Huntington Beach residents could soon have a very frank conversation with city leaders over how much of their money goes to support local businesses after council members unanimously called for an in-depth review of all their subsidies.
The discussion started with a focus on the Pacific Airshow, which has faced questions after city leaders revealed a previously confidential settlement agreement with the event’s operators that offered guarantees of public parking spaces and a 40 year exclusive deal if they entered a contract with the city.
[Read: How Did a Huntington Beach Air Show Become Embroiled in Controversy and Politics?]
That deal is now being reviewed by state auditors amidst questions over whether or not it was an illegal gift of public funds, as the state’s Coastal Commission also questions the event’s lack of permits.
In an unprecedented action, council members waived legal privilege to discuss the deal candidly on Tuesday night, with the council majority who negotiated the deal claiming they fought hard to negotiate a good deal for the city.
“It is, as mayor, one of my accomplishments that we did save the airshow,” said former mayor, now Councilman Tony Strickland. “It’s a net positive for the city.”
That prompted Councilman Dan Kalmick to publicly reference a demand letter the airshow operators had sent in at the start of negotiations highlighting how it wasn’t much different from the deal granted by the city.
”You talked about a hard fought negotiation,” Kalmick said. “The delta is pretty negligible.”
Council members on both sides of the argument repeatedly called the other side liars throughout the evening, with a long debate on how to measure what actual economic benefits the airshow brings to town and what money the city could be giving up.
“When I’ve asked questions about the total value of this agreement, I have never gotten an answer,” said Councilwoman Rhonda Bolton. “What is the value of all of this if you add it up? We want to know what our maximum exposure is.”
Council members who supported the deal insisted it was too early to review because there still wasn’t a formal contract in place.
“This is all hypothetical,” said Councilman Casey McKeon. “When it comes back…that’s when you cost it out.”
While the city’s tourism bureau produced a report claiming the event brought over $120 million in economic impact to the surrounding area, a Voice of OC investigation last year found they couldn’t explain how they got those numbers.
[Read: How Much Money Does the Pacific Airshow Bring to Huntington Beach?]
City Attorney Michael Gates insisted that the settlement deal was structurally sound, and questioned why council members who felt it was illegal hadn’t gone out and reported it.
“You can pick up and call the DA,” Gates said.
That prompted a response from one councilwoman raising doubts about the credibility of the local DA office to probe politicians.
“Oh, who just gave you a certificate honoring you?” said Councilwoman Natalie Moser.
District Attorney Todd Spitzer did previously give Gates a commendation for his work in 2022, and has publicly chastised council members in other cities for sharing details about lawsuits discussed behind closed doors.
[Read: OC District Attorney Rarely Prosecutes Political Crimes]
Strickland called for a new economic impact report that the city would pay for, and made it explicitly clear that it would not be an audit of the airshow’s direct income.
“The reason why you have economic impact reports is there are certain quantifiers that are part of that impact,” Strickland said. “You won’t get that from an audit.”
But by the end of the night, council members unanimously agreed to do a review of all the subsidies they’d granted to private businesses over the past five years, and to study if the city got their money’s worth.
McKeon noted that the air show would be included as part of that review.
“The truth of the matter is the city works with big business all the time,” McKeon said. “These arrangements are beneficial to both parties and are a common city practice.
It remains unclear when the discussion will come back for city leaders, with McKeon asking for a presentation in September as other council members noted that Chief Financial Officer Sunny Han had just submitted her resignation, leaving only a handful of staff in the finance department.
“This is common city practice,” McKeon said again. “Let’s put it all out on the table, every concession we give to big business.”
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.
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