Coke wants to be official Oakland drink City offered $6 million, 10-year deal

Janine DeFao / SF Chronicle 9may01

New Police Car City of Oakland, California ... well, OK, it could be.

Coke, which bills itself as the world's favorite soft drink, wants to be the only one for the City of Oakland.

The Atlanta soda giant is offering Oakland more than $6 million over 10 years to become its official soft drink, making Coca-Cola Co. products the only ones sold in city buildings, including its 22 recreation centers.

But Parks and Recreation Director Harry Edwards, an architect of the deal, says it differs significantly from the Pepsi plan shot down by the Oakland schools last fall over concerns about commercialism and promoting unhealthy eating habits.

In particular, places frequented by kids such as recreation centers and libraries would sell only noncarbonated, uncaffeinated drinks -- such as Powerade and fruit juices -- while other city buildings such as fire stations would get the "Real Thing."

"We need to expand our funding base as much as we possibly can," said Edwards.

But the City Council's life enrichment committee was unconvinced yesterday, with members saying they had unanswered questions and sending the proposal without a recommendation to the full council for a vote in two weeks.

"I'm intrigued," said Councilwoman Jane Brunner. "But I want to do a financial analysis that we're getting our money's worth."

If the $6.2 million deal is approved, Oakland would join a growing number of cities across the state and nation -- from Sacramento to Chicago -- that have similar agreements with Coca-Cola or Pepsi. While a number of Bay Area school districts also have cut such deals, Oakland may become the region's first city with an official soft drink.

Edwards said the agreement was unprecedented, however, in Coca-Cola's agreement to keep soda out of some machines. In March, Coke agreed to scale back its advertising in schools with which it has agreements and to add water and juices to its school vending machines, following health studies that showed soda contributes to childhood obesity.

But the safeguards in the Oakland plan are not enough for Andrew Hagelshaw, executive director of the Oakland's Center for Commercial-Free Public Education, which has successfully fought soft drink contracts in schools in Oakland, Berkeley and beyond.

Even if soda is not available in recreation center machines, it still would be advertised, with the added force of a city endorsement, he said.

"Coke and Pepsi are terrified they're losing their school market," Hagelshaw said. "They're desperate to hold onto that captive young audience. If they can't get into the Oakland schools, why not Head Start centers and libraries?"

But Edwards argued that the money from the deal would help fix up playing fields and ball courts and help the Parks Department expand its youth programs.

Under the terms of the contract, the city would get a 45 percent commission on vending machine sales, projected at $5.2 million over 10 years. Coca-Cola also would contribute more than $1 million in goods and services, including new scoreboards and backboards -- which would carry Coke advertising -- and sporting equipment.

Coca-Cola also would provide two sport utility vehicles and hire Oakland youth for "Street Teams" that would promote parks programs and, most likely, Coke products.

"I'm not comfortable with the thought of Coke going out into the neighborhoods advertising with our blessing," said Councilwoman Nancy Nadel.

But Edwards assured that the advertising dimension would be minimal and that the city would have to approve any signage or other advertising used.

"The concerns about commercialism have some basis," he later said, "but the reality is that we live in a commercial world."

E-mail Janine DeFao at jdefao@sfchronicle.com