Two years ago, Huntington Beach officials publicly told Pacific Airshow operators they were done subsidizing them.
The time had come for the private operation to stand on its own.
Eight months later, a new city council majority – who campaigned on saving the air show – signed a settlement agreement stemming from the 2021 oil spill that closed the show for one day.
They also significantly expanded the subsidies, but kept most of the details hidden.
Until now.
Surf City officials handed over thousands of public parking spots to the Pacific Airshow operator and gave the company exclusive rights to the event for 40 years – along with a $5 million payout.
[Read: HB Leaders Give Up Thousands of Public Parking Spots to Airshow Operators, Settlement Shows]
The settlement, which was released Wednesday after a public records lawsuit, serves as a foundation for future contracts, according to City Attorney Michael Gates.
Before that, the air show operated on a special event permit that had to be renewed every year, along with numerous fees for public safety, permits and a host of others – all of which are now waived under the newly released settlement.
Since the public release of the settlement, questions have mounted.
Three council members who opposed the deal are now calling for California Attorney General Rob Bonta to investigate the settlement after state auditors announced they’re probing the matter.
Is the Settlement a Contract?
In a Thursday morning phone call, Gates argued that the “goodies” given to Pacific Airshow LLC couldn’t be enforced until they had a contract with the city, but admitted city council members can’t throw out those terms now that they’re in the settlement agreement.
“If the city council got heartburn over one of those things … they’d work with the airshow to make adjustments to it,” Gates said.
Residents wouldn’t have seen the contentious settlement agreement without Ocean View School District Trustee Gina Clayton-Tarvin, who sued Surf City, demanding officials release the documents under the California Public Record Act.
“This settlement documentation isn’t about me – it belongs to the people, it’s a public document and I said – anybody who wants it, I will be sharing it with them,” Clayton-Tarvin said in a Thursday phone interview.
She heavily criticized the settlement.
“When you’re a fiduciary of public trust, public land, public space, you simply must protect the public’s interest. And what they’ve done instead is monetize public land for personnel gain of a private corporation. That is the epitome of corruption. That is the epitome of gifts of public resources” Clayton-Tarvin said.
Currently, Kevin Elliott’s company Pacific Airshow LLC has no contract with the city and has not pulled permits to host the 2024 Pacific Airshow, but Gates said he believed they’d pull a permit soon.
In a Thursday interview, Elliott said he hoped to set up a contract with the city and keep the airshow in Huntington Beach for years to come.
“We’d love to have a long term agreement,” he said. “We’d love to keep this great event in Southern California.”
Elliott declined to comment on how much it costs to operate the airshow each year, saying he couldn’t speak due to ongoing litigation against former Councilwoman Kim Carr and Amplify Energy, the company behind the oil spill.
Councilwoman Rhonda Bolton, who practiced law in Virginia and Washington D.C., said the agreement is usually not how legal settlements look.
“It is an unusual set of circumstances – at least based on my observations and 25 years of legal practice about half of which was spent in litigation,” Bolton said in a Friday phone interview. “So basically an event, a long term arrangement to do events using public property – this is usually not done in the context of settlement negotiations.”
Bolton also said the city should’ve fought the legal claim, noting Carr was able to get the initial complaint against her thrown out.
“Not only did we agree to pay massive amounts of money for a one day closure of the air show, we did this based on a bogus legal claim because the legal claim had been dismissed,” Bolton said.
Councilmembers Argue If Deal Was Illegal
Mayor Gracey Van Der Mark and Huntington Beach Councilman Tony Strickland both defended the deal.
In a Thursday phone interview, Strickland called it “the best thing I’ve done” when he was mayor.
“It’s worth it because it benefits us more to have the airshow here than to not have it,” Van Der Mark said in a Thursday phone interview, calling critics of the deal on the city council “unethical” and questioning why they waited until now to call for an investigation.
“They’re using lawfare, causing turmoil and division in our community. I find that sickening,” she said. “Now they’re trying to have us investigated right when they’re up for reelection because they’re up for reelection.”
Councilwoman Natalie Moser pushed back against the mayor’s claims.
“As far as the mayor saying this is political – no. We have been screaming from the rafters since this has happened,” Moser said in a Thursday phone interview. “Tony takes full credit that it was their leadership that saved the air show. They ran on that – that’s political.”
She added, “When I took the vote in closed session and I voted no. I also said this is criminal.”
Councilman Dan Kalmick said the council majority gave the Pacific Airshow too much.
“How do you agree to all of this stuff in closed session in order to settle one day of an air show?” Kalmick said in a Thursday phone interview.
He lambasted the giveaways of parking spaces and the weaving of numerous fees.
“The airshow used to generate a nontrivial amount of money for the city – it wasn’t zero and it wasn’t $10 million. Now we don’t get any money – now it’s indirect, like sales tax,” Kalmick said. “It’s not good for the city of Huntington Beach. I feel like we all got scammed.”
Strickland and Van Der Mark both pointed to an economic impact report that claimed the event generates over $100 million in local impact, but that report has faced questions after a Voice of OC investigation found the authors of the report couldn’t explain their math.
[Read: How Much Money Does the Pacific Airshow Bring to Huntington Beach?]
Kalmick criticized the economic impact report.
“They’re basing their entire economic model off a marketing report,” he said.
Operator Sues City, Endorses New Slate of Council Candidates
In September 2022, city leaders voted 6-1 to cut off subsidies for the air show, noting they previously said it wasn’t permanent assistance.
“It feels like Groundhog Day here,” said then Democrat Councilwoman Kim Carr. “We’ve had this conversation over and over and over again that we want him to be successful and we’ve done our part, but there has to be a point where you get out of the nest and learn how to fly.”
“I can’t support this anymore,” she continued. “I don’t think government should be subsidizing a private business in this way.”
Then-Councilman Mike Posey, a Republican, also told them it was long past time for the event to stand on its own.
“The only private business that we underwrite by charging more for parking to offset public safety is the airshow, and it was my belief and understanding that 2019 was the last time we were going to do it,” he said.
Bolton also pointed out those meetings, highlighting how there were at least two Republicans who came out against moving forward with long term subsidies in 2019 and 2022.
“It’s definitely a nonpartisan issue,” Bolton said. “You will find that Gates and the Four will always politicize things.”
Just under two months later, with campaign season underway, Elliott sued the city, arguing that council members violated his contract by “unilaterally and improperly cancelling the airshow.”
Elliott said he waited a year to sue the city after the oil spill because he didn’t want to move forward with legal action, but no one from the city would engage with him.
“It was the absolute last thing I ever wanted to do,” Elliott told Voice of OC. “I tried in vain to resolve the situation. I was born and raised in Huntington Beach, this is my hometown. You think anybody in their right mind wants to sue their hometown?”
During that time, Elliot publicly endorsed a slate of four candidates – Strickland, Van Der Mark, Casey McKeon and Pat Burns, all of whom would go on to win seats on the city council.
He posted on Facebook multiple times in support of those candidates and appeared in numerous photos with them, while Code Four received over $4,300 combined from Strickland, Van Der Mark, Burns and McKeon for producing campaign banners.
[Read: Surf City’s Settlement With Air Show Operator Raises Transparency, Ethics Concerns]
He also attended their inauguration, standing next to them as they took their oaths of office.
Elliott denied having any preexisting relationships with council members before they campaigned on saving the air show, noting he didn’t contribute to any of their campaigns.
“I was the least politically inclined person you could ever meet. I just happen to be a kid who grew up in Huntington Beach and liked airplanes,” Elliott said in the Thursday phone interview.
“These four council members – who I didn’t know – were campaigning on saving the airshow. Their interests are aligned with my interests, which are to protect my business,” he added.
When asked about the banners, Elliott said he doesn’t “vet the political orientation” of customers, but admitted it was the only time his company has printed material for a political campaign.
“Had we been asked by someone else to print graphics for them we would’ve done that just the same,” Elliott said. “Unfortunately, the event did become politicized as a result of that campaign to an extent. It became more of a political lightning rod than it should’ve been.”
Today, the settlement agreement on the show has become a lightning rod of its own.
Councilwoman Moser is publicly slamming it as a politically motivated deal.
“This looks like corruption to me … It doesn’t smell right,” Moser said. “This was a lawsuit that was settled prematurely for the cancellation of one day of an event for untold millions of dollars of public funds without any proof of damages. We never saw any detailed damages – ever.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
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