Huntington Beach leaders are workshopping a plan to overhaul the city’s sports complex, but there are some questions over how long it will take until it generates tax revenue in the face of a deficit.
The push comes as Surf City leaders are on the hunt for ways to boost revenue, like selling ads on the beach, as they grapple with a $15.6 million structural budget shortfall this year, one of many Orange County cities struggling to balance the municipal books.
Read: How Rocky Are Orange County’s Municipal Budgets?
City leaders say one of the next steps to bring in more visitors and money is to renovate the Huntington Beach Sports Complex off of Goldenwest Street and Talbert Avenue.
Officials are considering putting turf on the fields and building indoor, high-tech batting cages and training facilities.
“This is one of our biggest assets that we own that we really want to get right,” said Mayor Casey McKeon at the council’s July 7 meeting. “There’s no reason why our sports complex shouldn’t be the best in California, the country.”
While council members all agreed the idea needed more work, some council members questioned whether it was worth moving forward amid questions over how much money the city could make.
Under the current deal, the complex’s profits are split with 84% going to Huntington Beach Sports Complex Partners, their contractor who manages the complex, and the remaining 16% going to the city.
They’re the same contractors who also faced pushback last year for a proposal to sell alcohol at the park next to playgrounds, which was approved by city leaders but has not yet been implemented.
[Read: Huntington Beach Greenlights Booze Sales Next to Playground]
To finance the renovations, the contractor is asking the city to kick in over $14 million to help pay for the improvements and give up some of their revenue from the facility, with the contractor taking in 85% of the profit and 15% going to the city under the new proposal.
The city would also be paying roughly another $1 million on replacing the existing lighting system with LED lights, which they’re already in the process of doing, and more than double their costs for landscaping to increase the quality of the fields.
Officials plan to finance the rest of the deal through private partners that would cover roughly $4 million, and claimed the deal would net the city roughly $745,000 a year.
Much of the presentation at Tuesday’s council meeting was laid out by the contractor, not city staff.
But Councilmen Chad Williams and Andrew Gruel questioned how much money the city would really be making, with Williams highlighting the city’s other expenses at the site and Gruel pointing out their initial investment wouldn’t be paid back over the 20 years of revenue.
“The money we invest increases the revenue and we’re still at negative on what we otherwise would invest,” Gruel said. “The money that’s coming back to the city and going back into the capital program is still net negative.”
Williams also highlighted a series of concerns with the project, asking for the finance commission to take another look before anyone moves forward.
“I’m looking for transparency,” Williams said. “I might seem like a stickler right now, and I’m hearing some murmuring to my right, but this is a massive investment … lets take our time and be thoughtful about it.”
Councilwoman Gracey Van Der Mark also raised concerns about replacing more of the grass with turf, highlighting concerns over the health impact to kids playing on it.
“My concern is always the same,” Van Der Mark said. “I’m not willing to put kids at risk.”
Mayor Casey McKeon and Councilmen Butch Twining and Don Kennedy defended the project, with McKeon highlighting how the city could make additional money from people spending at areas around the sports complex.
“When you have a great facility, which it will become, you’re going to attract tournaments from all over the country,” Kennedy said. “If somebody is going to help me make a bunch of money, I have to give some back, and what I give back helps me improve my own asset, I don’t really look at that as an investment.”
Council members ultimately agreed to discuss the issue again in August and directed the finance commission to examine the proposed deal as well before then.
“I’m pretty confident there’s a way to dig in on the model, I think they’re selling short their revenue projections,” McKeon said. “Let’s keep this ball moving forward.”
Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.
