Executives at the Costa Mesa Chamber of Commerce are asking the city for a subsidy of over $123,000 after losing over a quarter of million dollars in income during the COVID-19 global pandemic.
Early Wednesday morning, David Haithcock, CEO of the Chamber – an over 100 year old institution aimed at supporting local business interests – stood before elected officials at the city council meeting to answer questions about the financial state of the chamber itself.
His answers led elected officials to unanimously vote to continue a discussion on subsidizing the Chamber – with over 600 member businesses – to a later date.
“If you were on Shark Tank, you’d be in big trouble,” said Councilman Don Harper at the city council meeting. “I’m just going to be honest, you don’t give me a lot of confidence that you’ve righted the ship, that you’re running an organization, that you’ve got it all together. No offense.”
Haithcock, the third CEO to run the Costa Mesa chamber since 2020, struggled to answer questions on his organization’s finances in 2022 and 2023 at the meeting and if the group has corrected their financial issues.
Harper questioned how exactly the chamber benefits businesses in the city.
“We connect businesses to businesses, connect businesses to government and city departments, and we connect businesses to professional services and connect businesses to financial opportunities,” Haithcock responded.
He said the Chamber depleted its reserves – going from $70,000 before the pandemic to $25,000.
Haithcock also told the council that the money from the subsidy would be used for administrative staffing for the chamber which has dropped from six people to two – including himself and Juliann Harkness, the vice president of membership services.
The request comes as officials across Orange County approve putting sales tax increase measures on the November ballot amid deficits millions of dollars deep and as municipal spending on public safety outpaces revenue coming in.
A Request For Help
Haithcock sent a letter to the city manager in June requesting the money from federal COVID bailout funds after what he described as a “significant loss of revenue” during the pandemic.
“The requested financial support of $123,759 from the ARPA Local Relief Funds would provide the Chamber with much-needed financial assistance to recover from these losses and ensure the Chamber’s current and future growth,” he wrote.
“This funding will help us continue to support local businesses, foster economic development, and enhance the overall well-being of our community.”
According to the letter, the chamber provided member businesses credits to cover membership dues in 2020 and 2021 resulting in a combined loss of over $133,000 in income.
The pandemic also impacted the chambers annual events like the Mayor’s State of the city resulting in a combined loss of over $119,000 in 2020 and 2021.
Mayor John Stephens questioned why the chamber waited until 2024 to ask for money.
City Manager Lori Ann Farrell Harrison, who sits on the chamber’s board of directors, said it was her fault for the delayed formal request.
“We’ve been having this dialog with the chamber for probably 12, 18 months and so I think initially it was a matter of trying to designate which funding source they would be eligible for,” she said.
Officials have given out subsidies to businesses in the city for pandemic related losses before.
They gave out $80,000, according to city staff, to Los Angeles Chargers for closing training practices during the pandemic in 2021 and 2022. The NFL team held summer training camps at the Jack Hammett sports complex for a few years.
In 2022, the Chargers announced they would be moving their training camps to El Segundo.
City officials also gave out $600,000 to Travel Costa Mesa, the city’s tourism bureau, due to a loss of hotel tax revenue during the pandemic.
And officials gave out $2 million in small business grants through federal COVID bailout dollars, according to city staff.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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