Ocean City says it's official: Coke is it.

The town council voted Monday night to sign a million-dollar marketing deal with the soft-drink giant making Coke the resort's official drink.

The deal will bring the town $1.1 million over the next five years in cash and in-kind advertising with Coke.

It also puts the tiny beach town in the forefront of a new municipal trend: sponsorship deals that swell government coffers without swelling taxes.

Buffalo, N.Y., has an official paint -- Pratt and Lambert. Atlanta has an official credit card -- VISA. The Los Angeles County beaches have an official bottled water -- Naya.

Now Ocean City has an official soft drink (the unofficial beverage of choice for thirsty vacationers is likely to stay the same -- beer.)

"I think it's terrific -- it's the real thing, as they say," said a jubilant Mayor Jim Mathias. "I think it's smart business -- the turn-of-the-century way to finance government. We're blazing a path, and we know it's going to lead us to success."

The final terms of the arrangement will be negotiated through a Coke distributor in Salisbury, Mid-Atlantic Coca-Cola.

The City Council vote established an enabling ordinance so the town could sign a contract, Mathias said. He expects the signed contract to bring the town $120,000 a year in cash and $97,000 a year through Coke advertising that features the resort.

The arrangement will mean that only Coca-Cola products will be sold at city-sponsored events such as SunFest and SpringFest, and vending machines at the golf course and other city properties will carry only Coke products, according to city officials.

"It's kind of unique," said Greg Newman, branch manager of the Salisbury distributor. "The sky's the limit, really."

Scott Jacobson, a spokesman for Coca-Cola in Atlanta, said he was not familiar with the terms of the proposed arrangement. Although the soft-drink manufacturer is the official drink of many sports teams (including the Orioles, which signed a new 10-year deal with Coke last week), arenas, movie theaters and even one mountain (Vail), he said he knew of no other town that had adopted it as the official beverage.

"The closest thing to it might be that we are the official soft drink of the New York State Parks," Jacobson said. "If there is any other example [of a deal with a municipality], it's certainly not common. We're always looking at new ways -- this falls into that category."

The deal has been supported by six of Ocean City's seven council members, and the enabling legislation passed on 6-1 vote.

Nay voter Vince Gisriel has opposed it since Ocean City first began discussions about the sponsorship two years ago. Gisriel said yesterday he thought it was inappropriate and ill-advised for the city to engage in such franchise activity without going through the competitive bidding process.

"Not only are we restricting free trade and not taking advantage of the competitive bidding process, we are now negotiating prices with Coca-Cola and making all vendors buy through the city at much higher rates," he said. "If you're a vendor [at city events] you've got to serve only Coca-Cola products."

Coke's largest competitor, Pepsi-Cola Inc., is not happy with the deal, Gisriel said: "Pepsi didn't feel it was a level playing field."

Gisriel also expressed concern about the precedent such a deal could set.

"What is next, only one kind of candy bar to be sold on city property? Will we next have the official cereal of Ocean City, or the official athletic shoe?" he said.

Supporters such as Mathias dismiss such objections. Corporate sponsorship has long been a fact of life in festivals and athletic events, Mathias said. It makes good sense for a municipality like Ocean City to have sponsors, too, Mathias said -- as long as they're tasteful and appropriate ones.

"This doesn't mean we're going to succumb to every promotion that comes down the line," Mathias said. Coke, he said, is a natural for the town that has 7,500 full-time residents and 400,000 visitors on most busy summer weekends.

Before agreeing to make Coke its official drink, Ocean City had also talked to Pepsi, said council member Nancy Howard. She said the deal offered by Pepsi was not as financially lucrative for the town as the Coke proposal.

"We had a company looking at sponsors for us, and they had contacted Pepsi. They brought us a contract for $50,000," Howard said. Around the same time, she said, Coca-Cola representatives contacted Ocean City with a better offer.

A marketing group that monitors sponsorships across the country said such city-corporate agreements are still relatively rare. Chicago-based IEG, which publishes sponsorship reports annually, said such arrangements as Buffalo's "official" paint and Atlanta's credit card have turned up in the past five years.

But Jim Andrews of IEG said he knew of no other instance where a town had an official soft drink.

"It does sound unusual," he said.

Pub Date: 4/23/97

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