Huntington Beach’s City Council has signed onto a long-term agreement with the operators of the Pacific Airshow, promising to subsidize the event in the expectation it will generate more revenue for the city than the city will give.
Code Four, the air show’s operators, and the city reached a settlement agreement in 2023 that paid the Pacific Airshow $4.9 million for losses from the cancellation of the event’s last day because of the 2021 oil spill and spelled out starting terms for negotiating a long-term deal.
City staff presented that deal, along with a report on the event’s environmental impacts, for the City Council to approve this week.
The agreement gives exclusive rights to host an annual air show in Huntington Beach for 10 years, with options that could extend it to up to 25 years.
Pacific Airshow will no longer have to pay permitting costs or fees for extra police, fire, marine and other city personnel needed for the event.
City Manager Travis Hopkins estimated the city will spend at least $253,000 this year on public safety services for the event. Hopkins added that the settlement agreement called for a 40-year contract, but the city negotiated it to a maximum of 25 years.
The city will spend more than $1 million on the environmental impact report and will pay for biologists annually to monitor local wildlife that might be affected by the event. Those were requirements the California Coastal Commission placed on the air show last month.
“The air show, being the largest event here in Huntington Beach, is very significant,” Councilmember Gracey Van Der Mark said. “If we were to lose it, we would lose more money than what we are actually offering the air show.”
The deal approved Tuesday also cements lucrative rights to monetize 3,000 city-owned parking spaces along the coast. The Pacific Airshow’s operators will keep all the parking revenue through 2030 generated during the event. The Coastal Comission has capped parking fees at $50 per space.
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After that, the city will get $10 per parking space and $100 per camping space, both rising with the consumer price index.
The vote to approve the deal and environmental impact report was 6-1.
Councilmember Chad Williams was the only no vote. He said he loved the air show, but the city was moving too fast to approve a long-term deal when there is uncertainty on the exact financial benefit the air show provides.
Williams said he found suspect a study commissioned by Visit Huntington Beach examining the 2022 air show’s economic impact. The study said 690,00 people attended the event and it brought a direct economic impact of $70 million.
“When I look at these numbers from Destination Analysis, and I really roll up my sleeves and do a cost analysis to figure out if these numbers are accurate, I hate to say it, but I just don’t see it,” Williams said. “In fact, when I do my research, I find quite the contrary.”
By Williams’ calculations, the air show deal gives the event operator tens of millions of dollars in revenues over the life of the deal. He said the city should do an audit to figure out how much sales tax, hotel tax and other revenues the city is actually getting for hosting the event.
He said one major hotel near the beach saw only a $20,000 increase in room sales during the air show, and another saw a $50,000 increase.
He asked that the council approve just a one-year deal and come back to negotiate a full 25-year contract once more clear economic numbers were studied and litigation surrounding the air show settlement was resolved.
That failed in a 2-5 vote, with only Williams and Councilmember Butch Twining in favor.
“I seriously love the air show,” Williams said. “I’m sad that I probably won’t be able to show my face on the beach at the air show after pointing these things out.”
The three-day event runs from Oct. 3 to 5 this year.
Councilmember Don Kennedy defended the city subsidizing the Pacific Airshow, saying it is commonly done by other cities hosting other air shows or for other marquee events such as the LA Marathon.
“(Cities) subsidize promoters and events to bring the commerce, bring the people,” Kennedy said. “That’s what cities do.”