsorship packages.

Comment: This provision was complied with by Staff. A complete description of the sponsorship potential including detailed terms and conditions was provided to both Molson and Labatt Breweries, a copy of which is attached as Appendix 1.

(9)The City must be sensitive to the appropriateness of certain sponsors for involvement in specific programs or events, and the potential impact on the City's image.

Comment: The appropriateness of brewery sponsorship of Parks and Recreation programs, i.e., the upgrading of children's playgrounds to incorporate new splash pads, was previously approved in this term of Council.

(10)The City will not provide income tax receipts for sponsorship contributions.

Comment: No income tax receipt is being requested by Molson Breweries.

(11)No official correspondence, Council materials and reports, or official media press releases shall carry commercial corporate recognition of any sort.

Comment: Molson Breweries is aware of this position and no commercial corporate recognition is being sought in their proposal apart from the naming of the bandshell as the "Molson Stage".

(E)Responsibilities:

The five provisions in this category are complied with by the Molson Sponsorship offer and, therefore, the details of the provisions are not set out.

(F)Approval and Sourcing Authorities:

The provisions respecting Single Sourcing and Delegation of Authority are being complied with by the procedure followed by Staff. Based on all available information, staff determined that the suitable and potentially interested external organizations for sponsorship of the Woodbine Park bandshell were Molson and Labatt Breweries.

(G)Agreements:

Staff will be working the City Solicitor in the development of suitable agreement, having regard for the provisions respecting the interim guideline.

Contact Name:

Ms. Susan Richardson, 392-1941.

The Economic Development and Parks Committee also submits the following communication (May 21, 1999) from Mr. Mike Rapino, Senior Vice President, Core Audience:

Core Audience is a leading concert promoter in Canada producing over 200 shows per year.

We understand that the City is considering a sponsorship agreement for the Bandshell in the East end of Toronto. We would be very interested in participating in a tendering process with respect to this Bandshell project.

We are excited to be involved given our investment in the Toronto entertainment industry.

The Economic Development and Parks Committee also submits the following communication (May 19, 1999) from A. F. LaSorda, Vice Chairman & Chief Executive Officer North America, Mosaic Group Inc.:

Mosaic Group Inc. is a sponsorship and event marketing company, based in Toronto, that represents dozens of Canada's largest corporations in sponsorship negotiations.

It has come to our attention that the City of Toronto is considering entering into a multi-year sponsorship deal for a bandshell/park in the City's east end. We understand that this is a significant departure for the City and an exciting opportunity to involve the private sector in maintaining municipal recreation services.

We support this kind of innovative partnership, but we are concerned that the proposals that you are considering have come about through limited private discussions, that no public tendering process has been followed and that our company has not had an opportunity to submit a proposal on behalf of our clients.

In the interest of increasing taxpayer value, enhancing the benefits for users and ensuring a fair and open process, I would ask that you and your Committee endorse a proper tendering process - one that we would be excited to participate in.

________

The Economic Development and Parks Committee also had before it the following communications, and copies thereof are on file in the office of the City Clerk:

(a)(May 27, 1999) from the City Clerk addressed to the Commissioner of Economic Development, Culture and Tourism;

(b)(May 13, 1999) from Mr. Dave Perkins, President, Ontario and Atlantic Region, Molson Breweries, Toronto, Ontario;

(c)(May 12, 1999) from Mr. James Villeneuve, Director, Regulatory Affairs, Labatt Breweries of Canada, Toronto, Ontario;

(d)(May 5, 1999) from Mr. Joe Halstead, Commissioner of Economic Development, Culture and Tourism addressed to Mr. Dave Perkins, President, Ontario and Atlantic Region, Molson Breweries;

(e)(May 5, 1999) from Mr. Joe Halstead, Commissioner of Economic Development, Culture and Tourism addressed to Mr. James Villeneuve, Director, Regulatory Affairs, Labatt Breweries of Canada;

(f)(April 30, 1999) from Mr. Joe Halstead, Commissioner of Economic Development, Culture and Tourism addressed to Mr. Dave Perkins, President, Ontario and Atlantic Region, Molson Breweries;

(g)(June 17, 1999) from Mr. J. Bruce Elliot, President, Labatt Breweries Ontario, Toronto, Ontario; and

(h)(June 17, 1999) from Councillor Sandra Bussin, East Toronto, enclosing three calendars of Special Events and a map of Woodbine Park.

________

The following Members of Council appeared before the Economic Development and Parks Committee in connection with the foregoing matter:

-Councillor Sandra Bussin, East Toronto; and

-Councillor Tom Jakobek, East Toronto.

The following persons also appeared before the Economic Development and Parks Committee in connection with the foregoing matter:

-Mr. Davis, Urban Intelligence, representating Labatt Breweries Ontario, Toronto, Ontario;

-Mr. Gordon Baker, Toronto, Ontario; and

-Mr. Fergie Devins, Director of Corporate Affairs, Molson's Breweries, Toronto, Ontario.