Irvine’s top city hall executive has confirmed the Orange County District Attorney’s office is asking questions about how the local chamber of commerce managed the city’s hotel advertising campaign.
The revelation comes amidst claims by hoteliers that the Greater Irvine Chamber of Commerce leaders used the money to subsidize the organization’s operations.
“We got a public records request from the DA regarding the Destination Irvine stuff,” said Irvine city manager Oliver Chi in an interview.
The questions come just as Bryan Starr, the chamber’s President and CEO, quietly quit over the holidays, leaving a position he held for the past seven years according to a letter from the Chamber to its members on Jan. 8.
“Bryan Starr informed us that he would be leaving the Chamber in January to pursue a new opportunity,” chamber staff wrote. “We look forward to seeing the impact Bryan will have in his future role and wish him well.”
Starr referred reporters to the Chamber’s spokesperson, who declined to comment on what new opportunity Starr was seeking and referred reporters again to Starr’s departure letter.
Where Was the Tourism Advertising Going?
Starr has been facing questions from hoteliers and other members of the Chamber for over a year given his handling of Destination Irvine, the city’s tourism bureau that advertises events in the city and encourages people to spend in town.
Tony Zand, general counsel for the Pacific Hospitality Group and one of the board members overseeing the city spending, said while it was unclear how the chamber was managing it to him, they suddenly had a lot more money once the city stepped in.
“It seemed like there was a lot more money for us as a group to spend promoting Irvine,” Zand said in an interview. “We had a bigger budget, we were able to hire another person and do other stuff.”
The advertising is funded through a special tax on hotels collected by the city’s hotel improvement district, which is then funneled into an account, generally providing around $3 million each year.
But hoteliers discovered most of that money wasn’t actually going into advertising, with over 60% of it being channeled directly to the chamber itself as an overhead fee.
With growing questions over how the money was being spent, the Irvine Hotel General Managers Group’s members unanimously asked the city to step in last March, removing the chamber and having the city and hoteliers take over the tourism advertising program.
Hoteliers and City Take Over Management
Now, a panel of four hoteliers and three city representatives oversee the fund, and in their first meeting this last July they provided a complete breakdown of the program’s funding and where it would be spent.
For a copy of the budget, click here.
At the July 18 meeting, Chi acknowledged that it wasn’t 100% clear where the chamber had spent the money in the past, and said they were still trying to get ahold of their budgets.
Chi told Voice of OC the city was able to double the money being spent on marketing overnight by just cutting down on overhead.
“When it was with the chamber, the chamber was allocating a little over a million bucks a year to the function, but when we took it over we charged a lower overhead fee,” Chi said in an interview. “We increased (spending) to two and a half million dollars.”
Starr’s departure also came as the District Attorney’s office started asking questions about his work with Destination Irvine, the city’s tourism bureau that until last year was managed by the Chamber.
Chi confirmed the city has received a records request from the local DA, asking for details on how money was spent from the Destination Irvine program while it was being overseen by the chamber.
DA spokesperson Kimberly Edds did not respond to requests for comment on whether or not prosecutors were planning to bring a case against the chamber or Starr.
When asked if the Chamber had been asked by the DA for any records, spokesperson Laura Perdew declined to comment.
Zand said working with the Irvine – instead of the chamber – forced a lot more transparency and engagement from the business community.
“When you’re working with a government committee there’s a bunch of oversight,” Zand said. “We at least are far more engaged, more in the past six months than we were in the prior 10 years.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
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