The city-owned DoubleTree by Hilton at the U.S. Cellular Center has secured a $1.5 million naming-rights deal for beer sales over 10 years to go along with its $3.8-million naming-rights deal with U.S. Cellular for the complex’s arena and convention center.
John Frew, manager for the hotel and event complex construction projects, on Monday called the naming rights deal for the "official beer and energy drink provider" at the facility both "good news and significant news for the city."
Good news, he said, because the city’s naming-rights agreement is with a local beer distributor group, 7G Distributing LLC of Cedar Rapids, and significant news because the deal fulfills projections that city leaders and Frew have built into the hotel and event center construction and operating budgets for the years ahead.
"So the system we’ve put in place is working," Frew said. "We are fulfilling what the critics said couldn’t be done. ... These are the kinds of things you really have to put in place in order to succeed financially. And we’re getting there."
The City Council is slated to vote the agreement at its Tuesday meeting.
Most major arenas nationwide secure naming-rights agreements with beer distributors, with 80 percent of them either with Budweiser distributors or Coors distributors, Frew said. 7G Distributing distributes Budweiser products.
The agreement, Frew said, will put the name "Bud Light Lounge" on a new 3,000 square-foot VIP Arena Club that will be situated behind the hotel’s new first-floor lobby and underneath the stands in the renovated arena attached to the hotel.
"This is one we’ve been looking for for a long time," Frew, CEO of Frew Development Group, said of the naming-rights agreement for beer sales. He said naming-rights arrangements also will be coming with a soft-drink providers, banks and other entities. Such sizable agreements weren’t in place at the city’s arena in the past, he said.
U.S. Cellular previously had paid $150,000 a year to put its name on the arena, an amount that now will average $380,000 a year over 10 years.
"This is a different ballgame," Frew said. "This is one where you’re going to see a lot of sponsorships in the building in a way they never had before.
"This is what a modern building does. It sells tickets, it sells sponsorships, it sells space to generate revenue. Before that, they didn’t really have that opportunity to do that. It just wasn’t a building that lent itself to those kind of advertisers. This one does."
Like the U.S. Cellular naming-rights agreement, the beer agreement is for seven years with an option for three additional years.
7G Distributing will pay $135,000 into the hotel and event center budget the first year, beginning July 1, 2013. The annual payment increases over time, reaching $176,144 in the tenth year, according to the agreement.Frew said the hotel and event center projects are moving ahead. The complex, with renovated hotel and arena and new convention center next door, is slated to open in June 2013.