New York agency plans ‘appropriate legal action’ to enforce agreement with Chattanooga

Screen capture / Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, appeared in a video announcing "a new program we are launching with our partners at CGI Digital that will help tell Chattanooga's story across the country." The program has been discontinued and the video removed from the city website.
Screen capture / Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, appeared in a video announcing "a new program we are launching with our partners at CGI Digital that will help tell Chattanooga's story across the country." The program has been discontinued and the video removed from the city website.

A New York marketing agency intends to "take appropriate legal action" to enforce an agreement with the city of Chattanooga allowing the company to produce videos publicizing local businesses on the city website, the company told a local client.

The mayor's office canceled the deal over concerns about how the company characterized the city's involvement in its sales pitches.

"We have already done a lot of the work in producing the videos and providing services for the city and our business clients," CGI Digital's president of sales, Robert Forys, said in a letter sent to a local client, the Mark Hite Team, on Friday. "We will fight to continue the program. In the meantime, we will be working with outside counsel to take appropriate legal action to enforce our agreement with the city."

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Through its partnership with the U.S. Conference of Mayors and the National League of Cities, the city recently engaged CGI Digital, of Rochester, to produce videos related to Mayor Tim Kelly's One Chattanooga vision for city unity.

Under an arrangement used in other cities as well, CGI was offering free video services to the city while soliciting local businesses to pay for them -- invoking the city partnership in its solicitations.

"The city of Chattanooga thought you would be a great fit for this upcoming project," a CGI Digital salesperson said in an emailed pitch obtained by the Chattanooga Times Free Press.

Attached to that message was a letter signed by Ellis Smith, the director of special projects in Mayor Tim Kelly's office, which Smith said he provided to confirm the city's participation.

"We encourage you to consider being a part of this initiative if it fits your needs," Smith said in the letter.

Smith said the city did not suggest specific businesses for the company to contact.

After receiving a copy of the sales pitch from the newspaper, Smith said he asked the city attorney to cancel Chattanooga's agreement with CGI Digital.

"While we're generally happy for vendors and partners to tell others that they are working with the city, it is not appropriate for any vendor's representatives to misrepresent or distort that relationship in an attempt to gain traction with potential customers," Smith told the newspaper early last week.

City Attorney Phil Noblett sent formal notice of the cancellation to CGI Digital on Wednesday, stating in the lettter that the city demanded that the company stop developing videos for the city.

"During the last several days, the city has been made aware of conduct by representatives of CGI Digital that is concerning," Noblett wrote. "These representatives misrepresented the relationship between the city and CGI Digital as leverage and inducement to third parties to contract with CGI Digital. The city alleges this conduct has damaged its reputation and character."

Citing Forys' reference to legal action, Noblett said in an email Monday that the city has no further comment at this time.

Nicole Rongo, CGI Digital's vice president of government relations and strategic partnerships, said in a statement last week that "a sales representative presented the program to local businesses with unwarranted zeal, excitement and sales puffery."

"In the process, the fact that CGI Digital was working with the city might have caused some businesses to feel pressured to participate in the program," Rongo said.

Rongo apologized to Kelly's administration in her statement and said the company is using the experience "as a 'teaching moment' in our training of all present and future sales personnel."

Representatives for CGI Digital did not respond Monday to further requests for information about the company's plans.

The company has worked with cities, counties, chambers of commerce, nonprofit civic organizations and other community organizations for more than 30 years, Forys' message to Hite said.

"We have 300 employees working with our clients nationwide to continue our quest to enable local 'Main Street' businesses to compete with online enterprises and international franchises," Forys wrote.

In November, a representative from CGI Digital said in a message to Cempa Community Care, another participating organization, that the video tour would follow the same format as a project the company completed for Morgantown, West Virginia, that is accessible through its municipal website.

The project features a series of short videos covering topics like health care, economic development and community organizations. Depending on the topic visitors select, different logos will pop up providing the opportunity to watch a video about a Morgantown-area organization or click a link back to that organization's website.

In the same November message, the CGI Digital broke down the different participation levels available to local businesses, which range from platinum to bronze.

The platinum package would include the organization's logo on seven city video topics and would include the option of a two-minute high-definition aerial video, two 60-second videos or four 30-second videos.

The video would be streamed on the city website. With a $3,000 nonprofit discount, the cost would be $9,000 or $8,000.

In the bronze package, the organization's logo would be placed in the city's video tour with a direct link to their website. With a $500 nonprofit discount, it would cost $2,000 or $1,500.

The city of Chattanooga receives close to 20,000 unique visitors on its website per week, the message said.

The Grace Frank Group, a Chattanooga real estate agency, was among the local businesses that hired CGI Digital.

In a phone call Monday, the firm's principal, Grace Frank, said she has been pleased with the work done by CGI Digital, which is providing search engine optimization for the agency and completed a video for the Grace Frank Group.

The cost for the whole year was less than $12,000, she said, and overall, Frank felt the prices were affordable and fair for small businesses. In contrast, Frank said, other companies have quoted her prices for search engine optimization alone in the range of $2,000 a month.

Frank said she never received the impression that the city had recommended Grace Frank Group to the company, and she did not feel pressured to participate.

"I never sensed that they were saying to me, 'The city wants you to be on this website,'" she said.

Contact David Floyd at dfloyd@timesfreepress.com or at 423-757-6249.