Soda giants offer city perks for rights
By DEBORAH O'NEIL
© St. Petersburg Times, published January 27, 2001
CLEARWATER -- The city got its first look Friday at more than $1-million in cash, prizes and marketing perks Coca-Cola and Pepsi each has offered for the exclusive right to sell drinks at city parks and buildings.
The promised benefits range from Coca-Cola's offer to host pizza parties for city workers to Pepsi's offer of a one-time, cash signing bonus of $75,000.
Coca-Cola said with annual sales of 20,000 cases, its offer would be worth $1.4-million over 10 years. Pepsi, which projected annual sales of 23,500 cases, said its deal was worth $1.6-million over 10 years.
Both companies said the city would earn more money if vending machine sales were higher than the projections.
The city cannot accept both deals, as each offer requires the sole right to put its vending machines at more than 50 city facilities. The city would pay nothing under either arrangement.
Officials from the city and Public Enterprise Group, a California company the city hired to help it develop the deals, met with executives from Coca Cola and the Pepsi Bottling Group for several hours Friday.
In the past, some city commissioners have said they hoped the public-private partnerships with the corporate giants would generate money and spare the city from having to raise taxes for such expenses as more firefighter salaries. When the issues surfaced, city officials said they wanted payments of up to $5-million over 10 years.
"And since there are already vending machines around the city, this would have little impact to the public for the money we would get," Mayor Brian Aungst said last year.
After Friday's meetings, Parks and Recreation Director Kevin Dunbar, who was part of the discussions, stressed benefits to the community rather than the bottom line.
"Partnerships do not mean, "What's the biggest check you can write?' " he said. "We want to partner with the business community to enhance the quality of life in the city of Clearwater. They've kind of called this the "Coke Deal' or "Soft Drink Deal.' That's not what this is at all."
The proposals are preliminary, and city officials said they need to be reviewed and clarified. City staff members are planning to bring a recommendation to the City Commission on March 1.
Here are some of the highlights from Coca-Cola's proposal:
The city would receive hundreds of certificates annually that employees could use to get free drinks at work.
Coca-Cola would host a quarterly pizza party recognizing the city's "team of the quarter."
The company would partner with Clearwater retailers to offer citywide buy-and-win promotions.
The company would provide banners, coolers and other items at city special events.
Coca-Cola would promote city events through its partnerships with other local companies as well as Pinellas County's public schools. "This is a unique opportunity to market the city's special events to students and faculty," the proposal reads.
The company would provide free advertising for Clearwater special events on the back of up to 20 Coca-Cola trucks.
The company would provide Clearwater Beach with lockers bearing the Coca-Cola logo, which, the company notes, can generate more money if the city charges a locker rental fee.
The city would receive commissions on all vending machine drink sales that range from 24 cents for each 60-cent, 12-ounce drink to a quarter for each Dasani, Fruitopia or Power Ade.
Here's what's in the Pepsi proposal:
Pepsi would provide free advertising for city events on up to 15 Pepsi trucks.
The company would also provide up to 25 promotional banners per year for city events.
The city would get about $18,000 worth of free drinks over the 10 years.
The company would conduct local and national marketing programs to promote the city.
The city would get an up-front cash payment of $75,000 the first year and $10,000 each year after for nine years.
The city would receive a guaranteed 20 percent commission on all vending drink sales.
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