Cities Selling Naming Rights
From just about Day 1 on the job here in Kent, I’ve been trying to come up with a way to fix our budget deficit (try a $2 million shortfall on for size) that doesn’t get me run out of town by City Council, City residents, City employees or all of the above. I’ve been in this business long enough to know that both “tax” and “cut” may look like three letters but in reality they are four letter words that often end with pitchforks, torches and a late night sprint to the border. I like it too much here in Kent to go down that path so I’m constantly scanning the wire for news of roads less traveled taken by other cities to see if somebody found that elusive money tree. Recently, I read a report that talked about how more and more cities are going commercial (some would call it selling out) — I can’t say for sure what we can name for who here in Kent but at this point I’m floating as many trial ballons as I can to see if anything sticks.
Sponsors of facilities at two public high schools in Sheboygen, Wisconsin and what they paid for the naming rights:
• Acuity Insurance field houses: $650,000
• Aurora Health Care cardiovascular (workout) rooms: $400,000
• Sheboygan Orthopaedic Associates locker rooms: $45,000
• Associated Bank school stores: $60,000
• Richard Bemis Foundation gyms: $300,000
• The Santa Cruz, Calif., parks and recreation department is trying to sell naming rights to a skate park to repay a $300,000 construction loan. “My goal is to keep our facilities up and running. This seems to be a natural,” says parks director Dannettee Shoemaker.
• In Newburyport, Mass., the high school offers naming rights to the principal’s office for $10,000, the auditorium for $100,000 and English classrooms for $5,000 each, according to its foundation’s website.
• The Clark, Texas, council voted in November to rename the town DISH in exchange for a decade of free satellite TV from the DISH Network. The deal was worth $4,500 to each of DISH’s 55 homeowners.
Kitchens at two high schools in Sheboygan will soon be called the Kohler Credit Union kitchens, thanks to a $45,000 donation. The cafeterias are up for grabs for $300,000.
Cities and schools can get one-time payments in excess of $500,000 for naming big facilities. Schools have been selling the rights for several years, and now an increasing number of cities are joining the trend, says Larry Foxman of the National League of Cities.
Chicago is accepting bids to name the freeway now called the Chicago Skyway. Washington, D.C., considered selling naming rights to its subway stations. Las Vegas sells naming rights for its monorail.
Dean Bonham, CEO of the Bonham Group, a sports marketing company that negotiates naming rights, says the deals work for schools and cities because “it costs them nothing to create this revenue.” For companies, it’s “the best marketing platform available.”
Other cities on bandwagon
Critics argue against commercializing civic buildings. The answer to budget woes isn’t for cities and schools “to put themselves up for sale,” says Gary Ruskin of Commercial Alert, a non-profit group. “It shows the decline in our values.”
The school board in Sheboygan voted unanimously last year to sell naming rights. The City Council did the same thing in May. The alternatives: cut programs or raise taxes.
Ben Salzmann, CEO of Acuity, eagerly paid $650,000 to put the name of his insurance company on two new high school field houses forever.
He’s not hoping for new customers; he’s looking for future employees. “We use naming rights to get our name out, to attract people, to keep people,” he says. “When people graduate, we want them to say, ‘I want to work at Acuity.’ ”
More than $1.5 million in naming rights to schools have been sold here. That success prompted the city to pursue the idea. Mayor Juan Perez says it’s a painless way to increase revenue, because the economic situation is “very bleak.”
“Like so many cities, we’re struggling with an ever-shrinking budget and with the fact that our taxpayers are just tapped out,” says Alderman Mark Hanna.
There has been little controversy in this city of 51,000 about the rush to sell naming rights. Perez says he has had maybe two e-mails from constituents objecting to the plan.
“If it’s something that’s going to allow us to improve the school system or the city, I don’t think it’s a bad thing,” says Bill Greinke, owner of The Sign Shop of Sheboygan.
Naming rights for school facilities are handled by a non-profit foundation that came up with the idea to help pay for programs and facilities that the Sheboygan Area School District can’t afford, foundation President David Sachse says.
The money goes to the foundation, which then makes grants to school programs. So far, Sachse says, the funds have been used to refurbish musical instruments, to provide calculators to needy students, to buy supplies for a culinary class and for a marketing plan for school stores.
Recruiting future workers?
Without the money, schools Superintendent Joe Sheehan says, “we’d still be surviving, offering our kids a strong base, but nowhere near where we are with the help of this program.”
School districts in other Wisconsin cities, such as Plymouth and New Berlin, also sell naming rights. Sheboygan is among the first cities in the state to adopt the idea.
Many city-owned facilities — except the new police station and places such as parks that already are named to honor residents — will be available for naming. A committee will assign prices and screen prospective buyers, then the council will vote on each.
The mayor says naming rights aren’t just about bringing more cash into the city coffers. “It’s also a way of creating a sense of ownership in our community,” Perez says.
And it’s good business, Salzmann says. Acuity, which has 820 employees at its headquarters here, sponsors an art room for kids at the local museum, a spelling bee, math programs and a technology center at the University of Wisconsin-Sheboygan. Acuity paid $325,000 to put its name on a high school auditorium in Plymouth.
“We’re investing in the 5-year-olds who, two decades from now, may start working here,” Salzmann says. “We’re using naming rights to recruit employees over decades.”
So what have we, or can we, name here in Kent?