HomeMy WebLinkAboutConsider a Request from Pacific Airshow Event Organizer Code 19(2-770. )
(A?ISd,C/ '2lJQb- ain Street,
(O Huntington Beach, CA
92648
City of Huntington Beach
File #: 22-733 MEETING DATE: 9/6/2022
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Al Zelinka, City Manager
VIA: Chris Slama, Director of Community & Library Services
PREPARED BY: Chris Slama, Director of Community & Library Services
Subject:
Consider a request from Pacific Airshow event organizer, Code Four, to approve a subsidy for
the September 30 through October 1, 2022 event, as well as a deferred payment schedule for
fees and charges due to the City
Statement of Issue:
The City of Huntington Beach has been contacted by Code Four, the event organizer of the Pacific
Airshow, requesting a subsidy be approved as part of the permitting process, as well as a deferred
schedule for payment of fees and charges due to the City.
Financial Impact:
The proposed subsidy could be similar to the past City Council-approved amount of up to $110,000,
which is based on a share of the actual parking and HB RV Campground revenues collected during
the three-day event and would be used to offset a portion of the direct event staffing costs.
Preliminary analysis indicates that the estimated 2022 airshow direct event staffing costs for Police,
Fire, Marine Safety, and Public Works total $134,366. Please note that this amount is an estimate
and that final costs may fluctuate based on the actual staffing needs during the event.
In addition to the $134,366 in staffing costs, Code Four expenses due to the City include $17,797 for
various permit fees, $40,800 in estimated reserved parking space charges used for event production
staging and VIP purposes (240 spaces x 17 days x $10), and $64,000 for reserved HB RV
Campground sites to be sold and packaged by the organizer (40 sites x $1,600), totaling $256,963.
Approval of a subsidy of up to $110,000 would reduce Code Four's bottom line costs from $256,963
to $146,963 as has been approved by City Council in prior years to offset direct staffing event costs.
Original Amount $256,963 Owed to City by Code Four
Less $110,000 Share of Parking Revenue Subsidy
Adjusted Amount $146,963 Reduced Amount (with Subsidy)
City of Huntington Beach Page 1 of 4 Printed on 8/31/2022
powere3g*LegistarT'
File #: 22-733 1 MEETING DATE: 9/6/2022
Should the City Council decide to approve the $110,000 maximum subsidy, the General Fund would
lose that same amount in potential revenue for the three-day event. However, at the same time, it
should be understood that prior to the event, typical pre-airshow parking revenues during similar
weekends average $41,000. Therefore, while the General Fund would lose up to $110,000 in
estimated revenue, a potential gain of $42,532 (over and above the pre-airshow typical weekend) is
possible depending on actual revenues, even if a subsidy of up to $110,000 is approved as shown
below.
2022 Event $193,532 Estimated Event Parking & HB RV Camping Revenue
Less $ 41,000 Average Pre-Airshow Parking
Less $110,000 Maximum Parking Share Subsidy
Balance $ 42,532 Potential General Fund Gain
Code Four is also requesting a deferred schedule for payment of fees and charges due to the City.
Per Section 13.54 of the Huntington Beach Municipal Code relating to Specific Events, all direct costs
for any event, including staffing, operational set-up and tear-down fees, as well as various permit and
reserved parking space charges, are to be paid by the organizer at least 30 days prior to the event
date.
Recommended Action:
A) Consider Code Four's request for a subsidy, and based on previous approvals, grant up to
$110,000 in parking and camping revenue for the 2022 event to cover a portion of direct staffing
expenses and direct staff to transfer said amount; AND/OR,
B) Consider Code Four's request to delay the portion of the fees and charges due related to direct
City event staffing and auto parking spaces, to be invoiced to Code Four following reconciliation of
actual costs and due to the City by November 15, 2022. Require payment of the $17,797 in permit
fees and $64,000 in HB RV Campground site revenue prior to the event per the Huntington Beach
Municipal Code; OR,
C) Deny Code Four's subsidy request and direct staff to require full payment of all fees, charges, and
HB RV Campground site revenue in the amount of $256,963 no later than September 23, 2022.
D) Provide any direction City Council deems appropriate regarding financial support of future air
show events.
Alternative Action(s):
Do not approve the recommended actions and consider alternative options.
Analysis:
History of the Pacific Airshow
In 2016, the inaugural year of the Airshow, the City Council adopted Resolution No. 2016-65, which
allowed for the increase of parking fees to help offset direct staffing costs owed by the event
organizer. In 2017, the City Council adopted Resolution No. 2017-44, which once again temporarily
City of Huntington Beach Page 2 of 4 Printed on 8/31/2022
powereWb� LegistarM
File #: 22-733 MEETING DATE: 9/6/2022
raised parking rates in the south beach lots and the main Promenade Parking Structure to generate
additional revenues to be used in support of the event. In 2018, the City Council adopted Resolution
No. 2018-48, which made the parking rate modifications for the Airshow permanent. In 2019, the City
Council unanimously approved the parking offset "subsidy" to no more than $110,000. This amount
was contingent on actual parking revenues.
The 2022 event will be the sixth year the City hosted an airshow and the fourth year that Code Four
will be the organizer of the event. Each year Code Four has requested that the City waive related
permit fees and provide a parking subsidy to reduce their event costs. To date, the City has waived
$86,425 in permit related fees and provided $296,094 in parking offset revenues. This includes
approximately 200+ reserved parking spaces each year at no cost to utilize for both set-up and
staging areas, as well as event related VIP and production staff parking.
Code Four's reasons for their waiver requests focus on the direct economic benefits that the City
receives on a community-wide basis, as well as the international recognition Huntington Beach
receives as a destination airshow for people who know (and fly in) airshows.
The table below provides detailed information regarding anticipated Code Four expenses. As shown,
without any fee waivers or subsidies, Code Four owes the City $256,963 in estimated expenses. If a
$110,000 maximum subsidy is approved by the City Council, Code Four expenses will be reduced
from $256,963 to $146,963, with the $110,000 being applied to the estimated direct staffing costs
since these costs fluctuate based on actual event needs.
CODE FOUR ORGANIZER ESTIMATED EXPENSES
Permit Fees
Application Fee $ 450
Daily Set-Up/Take-Down Fee $ 9,450
Permit Fee $ 4,050
Pollution Prevention $ 400
Main Street Banners $ 657
Pennant Banners $ 2,790
Subtotal $17,797
Estimated Direct Event Staffing Costs
Police $ 48,000
Fire $ 9,876
Beach Maintenance $ 5,768
Marine Safety $ 69,990
Public Works/ Electrician $ 732
Subtotal $134,366
Estimated Reserved Event Parking Space Fees
Estimated 240 spaces @ $10 x 1$ 40,800
Subtotal $ 40,800
HB RV Campground Sites
City of Huntington Beach Page 3 of 4 Printed on 8/31/2022
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File #: 22-733 MEETING DATE: 9/6/2022
40 RV sites x $1,600 $ 64,000
Subtotal $ 64,000
TOTAL AMOUNT OWED $256,963
Less up to maximum $110,000$110,000
ADJUSTED TOTAL AMOUNT C$146,963
In conclusion and as part of the deliberation and decision making process, staff is recommending that
regardless of the final actions taken by the City Council regarding this request, that at a minimum,
Code Four pay the $17,797 in permit fees and the $64,000 in HB RV Campground sites by
September 15, 2022. Under this scenario, the balance of fees and charges will be billed within 30
days after the event and Code Four would be required to pay all final amounts by November 15,
2022.
Also, it should be noted that the maximum $110,000 shared parking subsidy discussed in this staff
report is associated with the 2022 event only. Therefore, should the City desire to continue to host
the Pacific Airshow event in future years, City Council may also wish to make clear via this action or
its comments under what circumstances, if any, the City would entertain further support for 2023 and
beyond.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable -Administrative Item
Attachment(s):
Not applicable.
City of Huntington Beach Page 4 of 4 Printed on 8/31/2022
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Moore, Tania
From: Esparza, Patty 7-43
Sent: Tuesday, September 6, 2022 5:41 PM
To: Moore, Tania
Subject: Fwd: Parking Offset Agenda Item 22-733
Sent from my iPad
Begin forwarded message:
From: "Slama, Chris"<CSlama@surfcity-hb.org>
Date:September 6, 2022 at 5:39:13 PM PDT
To: "Esparza, Patty" <PEsparza@surfcity-hb.org>
Subject: Fwd: Parking Offset Agenda Item 22-733
---------- Forwarded message ----------
F om: Kevin Elliott<kevin@codefour.com>
ate: Sep 6, 2022 3:55 PM
Subject: Parking Offset Agenda Item 22-733
To: "Slama, Chris" <CSlama@surfcity-hb.org>,"Zelinka, Al" <A1.Zelinka@surfcity-hb.org>
Cc:
Mr.Slama & Mr. Zelinka,
Thank you for your support of Pacific Airshow. The agenda item in question (#22-733) on tonight's City
Council agenda seems to mischaracterize the current situation and the resolution sought. Please make
sure that the agenda item is corrected to reflect the current situation and desired resolution. I ask that
you clarify the item articulating that Pacific Airshow's request is to REMOVE the arbitrary cap on the
"parking offset"and simply allow the computation to work as it was intended.
Pacific Airshow's position regarding this parking offset matter is simple:
1. The individual parking fees were raised and justification provided in the council action was"to
support of the event"
2. The RV camping fees were raised and justification provided in the council action was"in support
of the airshow"
I simply request that the incremental revenue from the parking fees, both individual vehicles and RV
camping be used as it was intended, in support of the airshow and used to offset the cost of public
safety services. This is not a "subsidy" this is the City raising additional revenue from the citizenry and
using it to help to offset public safety costs associated with a very popular(largely free)event that brings
significant, more than$105,000,000.00 in positive economic impact and countless other flow-on
destination marketing benefits to our City.
We know from previous years that the revenue generated from the individual vehicle parking has
resulted in a parking offset that maxed out the offset at$110,000,the arbitrary cap set by
I
Council. Incremental revenue could have been more, however, I wouldn't know based on the cap being
instituted. The request for city council action (File#18-166) references estimated incremental revenues
of$134,000, and that was back in 2018.
If standard 4 night RV camping rate is$70/night x 4 nights=$280 and I am to pay the$1,600 per RV
space "increased rate"x 50 spaces=$80,000 then the calculation should be$80,000—($280 * 50
spaces)= $66,000 in incremental revenue to the city that should be applied "in support of the airshow".
I was the one who fought to have the RV camping rates increased because the intent was the
incremental revenue was to help offset public safety costs. I fought long, and presented evidence to
support the case when it was brought to Council in support of the event.
Bottom line is the City Council has voted to amend the parking fee schedule and to raise the individual
parking rate and the RV camping rate "in support of the airshow". If this is the case then there should
be no requirement to seek approval to have those funds applied "in support of the airshow"given this
was the justification for the increase in the first place.
You have mentioned that"in support of the airshow" is subjective and vague, I would argue that there is
only one way that these funds can be applied to support the event and that is through offsetting the
tremendous costs the city levy's on the event from public safety to permitting costs and beyond.
My last point would be that should the Council vote to not apply the incremental parking revenues to
the public safety costs, it will be necessary for Council to vote to amend the parking fee schedule back to
its pre-airshow rates and NOT charge the citizenry these increased prices. There is no case in which
keeping those fees arbitrarily, and in direct conflict with the justification provided in the council
resolution,would be allowable.
Very Respectfully,
Kevin
Kevin Elliott, CEO
Code Four
kevin(acodefour.com
HQ: +1 (714)500-4994 1 US Mobile: +1 (714)719-2887 1 AUS Mobile+62 405 077 177
HQ: 5252 Bolsa Ave. Huntington Beach,CA 92649
2
9/7/2022
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Pacific Airshow
)�� Subsidy Request and
--- `�- Payment Schedule for Fees and
Charges
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NT Item #30
History
2016 - Airshow Inaugural Year — City Council Actions
• Adopted Resolution No. 2016-65, which increased
parking rates to help offset direct staffing costs owed
by the event organizer.
• Approved deferral of 75% of fees until 30 days after
the event.
2017 - City Council
• Adopted Resolution No. 2017-44, temporarily raising _°t °".INs,oy�F9
parking rates in the south beach lots & the Main
Promenade Parking Structure in support of the event.
1
9/7/2022
History
2017- City Council (continued)
• Approved the deferral of payment for all public
safety/staff charges to 45 days following the event.
2018 —Economic Development Committee -
Consensus to continue to provide a similar parking
subsidy due to the transition between the former even ��NONGT
organizer and Code Four
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History
2018 — City Council
• Adopted Resolution No. 2018-48, which made the
parking rate modifications in support of the event
permanent.
2019 — Economic Development Committee
• Code Four reported a continued need for support from
the City until a large sponsor could be found.
�NTINGJ
2019 - City Council
• Unanimously approved a parking subsidy of no more r
than $110,000 (contingent on actual parking revenues)9��FONTVA�oQ=
2
9/7/2022
History
The 2022 event will be the sixth year the City hosted an
airshow and the fourth year that Code Four will be the
organizer of the event.
Each year the event organizer has requested that the
City waive related permit fees and provide a parking
subsidy to reduce their event costs.
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To date, the City has waived $86,425 in permit related
fees and provided $296,094 in parking offset revenues.
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History
This includes approximately 200+ reserved parking
spaces each year at no cost to utilize for both set-up and
staging areas, as well as event related VIP and
production staff parking.
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Statement of
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Statement of Issue
The City of Huntington Beach has been in conversations
with Code Four, the event organizer of the Pacific Airshow
requesting:
1 . A subsidy be approved as part of the permitting process,
2. A deferred payment schedule for fees and charges due
to the City.
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Per HBMC Section 13.54 relating to Specific Events, all o� NGAAPAA„fo 'y��9
direct costs for any event, including staffing, operational
set-up and tear-down fees, as well as various permit and 9
reserved parking space charges, are to be paid by the 9ycF�ouNTV
orclanezer at least 30 days nrior to the event date-
4
9/7/2022
Statement of Issue
Recent Communication Received from Code Four
• This afternoon 3:55 PM, September 6, 2022
• Email correspondence was received from Code Four requesting a
removal of the prior Council-approved parking subsidy offset cap of
$110,000
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Fiscal Impact
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9/7/2022
Fiscal Impact
The proposed subsidy could be similar to the past
City Council approved amount of up to $110,000.
The amount is based on a share of the actual
parking and HB RV Campground revenues collected
during the three-day event and would be used to
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offset a portion of the estimated direct event staffing o���r TPN^f°�BF9
costs.
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Fiscal Impact
Preliminary analysis estimates the 2022 airshow direct event
staffing costs at $134,366. Note that this amount is an
estimate and that final costs may fluctuate based on the actual
staffing needs during the event.
Estimated
Police $48,000
Fire $9,876 ��NTINGTO
$5,768 0� „1016R4;Fa
9
$69,990 -Public —
$732 9 r
. $134,366 �OouNTv
6
9/7/2022
Fiscal Impact
• . - Four Expenses
• Costs $134,366
Various -- $17,797
Estimated Reserved • Space Chargesused $40,800
for Event Production Staging and VIP Purposes
1 Spaces X 17 D. 1
ANT I NGTD
' Reserved HB RV Campground Sites to be Soldand $64,000 o���,wPA„Fotie
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Packaged by - Organizer (41 Sites X $1,600)
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Total $256,963 �.
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Fiscal Impact
Approval of a subsidy of up to $110,000 as approved by
City Council in prior years would reduce Code Four's
bottom line costs from $256,963 to $146,963 to be used to
offset direct staffing event costs.
Original Amount !---$256,963! 11�4
Less $110,000 Share of Parking Revenue Subsidy
:Adjusted $146,963 Reduced Amount (with Subsidy)
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9/7/2022
Fiscal Impact
Should the City Council approve the $110,000 maximum
subsidy, the General Fund would lose that same amount
in potential revenue for the three-day event.
However, typical pre-airshow parking revenues during
similar weekends averaged $41 ,000, so even with the
subsidy, a potential gain of $42,532 could be realized.
$193,532 Estimated Event Parking & HB RV Revenues
$41,000 Average Pre-Airshow Parking ot��Nt'"soye
110 000 Maximum Parking Share Subsidy
Balance $42,532 Potential General Fund Gain
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Recommended
Action
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9/7/2022
Recommended Action
A) Consider Code Four's request for a subsidy, and based on
previous approvals, grant up to $110,000 in parking and
camping revenue for the 2022 event to cover a portion of
direct staffing expenses and direct staff to transfer said
amount; AND/OR,
B) Consider Code Four's request to delay the portion of the fees
and charges due related to direct City event staffing and auto
parking spaces, to be invoiced to Code Four following
reconciliation of actual costs and due to the City by November
15, 2022. Require payment of the $17,797 in permit fees and 41
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$64,000 in HB RV Campground site revenue prior to the event =
per the Huntington Beach Municipal Code; OR, 2cF�UNTVP�°Qz
Recommended Action
C) Deny Code Four's subsidy request and direct staff to
require full payment of all fees, charges, and HB RV
Campground site revenue in the amount of $256,963
no later than September 23, 2022.
D) Provide any direction City Council deems appropriate
regarding financial support of future air show events.
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9/7/2022
Final Considerations
In conclusion, staff is recommending that at a minimum, Code
Four pay the following by September 15, 2022:
• $17,797 in permit fees and the
• $64,000 in HB RV Campground sites
Under this scenario, the balance of fees and charges will be
billed within 30 days after the event and Code Four would be
required to pay all final amounts by November 15, 2022.
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Final Considerations
The proposed maximum $110,000 shared parking
subsidy, if approved, would be only for the 2022 event.
Should there be a desire to continue to accommodate the
Pacific Airshow event, City Council may wish to provide
staff with additional direction regarding future financial
support per Recommended Action D.
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9/7/2022
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� Pacific Airshow
Subsidy Request and Deferred
Payment Schedule for Fees and
._ o. Charges
Fg 77,
L'O Q►�` September 6, 2022
LINTY C' Item #30
SUPPLEMENTAL
CGIVIINIUNICATION
History
2016 - Airshow Inaugural Year — City Council Actions
• Adopted Resolution No. 2016-65, which increased
parking rates to help offset direct staffing costs owed
by the event organizer.
• Approved deferral of 75% of fees until 30 days after
the event.
2017 - City Council
• Adopted Resolution No. 2017-44, temporarily raising °�J"'NSTO"m9
parking rates in the south beach lots & the Main i
Promenade Parking Structure in support of the event.
1
9/6/2022
History
2017- City Council (continued)
• Approved the deferral of payment for all public
safety/staff charges to 45 days following the event.
2018 —Economic Development Committee -
Consensus to continue to provide a similar parking
subsidy due to the transition between the former even ��NTINGT
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organizer and Code Four
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History
2018 — City Council
• Adopted Resolution No. 2018-48, which made the
parking rate modifications in support of the event
permanent.
2019 — Economic Development Committee
• Code Four reported a continued need for support from
the City until a large sponsor could be found.
2019 - City Council �NTINGTpy
ti 9
n
• Unanimously approved a parking subsidy of no more
than $110,000 (contingent on actual parking revenues) y NNTrCA�°�_
2
9/6/2022
History
The 2022 event will be the sixth year the City hosted an
airshow and the fourth year that Code Four will be the
organizer of the event.
Each year the event organizer has requested that the
City waive related permit fees and provide a parking
subsidy to reduce their event costs.
�NTINGTp
To date, the City has waived $86,425 in permit related
9�
fees and provided $296,094 in parking offset revenues. �:`;.az ,. oQ=
FUUNTN Ca
History
This includes approximately 200+ reserved parking
spaces each year at no cost to utilize for both set-up and
staging areas, as well as event related VIP and
production staff parking.
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9/6/2022
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- � C11 Statement of
s
=- Issue
17,
Cp�NTy Statement of Issue
The City of Huntington Beach has been contacted by Code
Four, the event organizer of the Pacific Airshow requesting:
1 . A subsidy be approved as part of the permitting process,
2. A deferred payment schedule for fees and charges due
to the City.
Per HBMC Section 13.54 relating to Specific Events, all ��NTiacro
direct costs for any event, including staffing, operational o� „owPOA.,Fo ti�F9
set-up and tear-down fees, as well as various permit and _
reserved parking space charges, are to be paid by the 9
organizer at least 30 days prior to the event date. 2�FcoUNTI
4
9/6/2022
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_= Fiscal Impact
17, 1909 P `�
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Fiscal Impact
The proposed subsidy could be similar to the past
City Council approved amount of up to $110,000.
The amount is based on a share of the actual
parking and HB RV Campground revenues collected
during the three-day event and would be used to
��NT I NGT�
offset a portion of the estimated direct event staffing o� ,��opPo..,Fa <9
costs. =}
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5
9/6/2022
Fiscal
Preliminaryestimates - 2022 airshowdirect event
staffing costs at 'r • • Note that this amount
estimate • that final costsbased on
staffingneedsduring event.
Estimated Direct Event Staffing Costs
Police r- : •••
Fire • :76 WING
Beach Maintenance $5,768
Marine Safety 'r.• •• ;-
Public Works/ Electrician
Totat. $134,366 Fiscal
Impact
Code Four Expenses Due To The ity
Staffing Costs $134,366
Various Permit Fees
Estimated Reserved Parking Space Charges used
for Event Production Staging and VIP Purposes
,=
Reserved HB RV Campground Sites to be Sold and $64,000
Packaged by the Organizer (40 Sites X $1,600) ��� •`:
Total
9/6/2022
Fiscal Impact
Approval of a subsidy of up to $110,000 as approved by
City Council in prior years would reduce Code Four's
bottom line costs from $256,963 to $146,963 to be used to
offset direct staffing event costs.
• • . •
Less $110,000 Share of Parking Revenue Subsidy
• - • • - $146,963 Reduced Amount (with Subsidy)
NWINGlp
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Fiscal Impact
Should the City Council approve the $110,000 maximum
subsidy, the General Fund would lose that same amount
in potential revenue for the three-day event.
However, typical pre-airshow parking revenues during
similar weekends averaged $41 ,000, so even with the
subsidy, a potential gain of $42,532 could be realized.
$193,532 Estimated Event Parking & HB RV Revenues
$41,000 Average Pre-Airshow Parking ot "T'M1�' m9
$110,000 Maximum Parking Share Subsidy --
$42,532 Potential General Fund Gain "'fCpGtiT pt
7
9/6/2022
ANT I N G T p
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Recommended
Action
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17 1 909,
C�IYNTY �P
Recommended Action
A) Consider Code Four's request for a subsidy, and based on
previous approvals, grant up to $110,000 in parking and
camping revenue for the 2022 event to cover a portion of
direct staffing expenses and direct staff to transfer said
amount; AND/OR,
B) Consider Code Four's request to delay the portion of the fees
and charges due related to direct City event staffing and auto
parking spaces, to be invoiced to Code Four following
reconciliation of actual costs and due to the City by November
15, 2022. Require payment of the $17,797 in permit fees and a�N11NBT0
$64,000 in HB RV Campground site revenue prior to the event ==
per the Huntington Beach Municipal Code; OR, 9ysF�oUlm rta`,��"
8
9/6/2022
Recommended Action
C) Deny Code Four's subsidy request and direct staff to
require full payment of all fees, charges, and HB RV
Campground site revenue in the amount of $256,963
no later than September 23, 2022.
D) Provide any direction City Council deems appropriate
regarding financial support of future air show events.
��NTINGTO
p` yBF
9
TV
Final Considerations
In conclusion, staff is recommending that at a minimum, Code
Four pay the following by September 15, 2022:
• $17,797 in permit fees and the
• $64,000 in HB RV Campground sites
Under this scenario, the balance of fees and charges will be
billed within 30 days after the event and Code Four would be
required to pay all final amounts by November 15, 2022.
aUNTIMGJO
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9
9/6/2022
Final Considerations
The proposed maximum $110,000 shared parking
subsidy, if approved, would be only for the 2022 event.
Should there be a desire to continue to accommodate the
Pacific Airshow event, City Council may wish to provide
staff with additional direction regarding future financial
support per Recommended Action D.
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