Huntington Beach has released the settlement agreement with operators of the Pacific Airshow that it fought for more than a year to keep from becoming public. It details the financial promises the city would provide should the air show pursue a long-term contract to stay in town.
The agreement allows the city and Pacific Airshow to enter into an agreement that would give the event organizer the exclusive right to host the air show for up to 40 years, along with continued waiving of city fees that pay for public safety services and allowing the company to monetize thousands of parking spaces.
“They just simply rolled over, bellied up and gave them what they asked for,” said Gina Clayton-Tarvin, who sued for the document’s release. “Is that a way to run a government agency?”
The settlement came out of the cancellation of the third day of the 2021 air show after an oil spill occurred off the coast. Pacific Airshow sued the city to recover the losses it incurred. The two sides settled in May 2023, which drew objection from some accusing it of being a giveaway when the city should have fought the lawsuit.
When the settlement was announced, City Attorney Michael Gates provided only a one-page summary of the settlement terms. An Orange County judge ordered the settlement be released after agreeing with Clayton-Tarvin, a local school district trustee, that the nine-page document should be public.
Information already released included that the city had agreed to pay Pacific Airshow $4.9 million in cash and waive or refund fees for air shows from 2021 to 2023. The city will pay Pacific Airshow an additional $2 million for any future money recovered from claims against the energy company that owns the pipeline that leaked oil in 2021.
New details from the settlement agreement include what the city shall provide Pacific Airshow should it desire a long-term contract with the city.
Pacific Airshow would have the exclusive right to host an air show in the city at least once a year for a decade. Pacific Airshow would have the option to renew that right for another 30 years.
The city would let Pacific Airshow monetize up to 3,500 city parking spaces near the beach and in the Main Street parking garage at no cost, along with RV parking spots. If the event needed additional parking, it could buy more for the event from the city at $10 a space per day. The city would staff the parking lots.
Also according to the settlement, the city would waive its permitting fees for hosting the show, including for police, fire and marine safety.
A joint statement from Councilmember Dan Kalmick, Rhonda Bolton and Natalie Moser, who were on the council when the settlement was reached, called the agreement an unprecedented tax-payer giveaway. The vote on the settlement was made in a closed session.
They said the new parking revenue terms would be worth millions “compared to a previous flat subsidy of $110,000 on incremental parking cost increase during airshow.”
Huntington Beach will also pay for an environmental review of the air show. The councilmembers also said the city has budgeted $550,000 for the environmental review, calling it “an unprecedented move for any applicant.”
“This no-bid contract, resulting from a lawsuit and lacking public scrutiny, represents a giveaway of public funds and resources for cancellation of one day of an event,” the statement said. “We call on the attorney general to investigate this agreement for a potential gift of public funds.”
On Thursday, Mayor Gracey Van Der Mark defended the settlement and asked why the three councilmembers hadn’t reported it to a law enforcement agency earlier if they felt it was improper.
The City Council’s conservative majority said it chose to settle to ensure that the air show continued to be held in Huntington Beach and prevent litigation from dragging on.
“This settlement agreement was developed in January through May of 2023,” Van Der Mark said in a statement. “Councilmembers Kalmick, Moser, and Bolton were involved, part of the discussion, and had the information, yet they did not say a thing until now? Had they believed there was anything improper, nothing stopped them from contacting the attorney general then, or the district attorney, or any other law enforcement agency.”
Pacific Airshow could sell its contract to another party, according to the settlement. A City Council majority of five or more votes would be needed to prevent the contract and its rights from being transferred.
The city posted the document online on Wednesday with an accompanying news release stating that no long-term commitment to the air show has been made by either party yet.
That contract would “come to the City Council after full disclosure to the public and after public input for final approval of such a contract,” the release said.
Clayton-Tarvin said the document proves her concerns that it was a “shameless giveaway.”
“It should have been released from day one,” she said. “We should have never been told you only get this executive summary and that’s all.”
Gates said Pacific Airshow hasn’t approached the city yet for a long-term contract.
“Developing a contract like that would take months and it would be presented to council with all of the terms and conditions exposed for public review and public comment,” Gates said. “I can’t see any way that would happen before (the 2024) air show.”
“A lot of this is carryover from what occurs as standard practice with Pacific Airshow pursuant to the permit every year,” Gates added. “We already allocate a lot of parking spaces. We already provide support for public safety. A lot of these things, they’re not new. I think Pacific Airshow’s desire to have it built into a long-term contract is just so there’s predictability.”
Gates declined to comment on what parts of the settlement agreement made him determine the benefits of keeping it confidential outweighed the benefits of public review. He said the city is still going through a claims process to obtain damages from the oil spill and would be able to file a lawsuit as soon as September.
The California State Auditor has also begun examining the decision-making process that led to the city paying out millions to Pacific Airshow.
State Sen Dave Min, who requested the audit, said in a statement that the settlement at first glance “looks like a massive giveaway of well more than $10 million in Huntington Beach taxpayer money to settle what looks like less than $200,000 in claimed damages (which were unlikely to ever succeed in court). This settlement raises more questions than it answers, and I think it merits a close look by the California Attorney General’s office.”
The audit is expected to be released this winter.
