Countys Corporate Sponsorship Proposal Small Business Role Collide
Written by Frank Norton on June 13, 2002
By Frank Norton
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Miami-Dade County could double its revenue from beverage-sales licensing by launching a program to sell exclusive vending and other marketing rights to corporate sponsors, says the performance improvement chief.
Corinne Brody, who directs the Office of Performance Improvement, and other county staff are recommending the sponsorship effort as a way to tap private sector dollars amid Miami-Dade’s lower sales tax revenues and budget constraints of the past year. Last year, the county hired the Cleveland-based Superlative Group to identify and develop a marketing plan for such sponsorships.
But what sounds like smart public asset management to some appears to be economic discrimination to others.
Last week Gilda Rosenberg-Perzek of Gilly Vending Inc. temporarily derailed discussion of the county manager office’s recommendation for sponsorship programs, saying her roughly $2 million firm would be automatically priced out of any large-scale sponsorship bid. Gilly Vending has supplied part of the county’s beverage services for five years.
"This kind of bid would destroy the possibility for any local company to compete for it," Ms. Rosenberg said, hours after Commissioner Natasha Seijas moved to defer the recommendation.
Gilly Vending’s lawyer, Gloria Velazquez-Meitin of Greenberg Traurig, said her client does not oppose the county’s effort to benefit from scale but simply wants to be included in the process.
"This plan really caught us by surprise because Gilly Vending is one of the county’s current vendors and we had no idea about it. I think we would both love to see a great sponsorship program put forward where local vendors share an equal and fair playing field to bid for government contracts," Ms. Velazquez-Meitin said.
Representatives of the county manager’s office plan to meet this week with county officials and current vendors to discuss guidelines for such a marketing program.
But any exclusive vending agreement would require that only beverage marketed by one brand would be available at county properties included in the contract.
"You’re going to get a Coke or Pepsi graphic machine with their product only. No more Jupiña, Tropicana Twister or what ever it is you want," said Willard Renfrow of Brady Distributing’s Palm Beach office, which supplies coin-operation machines to South Florida vendors. "You’ll lose out on selection."
The county now contracts with five beverage vendors, which together generate about $360,000 for the county, said Kevin Lynskey, assistant director of performance improvement, who helped write the sponsorship recommendation. He said a consolidated and exclusive contract with a corporate sponsor would add revenue streams such as exclusivity fees, vending machine placement fees and a higher percentage take of gross earnings that small deals do not provide.
An exclusivity fee alone would be in the millions of dollars per year, he said.
According to a performance improvement memorandum to the county commission, Volusia County negotiated a sponsorship deal with Coca-Cola in 1999 that is expected to provide an additional $3.5 million over five years. In March, Broward County Parks signed a similar exclusive vending deal with Pepsi. Revenue for that deal was not available, but the county will receive 52.5% of gross sales, including tax, for soda and juice.
Miami-Dade currently receives about 28% of beverage vending sales.
"To continue with five separate contracts is piecemeal," said Assistant County Manager George Burgess. "We’re not looking at the big picture." Of the county’s five current vendors, he said, only two might be defined as small businesses, whose interests pale in comparison to the possible benefits to the county.
"We’re not saying corporate sponsorship is a bad idea," said Ms. Velazquez-Meitin. "It could be great. We’re just saying let’s look at the steps toward getting there" to ensure a responsible precedent, she said.
The Superlative Group is to submit a marketing plan to the county in July detailing other marketable assets such as social, business or sports activities, web sites, parks and other facilities.
Mr. Lynskey and other county staffers are confident their recommendation will come back before the county commission by that time.
"The beverage vending deal is just the lowest fruit hanging on the tree," Mr. Lynskey said. "It’s part of a much broader effort."