December 3, 2024
Energy

Amplify Energy pays $5.2 million to Huntington Beach over 2021 oil spill – Orange County Register


Amplify Energy has agreed to pay Huntington Beach $5.2 million for the city’s losses related to the 2021 oil spill that closed beaches in the city and much of Orange County and forced an early end to that year’s air show, city officials announced Monday.

City Attorney Michael Gates, speaking at a City Hall news conference, said the money will go solely to the city.

That distinction is important because city officials agreed last year to pay the Pacific Airshow $4.9 million over losses it incurred by cutting one day off the three-day event, and up to $2 million more if the city received money from Houston-based Amplify that could be linked to damages incurred by the air show.

But Gates said Monday that the payout from Amplify, reached several days ago, covers damages incurred only by the city.

“There will be no sharing,” Gates said. “There will be no contribution.”

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The settlement with Pacific Airshow, negotiated by Gates and backed by some members of the council, has been a contentious issue in Huntington Beach ever since it was announced in May of 2023, with critics arguing the city made a bad deal and should have fought the case in court.

At times, Monday’s news conference — which in addition to Gates included Mayor Gracey Van Der Mark and councilmembers Tony Strickland and Casey McKeon, who support the deal with Pacific Airshow — turned contentious. Gates, Van Der Mark, Strickland and McKeon sparred with  councilmembers Rhonda Bolton, Dan Kalmick and Natalie Moser, who all voted against the settlement and have been critical of Gates.

Kalmick said the city will surely end up paying more to Pacific Airshow than what it got from Amplify after attorney fees are taken into consideration.

“So, the city taxpayers get nothing from this deal,” Kalmick said.

Part of the city’s settlement with Pacific Airshow set terms that could let Huntington Beach host the event for up to 40 years, including waiving fees and allowing thousands of parking spaces to be temporarily monetized by the event operators. Pacific Airshow also agreed to release the city from its lawsuit, but it would not agree to do the same with former Mayor Kim Carr, who was on the City Council in 2021.

Pacific Airshow accused Carr of unilaterally canceling the 2021 air show. But in June a judge ruled in her favor and against Pacific Airshow’s legal arguments.

Carr has said she did not have the power to cancel the air show unilaterally. Instead, she has said, the decision was reached by a combination of agencies and people, including the U.S. Coast Guard, the fire chief, the police chief and the city manager. Carr said Monday that the city decided to no longer indemnify her on the case after July.

Kalmick, a councilmember in 2021, said the Coast Guard along with officials with the unified incident command made the decision to cancel the event.

“To say that (the decision was solely Carr’s), and continue to repeat that based on what a litigant has stated, is absolutely wrong,” Kalmick said.

Bolton, Kalmick and Moser said the council made its decisions about the lawsuit with Amplify Energy based on information it received from Gates.

“We didn’t have the information that was given to the current council,” Bolton said.

During the event Monday, at City Hall, microphones didn’t work when Bolton, Kalmick and Moser spoke at the podium, but they did work when Gates, Van Der Mark, McKeon and Strickland spoke to offer rebuttal arguments.

Strickland, who was mayor last year, defended Gates’s office, saying “saving the air show” via the 2023 settlement was his biggest accomplishment as mayor and a financial windfall for the city.  

To date, details about money lost from air show’s closure — losses incurred by Pacific Airshow and by the city — have not been made public.

The state auditor’s office is tasked with investigating what went into the settlement decision-making process between Pacific Airshow and Huntington Beach. That report was slated to be released later this year or in early 2025, but the city is refusing to cooperate and the audit is on hold due to pending litigation.

Gates emphasized Monday that he and the council majority, which approved the settlement, will be vindicated when they can tell the whole story. When asked why he wouldn’t or others at the city wouldn’t welcome the audit if it provided an opportunity to show details that might end criticism of the settlement, Gates said it’s an issue of local control and that charter cities have authority over how they spend their money.

“If the state auditor could swoop in and investigate every transaction we engage in, then it would be very destructive and invasive when they don’t have a right to,” Gates said.



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