A new five-year agreement for the city’s arena naming rights will see the annual fee more than triple, delivering a significant revenue boost to both the municipality and the Sarnia Sting.
The Progressive Auto Sales Arena will keep its name for another five years, but the price tag attached to the branding is set to rise significantly.
Sarnia City Council will consider a recommendation on December 15 to approve a new naming rights agreement with Progressive Auto Sales that sets the annual sponsorship fee at $150,000.
This represents a substantial increase from the current agreement, under which the local dealership pays $42,500 plus HST annually.
Under the terms of the deal, the city will continue to split the sponsorship revenue evenly with the Sarnia Sting.
The new rate is expected to generate an additional $50,000 per year in direct revenue for the city compared to the previous contract.
The agreement includes an inflation escalator of 1.5 per cent that will apply in the third, fourth, and fifth years of the term.
Progressive Auto Sales exercised its option to extend the partnership in July, initiating a negotiation process required to establish a fee based on fair market value.
Negotiations between the car dealership, the city, and the hockey club concluded with the proposed $150,000 annual fee, which staff describe as a result of good faith bargaining.
If approved, the five-year renewal will mirror the duration of the original 2016 agreement.
City staff noted that failing to sign a new agreement by December 1 would have allowed the municipality to seek other sponsors, but the deal was successfully negotiated before that deadline.
The recommendation authorizes the Mayor and Clerk to execute the necessary agreements to finalize the sponsorship.
