7/16/2024 Item 7
City Council
Meeting
Item #7 Action on an Agreement
with Oak View Group Global
Partnerships, LLC for Naming
Rights and Sponsorships for the
Santa Clara Convention Center
1852
and Related Budget Amendment
THE MISSION CIT
July 16, 2024 RTC 24-547
1 City of
Santa Clara
The Center of What's Possible
AGENDA
• Background
• Procurement and Proposal Evaluation Process
• Recommended Contract Terms
• Proposed Approval Authorities
• Proposed Santa Clara Convention Center (SCCC) Naming Rights and Sponsorship Guidelines
• Staff Recommendation
POST MEETING MATERIAL
1 7/16/2024 Item 7
City of
Santa Clara
The Center of What's Possible
Background
3 City of
Santa Clara
The Center of What's Possible
Naming Rights & Sponsorships
Selling naming rights and sponsorships provides financial support, boosts appeal, fosters partnerships, and benefits the community:
• Financial Support: Generates significant income for covering costs and funding capital improvements.
• Strategic Partnerships: Fosters long-term business collaborations and enhances the venue's prestige.
• Community and Economic Impact: Sponsors often invest in community programs, community engagement, local economic growth and reputation. • Competitive Advantage: Differentiates the venue from competitors and enhances its reputation by attracting more events and attendees. 4 2
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City of
Santa Clara
The Center of What's Possible
Naming Rights & Sponsorships (cont.)
Naming Rights Sponsorships
• Company pays a venue to • Company pays a venue to
name the venue after its brand. support integrated branding • Typically, 5 to 10-year terms for sponsorships and partnerships municipal venues such as throughout the venue:
convention centers. - Lobby spaces, entry ways,
• Provides financial support to the outdoor patio, meeting rooms, venue and brand exposure to exhibit halls, pouring rights the company. (beverage sponsorship)
• Typically, 3 to 10-year terms
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City of
Santa Clara
The Center of What's Possible
SCCC Background
• City has contracted with OVG360 (formerly
Spectra) since 2019.
• SCCC was originally built in 1986 and
expanded in 2009.
• Although SCCC net profits are growing
year-over-year, the total earnings and
capital investment fund are insufficient to
fully cover costs of repair, restoration, and
replacement of existing systems and
infrastructure, which exceed $10 million.
Naming rights and sponsorship revenues
offer large initial payments to improve
facilities, infrastructure and services.
7/16/2024 Item 7
City of
Santa Clara
The Center of What's Possible
Procurement and Proposal
Evaluation Process
7 City of
Santa Clara
The Conter of What's Possible
Procurement Process
• On March 18, 2024, City released RFP for
Naming Rights and Sponsorships for the SCCC.
• Goal of completing phased work prior to
December 31, 2024 in preparation for Super Bowl
LX and FIFA World Cup.
• A total of 21 companies viewed the RFP.
• City received two proposals by the due date of
April 8, 2024.
• Oak View Group Global Partnerships, LLC
(Philadelphia, PA)
• The Superlative Group (Cleveland, OH)
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City of
-PR
Santa Clara
The Center of What's Possible
Evaluation
• Proposals were evaluated and scored against the following:
- Firm Experience & Qualifications (40%)
- Work Plan / Project Understanding (25%)
- Cost / Fee Proposal (25%) OVG
- Proposal Responsive / Min. Qualifications / Firm Profile
OAK VIEW GROUP
(10%)
• The two firms participated in oral presentations on April 17 & 19, 2024 and oral presentations were considered in the final scoring.
Superlative
• Proposals were scored independently by City staff:
Assistant City Manager and Assistant to the City Manager; discussed in a team setting facilitated by a Contract
Manager from the Finance Dept. 9
City of
Santa Clara
The Center of What's Possible
Notice of Intended Award
• A Notice of Intended Award (NOIA) announcing the City's recommended firm was issued on May 2, 2024.
Recommendation
• Staff recommends award of contract to Oak View Group Global Partnerships, LLC (OVGGP).
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Santa Clara
The Center of What's Possible
OVGGP - Key Differentiators
• Presented an extensive ecosystem of
partnerships locally, nationally, and globally.
INCREASE IN SALES REVENUE
• Presented currently existing partnerships +112% YOY
FOR OVG GLOBAL PARTNERSHIPS
that could be incorporated with the SCCC.
• Presented an extensive track record of
successful naming rights deal in both the 11
NAMING RIGHTS DEALS SOLD
public and private industries. NAMING RIGHTS
DEALS RENEWED
• Presented internal resources including an
extensive executive team of industry
experts with comprehensive management 438 187 1
experience and relationships. NEW BRAND BRAND & VENUE NBA PATCH
CLIENTS SIGNED CLIENTS RENEWED SOLD
• Presented a regular cadence of internal
networking and sponsorship coordination
meeting among regional directors.
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City of
Santa Clara
The Center of What's Possible
Recommended Contract Terms
with Oak View Group Global
Partnerships, LLC.
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City of
Santa Clara
The Center of What's Possible
Agreement Terms
• Term
• Initial three-year term: July 22, 2024 through July 21, 2027. • Two additional one-year options to extend the agreement at the City's sole discretion.
• Termination Rights
• City has ability to terminate the agreement without cause upon 90 days of written notice.
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City of
Santa Clara
The Center of What's Possible
Agreement Terms
(cont.)
• Phase 1 - Asset Inventory and
Valuation
• Expected to be completed within the first
90 days of contract execution (July 2024
- October 2024).
• OVGGP will conduct an asset inventory
and valuation, including:
• Full audit of existing assets
• Ideation of new assets, valuation of assets
• Provision of a detailed report to the City on
all values for each asset, along with
potential partnership tiers, comparable
naming rights deals, and recommendations
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Santa Clara
The Center of What's Possible
Agreement Terms (cont.)
• Phase 2 - Sales and Marketing
• Expected to be completed within 14 months of the completion of Phase 1 (October 2024 - December 2025).
• OVGGP will hire a dedicated staff person responsible for local, regional, and national sales, servicing all corporate partnerships and for achieving measurable financial results.
• Other activities: development of sales and marketing strategies; creation of target entities list; creation of digital sales and marketing materials; implementation of a sales campaign; leading negotiations with entities; and ensuring timely delivery of agreements. 15 15
City of
Santa Clara
The Center of What's Possible
Agreement Terms (cont.)
• Cost Summary
• Fixed Compensation
• Phase 1 - Asset Inventory & Valuation: Not to exceed $46,859 • Phase 2 - Sales & Marketing: Not to exceed $150,000 annually ($140,000 in salary and benefits and $10,000 reimbursement for T&E) • Commissioned Services
• Facility Naming Rights: Commission of 13%
• Sponsorships: Commission of 18%
* Revenue generated will offset Phase 1 and Phase 2 costs. 16 16
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City of
Santa Clara
The Center of What's Possible
OVG Global Partnerships
• The proposed agreement with OVGGP is a separate agreement from the OVG360 Management Agreement.
• Activities related to naming rights and sponsorships fall under a different business unit within Oak View Group.
• OVGGP will work collaboratively with OVG360, Levy and the City in the coordination and implementation of naming rights and sponsorships to ensure little to no disruption to day-to-day operations. 17 17
City of
Santa Clara
The Center of What's Possible
Proposed Approval Authorities
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City of
CRISI
Santa Clara
The Center of What's Possible
City Council Policy 035
• Outlines criteria and procedures for the naming of City buildings and facilities.
• The SCCC is unique from other City facilities and the approval process as outlined in the policy would not apply.
• SCCC uses are commercial in nature and serves to generate revenue. • Time is of the essence to execute agreements prior to 2026. • A naming rights agreement will be brought forth to City Council for approval.
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City of
Santa Clara
The Center of What's Possible
Proposed Approval Authority
Organization Approval Authority
City Manager Approval of sponsorship agreements valued up to $1,000,000, including the naming of SCCC assets, with the exception of the principal naming rights partner for the Convention Center and the Mission City Ballroom.
City Council Approval of sponsorship agreements valued at more than $1.000,000 and the SCCC naming rights agreement.
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City of
Santa Clara
The Center of What's Possible
Proposed Approval Authority (cont.)
Example areas that may be sponsored under $1,000,000
include, but are not limited to:
Lobby spaces
Entry ways
Outdoor patio
Conference/meeting rooms
Exhibit hall
: Pouring rights (beverage sponsorship)
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City of
Santa Clara
The Contero Whats Possible
Proposed SCCC Naming Rights
and Sponsorship Guidelines
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7/16/2024
City of
Santa Clara
The Center of What's Possible
Proposed Guidelines
• City shall retain ownership and control of the venue, property, programs, or services.
• Sponsorships must not impair the City's ability to manage the facility, property, programs, or services.
• Agreements will not detract from the character, integrity, aesthetic quality, or safety of the property or unreasonably interfere with its uses, function, and purpose.
• Revenue generated will be used to support enhancements and capital improvement projects for the SCCC.
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City of
Santa Clara
The Center of What's Possible
Proposed Guidelines (cont.)
• City will not endorse the products, services, or ideas of any awarded Sponsor.
• Agreements must be for a fixed term. Every sponsorship agreement will have a sunset clause.
• City will reserve the right to terminate agreements prior to the scheduled termination date, without refund or consideration.
• Agreements may only be transferred or assigned by a sponsorship holder with the consent of the City.
• No actual or implied obligation for the City to purchase the produce or services.
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City of
Santa Clara
he contero whats Possible
Prohibited Content
• Obscenity • Promotion of drugs, alcohol, tobacco,
• Pornography gambling, or adult entertainment
• Incitement to imminent lawless action • Promotion of oil and gas products • Speech presenting a grave or imminent • Political campaign speech, or speech threat that supports or opposes or appears to
• Fighting words support or a ballot measure or initiative, or refers to any person in or
• Fraudulent material campaigning for public office
• True threats
• Religious speech that advocates or
• Defamatory, libelous, or slanderous opposes a religion or religious belief. material
• Solicitations to commit, or speech
integral to, criminal conduct
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City of
Santa Clara
The Contero What Possible
Prohibited Advertising
• Materials that advocate, contain price information or are indicative of associated savings or value, request a response, or contain comparative or qualitative descriptions of products, services, or organizations.
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City of
Santa Clara
The Center of What's Possible
Staff Recommendation
27 27
City of
Santa Clara
The Center of What's Possible
Staff Recommendation
1. Approve and authorize the City Manager to negotiate and execute an agreement with Oak View Group Global Partnerships, LLC for Naming Rights and Sponsorships for the Santa Clara Convention Center consistent with the terms and form of agreement in the staff report for an initial term starting on or around July 22, 2024 and ending on or around July 21, 2027, in the amount not to exceed $496,859 plus commissions;
2. Approve and authorize the City Manager to execute up to two one-year extension options to extend the term and increase the compensation amount of the agreement to $796,859 plus commission, subject to budget appropriations;
3. Authorize the City Manager to make minor modifications to the agreement, if needed; 28 28
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City of
Santa Clara
The Center of What's Possible
Staff Recommendation (cont.)
4. Approve and authorize the City Manager to negotiate and execute sponsorship agreements valued up to $1,000,000, including the naming of SCCC assets, with the exception of the principal naming rights partner for the Convention Center and the Mission City Ballroom; and
Approve the FY 2024/25 budget amendment in the Convention Center Enterprise Fund to increase Materials, Services, and Supplies budget in the amount of $496,859 and decrease in the unrestricted ending fund balance in the amount of $496,859 (five affirmative Council votes required for the use of unused balances). 29 29
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