What's the hurry to secure naming rights for the West Valley Event Center? City officials are starting to wonder.
City Manager John Patterson said Wednesday it might be in the city's best interest to wait a year or more, perhaps until after the 1998 Winter Games to sell naming rights to the $53.3 million arena.Patterson learned late Wednesday morning that a New York insurer, AMBAC Investors Services, has agreed to sell the city insurance on its upcoming issue of $32-$34 million in bonds to finance the arena. By obtaining insurance, Patterson said, the city has assured the arena will be constructed whether or not it receives a dime for naming rights.
An ice-cold beverage, however, could help city leaders swallow that bond debt. It's doubtful they'd go for a beer, but a Pepsi or wholesome glass of milk might hit the spot. PepsiCo Inc. and Borden/Meadow Gold Dairies have been identified as two of five contenders in the naming-rights sweepstakes.
The Coors Brewing Co. is not included on that list, although it has asked the city to make a formal presentation to company representatives. The City Council has yet to decide whether it will pursue Coors' interest.
The city might not pursue any corporate sponsorship for awhile, depending on the outcome of a meeting planned for Thursday. Patterson has invited an out-of-town consulting firm to make a presentation to the City Council. The company, which Patterson would not identify, thinks the city might be able to get more than the $7 million it's asking for if it sits tight for awhile.
"We have insurance guarantees that the (arena) will be completed to our satisfaction without consideration for the naming rights," Patterson said. "Naming rights, however, will assist in a large way with debt reduction and therefore annual debt-service reduction. So the sooner the better.
"However, we want to maximize the naming-rights sponsorship and therefore are doing analyses to determine when would be the best time to enter the market and will be working with a company that will assist us with that decision. One of our council members suggested that the Nagano Games in '98 might cause there to be much greater demand for the naming rights and for a much greater price. . . . Which is of greater value, $7 million now or $12 million in '98?"
Patterson said the city has identified more than a dozen potential corporate sponsors for the arena. Five are considered serious possibilities. However, two of those, PepsiCo and Borden/Meadow Gold, may not be that serious after all. Representatives of both companies have indicated their interest in the naming rights is minimal at best.
"Over a year ago we were provided information with the opportunity (to purchase) naming rights for the stadium, but it's not really something that fits into our marketing strategy right now," said Ann Marie Woessner, senior group manager of economic development for Frito-Lay Inc., a PepsiCo subsidiary.
Patterson, however, said he has reason to believe that both PepsiCo and Borden/Meadow Gold, which has its dairy headquarters in Ogden, still are legitimate candidates.
"Information that our consultants have given me indicate (Borden/Meadow Gold is) interested," Patterson said. "And frankly, we think it's a great mix from a product standpoint with the opportunity for concessions like ice cream, frozen yogurts, other dairy products, and then also just having the presence in their market."
Patterson said the city would even change the name of Decker Lake Drive, which leads to the arena, to Borden Blvd.
"Five I think are serious prospects and I would put PepsiCo in that group . . . and there are reasons for me feeling that way," Patterson aid.
Frito-Lay Inc. has a West Valley plant.
The city learned Tuesday that Moody's Investors Service of New York has given the city a bond rating of "Baa" - the fourth-highest investment-class rating available. The rating helped the city qualify for insurance, Patterson said.
The city received an "A" rating in 1993 when it bonded for construction of its City Hall building and restructured the debt for the city's golf course. Patterson said he was particularly pleased with the "Baa" rating since the arena is not considered an essential government facility. The City Hall was deemed essential and received a rating only one step higher, he noted.
The $32-$34 million bond issue should begin on either Oct. 3 or Oct. 7, Patterson said. The exact interest rate the city will pay will be determined then.
The West Valley Event Center, now under construction, will serve as home of the International Hockey League's Utah Grizzlies and be used for short-track speed skating during the 2002 Winter Olympic Games.