Corporates could be offered a range of new sponsorship opportunities if ideas raised in an EY review of Auckland Council alternative financing sources gain traction.
Citing ANZ’s purchase of naming rights on Auckland’s Viaduct Events Centre, said to be worth “millions,” EY notes further opportunities for Auckland Council to generate revenue via naming rights and corporate sponsorships. This could include corporate sponsorship and show casing of art currently in storage, sponsorship of enclosures at Auckland Zoo, and naming rights of train stations, bridges, tunnels and other public infrastructure.
“Currently 96% of all artwork on the Auckland Council balance sheet sits in storage. The total asset value is $350 million and requires a large ongoing maintenance cost, in terms of storage and insurance, yet the public does not get a consistent chance to view these works through the current model,” EY says.
“While we understand a 5% to 10% artwork rotation rate reflects standard practice, we believe corporate sponsorship of artwork could help reduce operating costs, provide a one-off revenue boost to the Council and ensure that more artwork is seen by the public.”
Meanwhile, EY notes Auckland Zoo is almost fully self-funded and has valuable relationships with existing corporate sponsors.
“However, the sponsorship of animals or enclosures could help reduce the need for any rate subsidy for major projects and ongoing operation of the zoo,” says EY.
The firm recommends Auckland Council does a commercial assessment of current zoo sponsorship deals and explores the market for additional ones. It cites the example of Dublin Zoo where annual sponsorship income is estimated at €250,000 and includes sponsorship of the South American House by Kellogg’s Coco Pops.
EY also recommends Auckland Council undertakes a commercial assessment of its assets with potential naming rights, followed by a “high level market sounding” for commercial interest. It cites the example of a New York deal done in 2009 whereby Barclays Bank paid the Metropolitan Transport Authority US$4 million for 20 years naming rights to the Atlantic Avenue/Pacific Street subway station in Brooklyn.
Auckland Council’s Finance and Performance Committee will consider the EY review, and another by Cameron Partners, during a meeting this Thursday, November 19. From there it will decide what if any items it wants to see further work on, says councillor Penny Webster, who chairs the committee.
The reports canvass a broad range of potential financing options including increasing debt and asset sales. Cameron Partners notes that Auckland’s population is forecast to grow by about 50%, or 750,000 over the next 30 years.
“Effectively it will add the population of Hamilton every five to six years. To meet this growth Auckland Council must make significant infrastructure investment on a timely basis,” Cameron Partners says. “Accordingly Council wishes to investigate its ability to change the capex (capital expenditure) plan and potentially accommodate various new projects or deliver existing projects to an earlier timeframe through a review of alternative funding sources.”
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