June 4, 1999

To:Economic Development and Parks Committee

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

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

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.

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. In 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 ten (10) years with an option to renew for another five (5) 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 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 cash to a City capital project, ie.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 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, ie. 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 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 gift which is 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, ie. explicit City Council authorization is being sought as the financial arrangement exceeds $500,000. 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 has been 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, ie. 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:

Susan Richardson

392-1941

Joe Halstead

Commissioner Economic Development, Culture and Tourism