Harbor lights: Seaside Ice Meltdown

by Harry Munns

Redondo councilman Pat Aust swears he isn’t saying, “I told you so,” when he reminds his fellow councilmen he voted against Seaside Ice, but he could if he wanted to. Back in 2008 when the city began considering a proposal to operate a holiday-season ice skating rink at Seaside Lagoon, Aust didn’t believe it was in the city’s best interest.

It couldn’t have been easy for him to cast the only “nay” vote when the council accepted the proposal. Most observers saw Seaside Ice as the solution to a problem that had perplexed the city for years. It was a way to use Seaside Lagoon during the 9 months per year when it isn’t used for swimming.

“I was not against the idea of having something in there that would enhance it. I just looked at their business plan and said this won’t fly,” Aust said.

His main objection was that the projected income amounted to less than expenses. He did a quick calculation using 25,000 people, the number Seaside Ice, LLC reported in the 2008-09 season. If they paid the full price of $14 that came to $350,000. “And it was going to cost them $600,000 to run it. It doesn’t take a genius to figure that one out,” he said.

There were other sources of revenue, but usage made up the bulk of the Seaside Ice’s income.

According to Aust, his predictions began to come true long before anyone ever strapped on skates and performed a double Lutz. Electrical power necessary to freeze thousands of gallons of water far exceeded the aging Lagoon’s capability to deliver it. The electrical system had to be upgraded to 480 volts and 600 amps, which for non-electricians is some honking power.

From Aust’s point of view, payment for the electrical upgrade came about through some mysterious and confusing process. Seaside Ice hired a landscape contractor to wire lights. The contractor hired a sub-contractor to upgrade the Lagoon’s electrical system.

The city agreed to pay for the first $50,000 without Aust’s approval. He didn’t buy the argument put forth by proponents of having the city foot the bill. “They were saying the Lagoon would need these upgrades in the future. I told them the power it takes to freeze water is much different from what it takes to pump water for swimming,” Aust said.

Then the bills began to arrive. The first $50,000 the city agreed to pay was consumed quickly. “Seaside Ice was going to pay the next $50,000. Everyone was saying, it couldn’t cost more than that, could it?” Aust said.

It ended up costing another $47,000, $147,000 just to make a big ice cube. So who pays the additional expense above the first $100,000? “We (the city) do, of course,” Aust said.

He says that even though Seaside Ice, LLC agreed to pay the second $50,000 they have paid nothing so far. “The city has written every check so far. They (Seaside Ice, LLC) were supposed to pay for the electricity. We paid for that too,” Aust said.

Aust says that even if the rink operation became profitable and the company paid the city the $50,000 sometime in the future, the $97,000 remaining balance would far exceed the sum of all rental fees owed by Seaside Ice, LLC, which increase gradually and top out at $20,000 in year 5.

We may never find out what happens in year 3, 4 or 5. A document filed with the city by Seaside Ice, LLC titled “Year Two Review and Proposals”, paints a grim picture of the project’s second year results and prospects for turning it around.

The company states that attendance was down by 35% and sponsorship dropped by 50%. They blame the economy and the city. The drop in participation tracks with other, similar entertainment venues.

The document claims the city withdrew some of its previous enthusiastic support for Seaside Ice. If it had not, the company would have reached its sponsorship goals, according to the document. It also says Redondo Beach imposed some new requirements that placed an unexpected financial burden on the company.

Perhaps the most telling prediction for the future of Seaside Ice lies in the company’s proposals for year 3 and beyond. They could continue to run the seasonal ice rink if the city relieves them of the responsibility to pay past and future expenses that were previously agreed upon. Seaside Ice would also agree to turn the keys to the event over to the city so the city could run it.

It’s safe to assume that based on the company’s characterization of its situation as a “financial emergency”, something substantial will change with Seaside Ice this winter.

“I hate to be right. I’d much rather be saying I was totally wrong on this one. But in these tough times we’re losing positions, cutting back employee compensation and turning off street lights to save money, but can we waste this kind of money? That’s what’s totally wrong to me,” Aust said. Don’t sharpen your skates just yet.

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