County leaders are hoping a new agreement will help offset a six-figure deficit at the Richard M. Borchard Regional Fairgrounds.
Nueces County Commissioners last week approved entering into a commercial rights marketing agreement that could allow, among other things, for the sale of the naming rights to the fairgrounds facilities.
Kelvin Moore, general manager of the fairgrounds, said this is a deal he has been pushing for since the facility opened in January, but concerns about the tax-exempt status of the $6.7 million in bonds used to purchase the fairgrounds land delayed the negotiations.
"Our intention from day one was to sell the naming rights, but we had to ask ourselves, 'How can this be done without affecting the bond status?'" Moore said.
The contract allows for Front Row Marketing Services, L.P., sister company to Global Spectrum L.P., to engage "as the sole and exclusive representative for marketing of the commercial rights at the facility, including without limitation marketing of the naming rights, pouring rights, advertising, sponsorships, the branding of food and beverage products for resale, hospitality packages, and premium seating, including suites, lounges and VIP boxes."
Moore said Front Row will handle the set-up for a commercial rights deal and Global Spectrum will finalize it, but the final decision on whether the deal is approved may be up to county commissioners if the deal involves the naming rights.
However, the contract states that "if the commercial rights agreement does not involve naming rights, the approval (or rejection) of the commercial rights agreement shall be by the county judge as the authorized designee of the county's commissioners court."
Moore used a car dealership that could not afford to advertise with the fairgrounds, but wanted to be involved in some way, as an example of a situation when County Judge Loyd Neal would be designated to approve or reject the deal on the county's behalf.
Front Row will be paid a 15 percent commission from any sales that take place, including those done in-house by Global Spectrum, according to the contract.
The ultimate goal, Moore said, is to help the county offset some of the nearly $800,000 deficit the fairgrounds is currently operating with. A concessions agreement allowing for the sale of alcohol will also help, but the majority of the money needed will have to come from a commercial rights marketing agreement for the sale of the fairgrounds' naming rights, he added.
"The main goal is to get a naming rights deal," Moore said. "That's the big dollar item."
The American Bank Center carries the name of the owner, American Bank, of its naming rights, which were purchased about three years ago for an undisclosed sum. However, the duration of the deal is for 10 years, and Moore said it is likely the amount was paid for those naming rights was divided up over that term.
Such a proposal would be a possibility for the fairgrounds, Moore added, but it is still unclear as to whether or not Front Row will try to sell the naming rights to the fairgrounds complex as a whole or each facility individually.
"That will be determined by market demand," Moore said.
Precinct 4 Commissioner Chuck Cazalas said last week the move to try and sell the naming rights to the fairgrounds is a smart decision to help the facility climb out of debt.
"We're looking for the future. We're trying to move this county along where it has failed the (city of Corpus Christi) and county together over the years," Cazalas said. "I think what we're doing is an advance to the taxpayer because this will turn around with the kind of marketing that we're doing and with the other venues that are on the drawing board."