May 18, 1999

To:Economic Development Committee

From:Joe Halstead, Commissioner, Economic Development, Culture & Tourism

Subject:Woodbine Park - Sponsorship of Bandshell, Ward 26 - East Toronto

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, 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 contribution towards the construction of the bandshell which is currently planned but not budgeted for the new Woodbine Park.

Recommendations:

It is recommended that:

(1)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, 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. 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. Copies of these letters are attached to this report. Based on the evaluation completed by staff, Molson Breweries sponsorship offer of $630,000 plus provision of bandshell signage, for a term of 10 years with an option to renew for another 5 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 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 with a life expectancy of greater than 10 years. The term of 10 years, with an option to renew for a further 5 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 and the facts pertaining to the bandshell construction and the sponsorship offer do not strictly conform to the Interim Guidelines; 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 on the details of the sponsorship agreement arrangements to City Council at its meeting of June 9, 10, 11, 1999.

Contact Name:

Susan Richardson

Parks and Recreation Division

392-1941