Council OK's 3-Day Corporate Backed Oct. '03 "ShoreFest" To Celebrate "Pike at Rainbow Harbor" After Supportive City Staff Memo Says Police, Fire, Public Works And Other City Services Will Cost Up To $250,000 But Resulting Sales Taxes Are "Anticipated" To Equal or Exceed This
Our Math Says That Would Require $25 Million In Taxable Sales
City Hall Gets Roughly $40 Million In Sales Tax Revenue For Entire Year
Council votes unanimous approval; read transcript excerpts
(July 31, 2002) -- The City Council has voted 9-0 at its July 30 meeting to proceed with a three-day, corporate backed "ShoreFest" (a combination air show, shore celebration and downtown festival) in October, 2003 to celebrate opening of the "Pike at Rainbow Harbor."
The unanimous vote came after a supportive a city staff memo, approved by City Manager Henry Taboada, said the event would require up to $250,000 in police, fire, public works and other city services but "it is anticipated that the sales taxes generated from this event will equal or exceed this amount, which will cover the cost of providing the City services."
Our math says that since LB (and other CA cities) get only one penny in revenue for each dollar of taxable sales, "ShoreFest" would have to generate $25 million in taxable sales to do what city staff's memo claimed: produce $250,000 in sales tax revenue over three days.
City Hall budget documents indicate LB's sales tax revenue totals roughly $40 million dollars for an entire year.
LB currently provides taxpayers with fewer than 2.0 officers per thousand residents and ShoreFest's promoters say their event could bring half a million people to LB -- more than the population of the city itself -- over several days. The Toyota Grand Prix has elsewhere been estimated to bring roughly 250,000 people to LB. City staff's memo did not indicate how the additional police would be provided without further thinning neighborhood service levels.
City staff's memo says, "Any permit issued to Shoresales will include a requirement that Shoresales indemnify the City and provide insurance in accordance with requirements of the City's Risk Manager." Staff's memo says "Shoresales, LLC" is "a business alliance composed of Developers Diversified Realty (DDR), SaleMaker, and Exsportise, created to support the proposal for ShoreFest." City staff's memo did not claim DDR or the other entities would assume liability or indicate what insurance requirements the City's Risk Manager would apply for an event of this proposed magnitude.
City staff also did not indicate from where (besides LB taxpayers) the money would come to pay for the city services if sales tax revenue did not cover the costs.
No Councilmember asked about these matters before voting their approval. We provide transcript excerpts below.
By their vote, Councilmembers authorized the City Manager to execute documents to permit "Shoresales, LLC" to conduct "ShoreFest at the Pike," including an application (indicating City Hall approval) that promoters will submit to the U.S. Armed Forces to secure the appearance of military jet teams.
Transcript excerpts of the Council discussion (unofficial, prepared by us) follow.
Councilwoman Jackie Kell [first to speak after item called]: Many of you may remember the wonderful "Wings over Long Beach" event that was held four years ago at the Long Beach Airport and it was enjoyed by thousands of people from all over the area. Now the ShoreFest event which we are considering in the late summer of 2003 would coincide with and complement next year's "Wings Over Long Beach" again which we will hold at the Long Beach Airport.
Now the "Wings over Long Beach" showcase, it will feature aircraft that will also perform over the beaches of Long Beach, the ShoreFest airshow, and there'll also be many static displays at the Airport.
And one of the highlights of these events will be aerial demonstrations put on hopefully by both the Canadian Snowbirds and one of our nation's elite military flying teams.
And of course we have a deadline here for the precision military flying teams such as the Blue Angels or the Thunderbirds and we must apply for this by August 1.
But I'm excited about this wonderful event that will bring thousands of tourists and sales tax dollars to our city to support our police, our fire department and other services, but we expect to have hundreds of thousands of people on the beach watching these military maneuvers and thousands of course at our airport looking at the static displays.
Therefore I fully support this application for these military flying teams and look forward to seeing them in motion in October of 2003.
OK, I make the motion to authorize the City Manager sign application, execute documents necessary to permit ShoreSales to conduct this event.
Mayor O'Neill: ...This is not new to the Council. We have had a presentation on this [June 11, previously reported by LBReport.com] and there was a great deal of excitement from the Council at that time. I remember that.
Councilmember Val Lerch: ...This project is approximately three and half weeks before the Veterans Day Parade in North Long Beach. My concern is not so much the participants in the parade, but the average citizen saying "three weeks ago I saw a whole bunch of military stuff, why would I go up to North Long Beach and see a parade?" I understand this is for the opening of the Pike. If this becomes an annual event I would like to see this moved to the summer months...
City Manager Taboada: Madam Mayor, if I could respond to that concern. The reason for the timing of the October event in 2003 is to coincide with the opening of the Pike project. And since DDR is a major sponsor of this event, they're going to use this to showcase that development. In future years, if this was to become an annual event, and certainly that's how I would approach this, there is strong sentiment on the part of the hotel and tourism community that this event would be better held during the summer months...So the one year event is fixed because that's the availability of the jet team, but [in] subsequent years I would be, I think, flexible to the extent the jet team availability is flexible.
Councilwoman Kell: Councilmember Lerch, I concur with your motion to change it in the following years.
Councilmember Dennis Carroll: ...I'm supportive of Councilmember Kell's motion. I would request a brief staff report to give the public some assurance their safety is paramount and I believe some steps have been taken...
City Manager Taboada: The actual air show is in a box over the water, and all personnel are absolutely prohibited from being anywhere inside the box. So when the jet teams or other aerial acrobatic acts are performing, they are out over the water which is the safest venue that you could have for an air show. So you wouldn't have the same kind of concerns that if you were holding it at the airport for instance, or any other fixed base facility. So this is absolutely we think the best venue and one that is tried and true in Ft. Lauderdale and that one has gone through without any problems for the last seven or eight years.
City management's memo accompanying the July 30 agenda item stated in pertinent part:
Shoresales is committing that their local spending, and that of their subcontractors, will total $2.5 million toward the production of ShoreFest. They project visitor spending to exceed $30 million over the three-day event. ShoreFest is also committing to an aggressive advertising campaign, which would list the City of Long Beach as a co-
sponsor, and involve securing television, radio, newspaper, billboard cinema and airline video advertising valued at approximately $2.3 million. It should be noted that the
Downtown Long Beach Business Association (DLBA), the Convention and Visitors
Bureau (CVB), and the Strategic Marketing Initiative (SMI) have all expressed their
support for ShoreFest.
Shoresales will sponsor several charitable efforts to benefit local nonprofits and will
sponsor numerous outreach efforts to the community to ensure that ShoreFest is a
citywide event. ShoreFest performers will make appearances in schools, neighborhood
meetings, and community functions throughout the city. Shoresales will be working
closely with the Long Beach Unified School District to develop a science and technology
program in connection with ShoreFest. The event promoter will also provide exhibit
space at the event for each Council District and for selected nonprofits.
All affected City Departments, along with representatives from the United States Coast
Guard, the Queen Mary, the Convention and Entertainment Center, and Long Beach
Transit have met with Shoresales to discuss the logistics for the event.
The potential promotional and economic value of ShoreFest to the City, through its
focus on the shoreline, is expected to be extraordinary. ShoreFest offers the
opportunity to establish another world-class event in the City. For these reasons,
Shoresales has requested that the City donate various City services to enable this
event to occur. It is anticipated that to provide necessary support services for
ShoreFest, up to $250,000 in City services will need to be provided. These will include
services from the Police Department, Fire Department, Public Works Department,
Parks, Recreation and Marine Department, and other departments.
Authorization for the City Manager to execute a permit is necessary at this time because
application must be made to the United States Armed Forces in Washington, D.C. by
August 1, 2002, to secure the military jet teams. Any permit issued to Shoresales will
include a requirement that Shoresales indemnify the City and provide insurance in
accordance with requirements of the City's Risk Manager.
This proposal has been reviewed in accordance with requirements of the California
Environmental Quality Act and a Categorical Exemption has been issued. In the
coming months, additional coordination meetings will be held to ensure the success of
the event and to minimize the impacts on neighborhoods.
This item was reviewed by Deputy City Attorney James McCabe and Budget Manager
Annette Hough on July 22,2002.
The United States Armed Forces requires application for aerial demonstrations by
August 1 of the year preceding the year in which an aerial demonstration is to occur.
City Council action on this item is requested at the July 30, 2002 meeting in order to
meet the August 1 deadline.
The estimated cost for the City to host ShoreFest in FY04 is $250,000. It is anticipated
that the sales taxes generated from this event will equal or exceed this amount, which
will cover the cost of providing the City services.
IT IS RECOMMENDED THAT THE CITY COUNCIL:
Authorize the City Manager to sign an application to secure military aerial jet
teams and to execute documents necessary to permit Shoresales, LLC, to
conduct "ShoreFest at the Pike."
City staff's memo describes ShoreFest as follows:
ShoreFest is conceived as being composed of six large-scale events occurring the first or second weekend in October 2003. It would be promoted and managed by Shoresales, LLC, a business alliance composed of Developers Diversified Realty (DDR), SaleMaker, and Exsportise, created to support the proposal for ShoreFest.
The six events or "Fest"ivals, will coincide with the grand opening of the "Pike at
Rainbow Harbor" (Pike). The large majority of the events would be free to the public.
Individual "Fest"iva1s include:
AirFest - A two-day, four-hour air show targeted to aviation enthusiasts taking place 4,000 feet off the beach. Event components will include: a precision
military jet flying team (e.g., Blue Angels, Thunderbirds, Canadian Snow Birds);
single-unit and multi-unit military demonstrations (e.g., bombing runs, water
rescue, parachute jumps); and civilian aerial acts (e.g., stunt flying, wing
walkers). This event would coincide with the City’s "Wings Over Long Beach"
event at the Long Beach Airport, which would showcase the aircraft featured in
the air show, as well as many other static displays.
HarborFest - A two-day, in-the-water display of various marinecraft targeted to watersports, to be conducted in Rainbow Harbor. Sponsor exhibits, static military
displays, and celebrity activities would also be located at the Pike.
KidsFest - An event targeted to parents and their 6 to 12 year-old children, to take place in the enclosed Rainbow Lagoon area. Event components would
include: amusements (e.g., remote controlled boat races, mazes, karaoke
contests); attractions and exhibits (e.g., Air Force Thunderbirds mini-jet, Brutus
the Skydiving Dog, sponsor exhibits); and costumed characters and mascots
from corporate sponsors (e.g., Willy Wonka, Air Force "Ricky Recruiter").
Musicfest - A concert series targeted to music enthusiasts to be conducted at
one or more Long Beach venues. Specific acts and prices (if any) would be
established based on the specific venue and capacity.
TasteFest - A food village targeted to culinary enthusiasts to be conducted on Shoreline Drive. Pine Avenue restaurants and other local restaurants would be
featured to attract business sector support and showcase the City's fine cuisine.
WaterFest - A two day, two-hour sea show targeted to military and watersports
enthusiasts, to be conducted off the beach and near the Queen Mary. Event
components would include: U.S. military exercises (e.g., hovercraft, beach
exercises, U.S. warship displays); civilian acts (e.g., jet ski, water ski, and kite
surfing displays); and a hydroplane racing exhibition.
Other ShoreFest events and activities will include "BlimpFest," the world's first blimp
race, powerboat races, and extreme sports demonstrations. A fireworks display would
occur each night of ShoreFest. It is estimated that 500,000 people would participate in
the inaugural ShoreFest. This event will be similar to an annual event that is held in
Fort Lauderdale, Florida...
The Council vote was 9-0 and permits the event to proceed.