Statement: “The city of San Diego, which nets a minimum $9.6 million in annual rent for the 190 acres leased by the (SeaWorld), may be drawn into the fight as well,” U-T San Diego reported in a March 6 story.
Analysis: SeaWorld remains under attack more than a year after the release of a critical documentary. And if a “Blackfish”-inspired state Assembly bill forces the marine park to significantly shift its business model, the impact could also hit City Hall.
That’s because SeaWorld rents about 172 acres of land and roughly 18 acres of water in the city-owned Mission Bay Park, and the amount of cash the city receives from the arrangement is tied to the theme park’s financial success.
But there is a safety net for the city. The city’s lease with SeaWorld lays out a minimum annual rent charge. A U-T San Diego story published last week claimed that figure is $9.6 million.
The SeaWorld lease is based on nearly 20 sources of revenue that SeaWorld receives and shares with the city. For example, the city gets 3.25 percent of gross revenue from general admissions and 10 percent from parking charges.
Still, the company is expected to pay the city a certain amount regardless of how many visitors pack Shamu stadium or buy souvenirs.
SeaWorld described its commitment to pay the city at least $9.6 million annually in a December 2013 prospectus filed with the Securities and Exchange Commission.
That’s the document U-T San Diego reporter Michael Gardner relied on.
The city confirmed to Voice of San Diego that the company was indeed required to pay just under $9.6 million through the end of last year.
But beginning in January 2014, the month after the SEC document was released, SeaWorld and the city started a new lease that incorporates two new revenues streams and a slightly higher required rent: $10.4 million.
Records also show the city has pulled in more than the previously required $9.6 million in rent since 2005.
Last year, the city collected almost $14 million and the year before, about $12.7 million.
And for the past three years, rent payments from SeaWorld have made up at least 45 percent of annual cash from city leases on Mission Bay.
But the U-T San Diego story said SeaWorld pays the city at least $9.6 million annually. That’s an outdated figure and the city must now pay at least $10.4 million a year, so this statement is false.
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This is part of our Quest: SeaWorld series digging into the park’s impact on our region. Check out the previous story – SeaWorld Lease Gives Taxpayers a Stake in Shamu’s Success – and the next in our series – SeaWorld Execs: ‘Blackfish’ Isn’t Hurting Business.