August 27, 2004
If sports teams can sell naming rights, then why can't Scottsdale?
That's the thinking behind a new policy that would allow Scottsdale to seek corporate sponsorships for city-owned or operated facilities, such as Scottsdale Stadium and WestWorld of Scottsdale.
The idea is similar to the common practice of selling sports venues' names to corporations.
Municipal marketing is a relatively new concept in Arizona, and one that is just emerging from the embryonic stage nationwide, experts say. Supporters argue it can be a way for cities to offset budget shortfalls, while critics say the idea can sell a city's soul.
At least two other East Valley cities are discussing similar marketing policies.
"It's a new source of revenue. There will probably be some purists that will argue cities are getting too commercialized, but if cities are looking for incremental revenues, it's a natural," said Arizona State University's Jim Kahler, executive director of the MBA Sports Business Program at the W.P. Carey School of Business.
"Why not have naming rights on the stadium where the (San Francisco) Giants play? That's an attractive property that could bring some real revenue."
The Scottsdale City Council is scheduled to vote Monday on the Municipal Marketing Policy. In addition to naming rights, it would allow the city to seek corporate partnerships for public projects such as aquatic centers, and other community programs that are currently funded with taxpayer money. It would prohibit partnerships with companies that sell alcohol, tobacco or sexually oriented products.
Mesa is considering a similar plan. That city has formed an Alternative Funding Source Committee, which is expected to present a report to city management in the coming months.
Ideas include seeking corporate sponsorships for the Mesa Arts Center, the planned aquatics center and city-owned Hohokam Park and Mesa Amphitheatre, said Rhett Evans, the city's parks and recreation director.
"The list goes on and on in terms of what we could have sponsored so we can keep programs alive when our budgets are being reduced and sales tax is limited," Evans said. "It's just an alternative source of funding that municipalities are having to pursue to make ends meet."
Chandler officials are in the preliminary stages of discussing corporate partnerships and naming rights, said spokeswoman Nachie Marquez.
The trend toward governments seeking corporate sponsorships gained steam at about the beginning of the most-recent recession, said Gary Ruskin, executive director of Commercial Alert, a national nonprofit group that opposes such commercialization.
Besides being just plain tacky, the idea can have serious side effects, he said. For instance, municipalities can face charges of favoritism if a corporate sponsor seeks additional business ventures in the city. It also opens the door for more blatant advertising, such as a giant Coke bottle at City Hall or other municipal buildings.
"Once you accept the proposition that Scottsdale is for sale, then where does it end?" Ruskin asked. "Government is too important to be for sale."
Scottsdale has resisted efforts over the years to put advertising on its bus stops. That's one reason people shouldn't fear that Scottsdale will turn into a giant advertisement for corporate America, Mayor Mary Manross said.
"I don't think anyone has to be concerned that all the sudden you are going to see advertising everywhere," she said. "An example would be something that is really beneficial to the community or helps us complete a real important capital project."
"It's possibly a good opportunity for the city to get more revenue, as long as we have a real structured policy."
Other cities across the country are doing it, as well.
General Motors Corp. sponsors San Diego-owned lifeguard vehicles, and the city signed a soft-drink deal with Pepsi. Snapple is the official drink of New York, which additionally has other corporate sponsors for city-owned facilities.
Huntington Beach, Calif., a city roughly the size of Scottsdale, inked a 10-year, $3 million deal with Coca-Cola to give the soft-drink giant exclusive rights at beaches and parks. It also contracts with a local bank that underwrites a concert series on the city's pier.
"People thought that when we got into this agreement we were going to be plastered with Coke ads and banners. That hasn't happened," said David Dominguez, facilities and concessions manager for Huntington Beach.
Corporations benefit in the deal by being able to associate the product's name with the city, rather than inundating a city with corporate logos, said Lisa Murphy, Scottsdale's accounting director.
Mark Brnovich of the conservative Goldwater Institute sees the concept as a way to put "downward pressure" on public expenditures.
"That's what good public leaders do; they try to come up with innovative sources (of revenue)," said Brnovich, director of the institute's Center for Constitutional Government.
But Nicholas Damask, a political science professor at Scottsdale Community College, said the concept actually encourages cities to rely on the corporate dollars rather than maintain a fiscally conservative budget.
"It perpetuates the spending programs," he said.