Amending Agreement – Gray Beverage Inc.

Recommendation:
  1. That approval be given to enter into an amending Agreement with Gray Beverage Inc. in accordance with the terms and conditions as outlined in Attachment 1.
  2. That the agreement be acceptable in form to the Corporate Services Department (Law Branch) and in content to the General Manager of Community Services.

Report Summary

  • This report requests permission to amend the Agreement with Gray Beverage to accommodate the bidding on, and the potential hosting of, several championship sporting events. These events all require venues that are unencumbered by exclusive supply agreements.

Report

  • To host several upcoming major sporting events, as listed in Attachment 1, the organizations hosting and /or bidding on these events require an exemption to the current agreement with Gray Beverage Inc. All of the competition venues for these events are included as part of the existing exclusive supply agreement with Gray Beverage.
  • Gray Beverage Inc. has agreed to waive its rights for the swimming and triathlon events as specified in Attachment 1.
  • If the 2001 International Amateur Athletics Federation World Championships are awarded to the Edmonton, Gray Beverage has agreed to waive its rights of exclusivity under the Agreement for the 2001 World Track and Field Games and to amend the existing agreement based on the conditions outlined in Attachment 1.

Budget / Financial Implications

  • $230,000 potential revenue lost as a result of amending the current Agreement and granting a one year extension (from Dec. 31, 2003 to Dec. 31, 2004) to Gray Beverage with no fees payable to the City of Edmonton, and granting Gray Beverage beverage exclusivity in City of Edmonton venues from December 31, 1999 to the conclusion of the Amending Agreement.

Legal Implications

  • An Agreement between the City of Edmonton and Gray Beverage Inc. has been drafted detailing the required amendments. This Agreement has been drafted by the Law Branch, Corporate Services Department and may be amended by the General Manager of Community Services as may be required to carry out the recommendation.

Justification of Recommendation

  • Each of the organizations bidding on the events listed in Attachment 1 have indicated the need for a site free of exclusive supply agreements. Corporate sponsorships will represent an important component of their overall budgets and all revenue streams must be available to the host organizations in order to hold such events.

Background Information Attached

  1. Terms and Conditions

(Page 1 of 2)

Attachment 1

Terms and Conditions

1.Gray shall waive its rights of exclusivity under the existing Agreement for the following events:

a)the ITU world Championships in the year 2001 (World Triathlon Championships) (William Hawrelak Park);

b)the 1998 Sprint Triathlon, the 1999 Provincial Triathlon Championships and the 2000 National Triathlon Championships (William Hawrelak Park);

c)the 2002 World Swimming Championships Short Course (Kinsmen Sport Centre) and

d)the Swimming World Cup events to be held in 1998, 1999, 2000 and 2001 (Kinsmen Sports Centre).

2.In the event that prior to December 31, 1999 the Edmonton World Track and Field Games Foundation is successful in having its bid accepted by the International Amateur Athletics Federation for the 2001 World Track and Field Games, together with all associated events, (the "2001 World Games"), or should either Gray Beverage Inc. or Pepsi-cola Canada Limited. not become an official sponsor or a permitted supplier of beverages during the 2001 World Games, then:

a) Gray shall waive its rights of exclusivity under the Agreement for the 2001 World Games.

b)The Agreement shall be amended to provide for the following:

i. the current term of the Agreement shall be extended for a further period of One (1) year, with no fees payable to the City;

ii.from and after December 31, 1999, the right of exclusivity under the Agreement shall include all bottled, canned or cartooned juices, iced teas, water and isotonics in venues which are currently services by third party operators, once these contracts have expired;

iii.the term "Venues" as defined in the Agreement shall be amended to include any sports or recreation facilities which, subsequent to December 31, 1999 the City shall construct or cause to be constructed on City-owned land and to which the City shall have entered into lease agreements with third parties for the operation thereof.

Attachment 1 - Page 1 of Error! Bookmark not defined.