Vaughan seeking corporate sponsors to name rec centres, other facilities
York University professor warns of potential pitfalls with deals for naming rights

Yorkregion.com
March 14, 2017
By Adam Martin-Robbins

Can you imagine spending the afternoon with your kids gliding across the ice at the Coca-Cola Community Centre or catching a production of Pinkalicious the Musical at the Pizza Pizza Playhouse?

OK, those venues don’t exist in Vaughan at the moment, but they might if the city’s new Corporate Partnerships Program takes off.

Approved by council last month, the program aims to bolster the city's coffers by offering businesses a range of funding opportunities from purchasing naming rights to community centres and playgrounds to sponsoring tree planting campaigns and free public swims.

“This is one of the ways we want to explore to reduce the tax burden on citizens. I think it’s worth exploring,” Mayor Maurizio Bevilacqua said. “It will be reviewed to see whether it is successful or not, but preliminary information...tells us there are opportunities to raise money that would help provide services required by the citizens.”

Not all municipal buildings are eligible for naming.

For instance, companies can’t buy the rights to name city hall or buildings of historic significance. However, components within those facilities - such as meeting rooms or lobbies - will be considered on a case-by-case basis.

The program is projected to raise $2.5 million by 2026 and $1 million annually thereafter.

In 2017, the city plans to try and ink agreements to name Vellore Village Community Centre in Woodbridge and City Playhouse Theatre in Thornhill.

Vaughan isn’t alone in going down this road.

A 2015 survey by the Centre of Excellence for Public Sector Marketing found nearly every municipality with a population over 50,000 engages in corporate sponsorship deals, with 94 per cent of those seeking naming rights sponsors.

Not surprising given municipalities can raise substantial sums for sought-after facilities without a huge tax hike.

Newmarket, for example, fetched $5 million ($500,000 a year for 10 years) from Magna to name a state-of-the-art, $39-million recreation centre.

But York University political science professor Robert MacDermid says there are potential problems with these types of deals.

“Elected representatives want to do things for their constituents, they want to have new infrastructure. So if a developer can make a contribution to that and get their name on that thing it gives them some leverage, I think, over planning officials and elected representatives when it comes to making a decision about a development down the road,” he said. “Even at the time they’re negotiating the naming rights, there may well be some discussion about a quid pro quo.”

Bevilaqua insists that won’t happen in Vaughan.

“All partnerships will be governed by the new corporate partnership policy that clearly defines the partnership agreements as separate to any other interaction with the city,” he said. “There’s no linkage between a donation and preferential treatment by the city. What this is more about is the ability of people to exercise civic responsibility by making investments in the community.”

MacDermid also points out some governments or institutions give away naming rights for a tiny fraction of what the facility actually costs, which seems unfair to taxpayers who bear most of the cost.

That's exactly what happened with the Trisan Centre in Schomberg, according to King Township Mayor Steve Pellegrini.

Before the 2010 election, councillors approved a deal to put the construction company’s name on the $14.9-million facility for 50 years in return for $300,000, which works out to $6,000 a year.

Pellegrini, who railed against the deal before the 2010 election, said that’s equivalent to the cost of renting space on a bus shelter.

After winning the election, Pellegrini found himself in the uncomfortable position of having to sign the final agreement with Trisan and says when he told the company he couldn’t do it, the owner agreed to reduce the term to 25 years.

Still, Pellegrini says the naming of a major recreation facility should fetch $1 million.

MacDermid says municipalities should take a different approach.

“I would be in favour of recognizing that this (corporate sponsorship) exists and trying to acknowledge donors in other ways that are more modest and so decrease the leverage they might have over planning officials and councillors,” he said. “That may affect, of course, their willingness to give the money.”

He also points out there’s a risk to municipalities if the company awarded the naming rights suffers reputational damage as a result, for instance, of unethical or illegal business practices

Bevilacqua is confident that won’t happen.

“On my watch, none of that has ever occurred in seven years and it will not occur in the future either because we will have strict guidelines that people have to follow,” he said, noting his annual Mayor’s Gala has raised money for years through corporate sponsorships.

“There are companies, there are individuals whose track record speaks for itself and there are ways to access some funding that is presently not available. So we’re just creating opportunities.”