Sioux Falls, SD
What's a name worth? That's the question Mayor Mike Huether's office wants to explore. But to find out, the administration says its going to cost $65,000.
The City of Sioux Falls hopes to use naming rights to finance a new events center. But, before a company pays to have its name attached to the side of the building, the mayor's office is asking the city council to approve extra money to study the issue.
Naming rights for the facility has been part of the conversation since the mayor gave his proposal last year.
Now, the city says it will have to put up thousands of dollars to see how much company's are willing to pay to have their name tied to an events center.
"We want to make sure, and Mayor Huether has been very adamant about this, that we're not speculating with a $100 million facility," Sioux Falls Community Development Director Darrin Smith said.
Now that plans for an events center are starting to come together Smith says the city wants to hire a consultant to figure out just how much money naming rights could bring to the bank.
"Very candidly nobody really in the city of Sioux Falls specializes in this kind of thing. It's a very specialized expertise, so we went looking for that and we think we found it," Smith said.
The administration wants to hire The Superlative Group from Cleveland, Ohio to not only study naming rights for the events center, but also for other facilities in town like the arena, the zoo and the Washington Pavilion.
The group will talk with local businesses to see how much they are willing to pay to have their name associated with a place, then give an idea of fair-market value.
But, before the group can be hired, the city council has to sign off on the request.
"This is important information for the city to have. So, it's a struggle for us because we want them to have it, but for goodness sakes where do we draw the line," city council chair Greg Jamison said.
A half million dollars has already been approved for hiring an architect and other consulting firms. Jamison says he's uncomfortable with a request for more money.
"We made a promise to the citizens to spend $500,000 to get this done. The mayor was very confident that he could get it done. Now, we're here at the end and we're not done, and there's still more to come," Jamison said.
Smith says this information is needed. He says naming rights can't just be award to the highest bidder because they don't want to short-change the taxpayers.
"You need to know first and foremost what is a reasonable fair-market value for this facility. So, you're not underselling yourself and going out there and giving the naming rights away for an amount that is nowhere near what you could have received. The taxpayers in Sioux Falls deserve better," Smith said.
The council will consider the $65,000 request at Monday night's council meeting.
They hope to vote on the extra money on April 18th.