Fresno considers selling naming rights for Convention Center

What’s in a name? That’s what the Fresno City Council hopes to learn over the next year or so by hiring a consultant to explore the value of naming rights to the Fresno Convention Center complex.

During the City Council’s Wednesday hearing on portions of Mayor Ashley Swearengin’s proposed 2016-17 budget, City Councilman Lee Brand asked for an extra $100,000 in the spending plan for consultants to help the city market the rights for a company to plaster its name on the Convention Center. The complex includes Selland Arena, Valdez Hall, William Saroyan Theatre and the Convention Center Exhibit Hall, all along M Street between Kern and Ventura streets in downtown Fresno.

The complex is owned by the city and managed by SMG.

Hiring a consultant could be something of a gamble. William Overfelt, SMG’s general manager for the convention center, cautioned that the top-flight consulting companies in the naming rights business can charge $7,500 per month plus expenses and typically want a contract with a term of 18 to 24 months. “The heartburn is, there are no guarantees that they would be successful getting a rights deal we would be happy with,” Overfelt said.

City Manager Bruce Rudd said that in addition to upfront costs of $100,000 per year without assurance of success, another concern is the timing of seeking a naming rights deal. “Do you go out now, or do you wait another year or so for some other things to come to fruition?” he asked the council, referring to downtown redevelopment, the Fulton Mall reconstruction and development of a downtown Fresno station for California’s high-speed rail system. As those projects are realized, “the value of the naming rights could go up,” Rudd said.

Brand said he believes the potential revenue from selling the naming rights is worth rolling the dice on the upfront costs. “There’s a direct relationship between activity at the convention center – people coming through the turnstiles – and the naming rights,” he said, suggesting that the city could reap as much as $500,000 a year. “I think it’s a worthwhile investment for an opportunity for a half million dollars a year in ongoing revenue.”

Overfelt said that in preliminary discussions, consultants have said the city would likely receive more money from branding the entire convention center rather than its individual venues. He added that consultants suggested a naming rights contract would have to be for at least a 10-year term.

Councilman Oliver Baines, whose southwest Fresno council district includes downtown, said he’d prefer that the city not lock itself into a contract for more than 10 years. “I think 10 years from now the city will look a lot different, and the rights could command more value,” Baines said.

Money to hire the consultant could come from the savings the city will realize from having to provide less of a subsidy for the convention center’s operations in the coming budget year compared with the 2015-16 year.

No action was taken on Brand’s motion; it will be considered, along with other suggestions made during the past two weeks of budget hearings, in a meeting Tuesday at Fresno City Hall before the scheduled adoption of the budget by the City Council on June 23.

The convention center’s $16.9 million budget also includes the Chukchansi Park stadium, where about $1.6 million is earmarked for capital improvements and maintenance. The budget anticipates income from lease payments by the Fresno Grizzlies baseball team of about $400,000 in 2016-17 – less than the $750,000 per year that the team agreed to in 2009. That money goes toward annual payments of about $3.4 million on bonds that were sold to build the stadium.

Other bonds sold to finance improvements at the convention center tie up another $5.5 million each year from the general fund.

This story was originally published June 15, 2016 at 1:46 PM with the headline "Fresno considers selling naming rights for Convention Center."