Huntington Beach leaders are discussing a new deal with the operators of the Pacific Airshow, guaranteeing they can host an annual music festival, airshow and boat race to Catalina Island for 25 years while taxpayers pay the lionshare of the fees for the company.
The agreement comes two years after city council members signed off on a controversial settlement with the airshow’s operator, paying them at least $5 million and guaranteeing a series of other perks that city leaders hid before they were ordered by a judge to reveal all the terms publicly.
[Read: HB Leaders Give Up Thousands of Public Parking Spots to Airshow Operators, Settlement Shows]
The settlement put the airshow at the center of Surf City politics for years, highlighting questions around Code Four CEO Kevin Elliott, who also heads the Pacific Airshow LLC and routes all its work to Code Four.
After city leaders told Elliott in 2022 they were done subsidizing the airshow, he sued the city and endorsed a slate of candidates running for office who made one of their first orders of business settling the lawsuit with him after getting elected.
[Read: How Did a Huntington Beach Air Show Become Embroiled in Controversy and Politics?]
Six of the seven current city council members paid Code Four to print campaign materials for them according to campaign finance disclosures, spending at least $90,000 collectively since 2022 between their campaign accounts and a ballot measure account controlled by Councilman Chad Williams.
Councilman Andrew Gruel, the only council member not to disclose any connection with Code Four, was unanimously appointed earlier this year by his colleagues and did not have to campaign.
Now, those same city council members are tasked with reviewing Elliott’s final deal with the city.
How Much Money Does the City Make?
City Council members have defended the airshow as a local jewel for years, claiming the event brings in as much as $120 million annually.
But a Voice of OC review found the authors of the report that city council members and business leaders cited weren’t able to explain how they arrived at those numbers.
Read: How Much Money Does the Pacific Airshow Bring to Huntington Beach?
While the city used to receive money directly from parking fees, they won’t over the next five years under the new contract.
Starting in 2030, the city will earn $10 per regular parking spot and $100 per RV spot.
Taxpayers are also on the hook for a litany of other fees the airshow will no longer cover, including the environmental impact report for the event.
“City shall waive and not require Pacific Airshow to pay City fees and costs (including but not limited to all public safety fees [marine, safety, police, fire, etc.] application fees, permit fees, beach maintenance fees, setup & takedown fees, banner placement fees, public works, electrician/electrical, and restroom maintenance/cleaning fees, road and street closure fees, pollution prevention fees, etc.)”
The airshow will also have the power to “transfer” the deal to another operator with the city’s blessing at any point in the 25 year term.
What’s In the Airshow Proposal?
Most of the terms come from the secret sections of the airshow’s settlement with the city, which was negotiated behind closed doors between city council members, then-city Attorney Michael Gates and Code Four’s lawyers.
Gates also said that city council members won’t have the power to change any of the terms that came out of the settlement without Code Four’s approval in a July 2024 interview.
“If the city council got heartburn over one of those things … they’d work with the airshow to make adjustments to it,” Gates said.
While the contract notes a “negotiation process” between the city and the airshow where they agreed to “relinquish some of the benefits guaranteed,” most of the original terms are still there.
The airshow has a guaranteed contract of 10 years, with options for three five year extensions, bringing the total contract’s lifespan to 25 years, and guaranteed a right to a “boat-race around Catalina Island, on-sand entertainment, music, and other entertainment.”
The contract also guarantees the airshow a right to host a “multiday music festival,” a long time goal for the event.
They also receive all the public parking spots along the coast between Seventh Street and Beach Boulevard, along with the Main Street parking garage, Pier Plaza and amphitheater parking.
City leaders are also set to agree to legally defend the airshow from any environmental compliance around the environmental impact report, but noted they will not pay damages if the operators lose the lawsuit.
“The City will indemnify, hold harmless, and defend Pacific Airshow from any claims, suits, damages, or costs (including attorney’s fees) to third parties arising out of or in connection with CEQA compliance caused, or undertaken by city.”
Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.