Arena naming rights deal draws praise, queries

Convenience store chain would pay $250,000 a year, call it Royal Farms Arena

The city’s plan to award Baltimore Arena naming rights to the Royal Farms chain of convenience stores drew praise Tuesday as a pairing almost as good as Western fries and chicken, though some questioned the need to place another corporate logo on a municipal building.

Under the terms of the agreement, Royal Farms would pay $250,000 annually over five years and rename the venue Royal Farms Arena.

If approved, the deal would roughly triple the amount received by the city for the title sponsorship when it was known as 1st Mariner Arena. That agreement, approved in 2002, netted the city $75,000 a year before it expired at the end of 2012.

“Frankly, I’d rather it be called the Baltimore Arena, but I understand the business model that is always used for arenas and stadiums,” said City Councilman Carl Stokes. “It’s quite a bit more money than the previous deal. It’s a positive move. Others might say they should get more, but my guess is it’s the best price the city could negotiate.”

The arena will help lift the profile of Baltimore-based Royal Farms, said Frank Schilling, the chain’s director of marketing and merchandising. Founded in 1959 and based in Hampden, the chain employs about 4,000 people and has about160 stores in Maryland, Delaware, Pennsylvania and

“It’s quite a bit more money than the previous deal. It’s a positive move. Others might say they should get more, but my guess is it’s the best price the city could negotiate.”

City Councilman Carl Stokes

Virginia.

“We thought that the naming-rights deal was an opportunity for us to expand our branding effort and our brand reach,” said Schilling, adding that the move solidifies the company’s identity as a Baltimorebased business.

The deal does not include the rights to sell food at the arena, which are negotiated under a separate contract, but the businesses will look at other ways to crosspromote, he said.

Kirby Fowler, president of the Downtown Partnership of Baltimore, called the financial terms “a step in the right direction” for the arena, which some community leaders, including the Downtown Partnership, have repeatedly called on to be replaced, saying it is too small and architecturally tired.

“I’m glad they got a better financial deal this time around. That’s encouraging,” Fowler said. “Plus, it’s always positive to have a local business with naming rights to one of our most popular attractions.”

The arena is home to the Baltimore Blast indoor soccer team and is host for numerous events throughout the year, including Ringling Bros. and Barnum & Bailey Circus, basketball tournaments and concerts.

Comptroller Joan M. Pratt, who sits on the city’s Board of Estimates, said she still has many unanswered questions about the agreement with Royal Farms, including how the request for sponsors was advertised and why the city should accept the $250,000 annual payment.

“I’m for naming the arena something because it can generate revenue, but my concern is, what was the process for awarding it to Royal Farms?” she said. “I understand that we’re getting more than we did before, but how do I know that it’s a good deal?”

Royal Farms was approached last year after negotiations with two other companies fell through, according to George Manias, vice president of Legends, the firm that vetted proposals.

Legends assessed the market for naming rights and contacted about 300 Maryland companies, conducting discussions with 10, according to Caron Brace, a spokeswoman for Mayor Stephanie Rawlings-Blake, whose administration finished the negotiations. Royal Farms offered the most annual revenue, she said.

“This is a good win for the city and is comparable in the industry based upon the city’s market conditions,” Brace said.

Edwin F. Hale Sr., the former CEO of First Mariner Bancorp, which previously held the arena naming rights, said Royal Farms is making a smart business decision with a fair price for the rights.

“The price is right,” he said. “The city was trying to get a much higher price, but doing this, at least they get something.”

Donald C. Fry, president of the Greater Baltimore Committee, said the city’s ability to sign Royal Farms as a sponsor is a testament to the manager of the venue.

“I think it’s positive that the arena found a company that was willing to tie its name and brand to it,” Fry said.

Fry said his group, which has proposed a new arena connected to an expanded convention center, is working to find a location and financing.

Fry said he would expect naming rights — likely more expensive ones — to be part of any new deal, even though the Royal Farms agreement offers the company the right of first refusal.

“If we’re successful in getting a new arena, I would think that it’s going to be a world-class facility and that there’s going to be substantial demand associated with that,” he said.

Charles A. Neustadt, who served as the arena’s executive director in 1986 when the Baltimore Civic Center changed its name to the Baltimore Arena, said he opposes selling naming rights, but the practice has become an industry standard.

“It takes away identification with the city,” he said. Still, “this partnership isn’t any different than a partnership with anybody else.”

“Are there classier names than Royal Farms? Probably. Are there less classy names? Probably,” he said. “If you look at stadium names, they’re all over the place.”