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Wednesday, October 17, 2012

City Council Looks at ‘Marketing Malibu’ to Put Big Bucks in the Till

• Some Officials Think the Financial Potential Is Great Enough to Eliminate Local Fiscal Woes


Can the City of Malibu make money on its name? That is the question that will be posed before the Malibu City Council next week when it is being asked to spend $90,000 from its reserve fund to hire an exclusive licensing agent for the municipality.
The idea, which was highly touted by former Councilmember Pamela Conley Ulich, comes at the behest of the city’s  communications ad hoc committee comprised of Mayor Lou La Monte and Councilmember Laura Rosenthal.
Excel Corporation is the licensing agent, which has agreed to provide a recoupable fee of $7,500 a month for a period of 12 months for a total of $90,000.
“It is anticipated that the fee of $90,000 will be recouped with this program and the general fund will be reimbursed for the full amount,” wrote Reva Feldman, assistant city manager, in a staff report.
Malibu city officials seem convinced that given Malibu is a well-known name around the globe, there should be many opportunities for the city to make money on a licensing program.
“The City of Malibu is an internationally recognized community. There are many opportunities for the city to develop a licensing program with an official City of Malibu logo. Currently, the city does not have a trademark or the licensing rights to the name ‘City of Malibu’ or to any specific logo,” added Feldman. The attempt is to create a new revenue source for the municipality.
The city’s A&F subcommittee also looked into the matter and directed staff to research licensing agents and branding companies and to provide a report to the Communications Ad Hoc Committee, which listened to an oral report from the staff about two months ago.
The committee was told about how other municipalities approach branding and licensing. They also got information on successful campaigns as well companies and agents being used by other cities.
“Most municipalities that develop a licensing program do so in an attempt to change the image of their city,” Feldman wrote, “These cities typically hire a licensing or branding company that markets the city for tourism. The City of Malibu is not faced with this challenges, as the city is highly regarded and hosts 15 million visitors a year.”
The assistant city manager noted the city is not interested in pursuing a branding campaign, but rather a licensing program that will preserve the “unique characteristics of Malibu.”
“Many private companies are currently profiting from the use of the Malibu name. Products such as the Chevy Malibu, Malibu Rum, Malibu Barbie and Malibu Boats are actively being marketed. The city has a unique opportunity to receive a substantial amount of revenue from its own licensing program,” Feldman wrote.
Experts say the typical approach to increasing municipal revenue is to increase taxes.
“The opportunity to establish a new revenue source that does not create a new tax or obligation for residents is extremely unique.”
Feldman, in her staff report, assures the council and the public, that the city is in good financial shape, but a new revenue source could create the opportunity for additional community benefits such as public safety, environmental programs, parks and recreation services, capital projects and overall enhanced city services.
After extensive research with a variety of licensing agents and firms, it was determined by staff that Excel Corporation would be appropriate to represent Malibu, according to Feldman. “Very few licensing agents have experience in licensing and marketing public entities. Excel has represented such entities as the Brooklyn Bridge, the Statue of Liberty/Ellis island, the Bush to Bush Inaugural Celebration, UNICEF and the American Ballet Theater. They also represent individuals, private companies and are currently assisting with the Centennial celebration for the city of Beverly Hills.
The communications ad hoc committee met with Excel representatives and recommended the staff work with them on the terms of an agreement, according to the staff report.
The one-year renewable agreement, if approved by the council, provides for the municipality to retain control over all logos and that the city will have the final approval of all licensing agreements and product selection.
The proposed agreement provides for the creation of a new logo or logos that can be licensed. The city retains the existing city seal and would continue to use the seal for all official city documents and official city business matters, according to Feldman.
The proposed agreement calls for the city to receive revenue based on wholesale sales. The city would receive about 10 percent of the wholesale revenue. Excel will be paid on a percentage basis.
In other matters, after several continuances sought by the owner, MMK Enterprises, Inc. of the Circle K convenience store located at 21216 Pacific Coast Highway, an appeal hearing sought by the applicant is expected to go forward next Monday.
The appellant, who is also the applicant wants the city council to overturn the planning commission’s decision to not allow the store to sell beer and wine.
The city council was scheduled to hear the appeal at its regularly scheduled meeting back in July when it was postponed and another cancellation was sought for a rescheduled date on Aug. 27 until Sept. 10.
At that time council members said they wanted the matter scheduled for a date certain on Oct. 22
The planning staff is recommending the council deny the appeal and also deny the Conditional Use Permit for “the sale of beer and wine for offsite consumption as an accessory use to the existing Circle K convenience store.”
The proposal was rejected by the planning commission on two separate occasions.
During the previous hearings, commissioners were apparently swayed by public opinion that there were already too many outlets where alcoholic beverages can be obtained along that stretch of Pacific Coast Highway.
The appellant contends that the basis for denial on the grounds that there are a concentration of too many businesses selling alcohol for off-site consumption is not legal and cannot be implemented by the municipality. Planning staff disagrees.
In May 2007, an application was received by the planning department for a CUP for store use, which included a proposal to sell beer and wine as well as the interior remodel of the existing service station.
At that meeting, commissioners heard from homeowners, attorneys and others who protested the opening of another location for the sale of alcoholic beverages given the proximity of so many other outlets in the immediate area.
A second meeting was no different when some of that same group of critics came back to the commission to show opposition.
Critics have vowed to show up again at the upcoming hearing. “We are going to be there. We are not going to let them get away with this,” one critic said. “We will have another petition.”
The staff carried out a reevaluation of the new CUP application and “determined that onsite conditions, which led the planning commission to the aforementioned conclusion, have not changed since 2007.”
During his presentation before the commission, the applicant’s consultant Don Schmitz said they were willing to accept almost any conditions the commission or the public would want to impose for approval of the permit.
The applicant also unsuccessfully argued the sale of beer and wine “will be an incidental sale item to the nearly 5000 goods currently offered for sale at the market.”

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