As questions about transparency and cronyism swirl, Huntington Beach leaders are divided over the handling of a brand management and marketing contract aimed at revamping the city’s merchandising and licensing systems.
In a long and at times acrimonious meeting this week, council members delved into the procurement process for a two-year, $720,000 contract the city drew up with Wolffhaus, a local firm described as “part brand incubator, part strategic operator.”
The council pulled the proposed agreement at its April 7 meeting amid public pushback and instead decided to put out a request for proposals. The bidding period for a contract closes Monday, April 27.
This week, a City Council majority moved to form an ad hoc committee to evaluate bids for the contract and select a winner. Mayor Casey McKeon nominated councilmembers Butch Twining and Don Kennedy to the committee, with Councilmember Pat Burns to chair it. Councilmember Andrew Gruel was nominated as well, but declined, saying he preferred to discuss the matter on the dais.
Gruel, along with councilmembers Chad Williams and Gracey Van Der Mark, opposed establishing the ad hoc.
Much of the discussion at this week’s council meeting revolved around why Wolffhaus, led by founder and creative director Tyler Wolff, was the only firm considered for such a sizable contract. Williams brought up conflict-of-interest concerns between Wolff and McKeon that several residents have raised over the past several weeks. Wolff’s Facebook page revealed that he’s engaged to McKeon’s appointee to Huntington Beach’s Community and Library Services Commission.
McKeon denied any claims of cronyism, saying he simply believed Wolffhaus to be the most qualified vendor to help resolve “structural budget issues” the city is experiencing, starting with trademarking the Surf City logo as a source of revenue.
“There’s not a lot of proposals to bring in revenue, from what I’ve heard, outside of a sales tax or property tax,” McKeon said.
The city paid Wolffhaus $30,000 earlier this year to perform an audit of its “creative, brand, media, press and digital ecosystem.” The 38-page report found that Huntington Beach is losing $2 million to $5 million a year from events, licensing and tourism revenues, partly due to media coverage that too “often centered on conflict” and controversy rather than positive community-driven stories.
The issues outlined in the audit formed the basis of the brand management contract that was proposed. The chosen firm will be expected to create a city-controlled merchandising program and establish a film and digital media office to attract Hollywood production crews to Surf City. The company would also be expected to help the city develop a city-run internship program for high school and college students.
Williams posed several questions about the Wolffhaus audit: Who decided on the $30,000 payment? Was Wolffhaus responding to posted opportunities put up by the city, or did he offer his services to McKeon?
Referencing a general lack of transparency, Williams proposed unsuccessfully that the council terminate or restructure the contract bidding process. Gruel questioned why the city is pushing through a multiyear brand management contract without assessing whether such rebranding or marketing services are needed.
“The reality is we’re rushing through this process,” Gruel said. “We should have had a study session as to this need to begin with and how much we want to budget for it.”
McKeon said the city needs “fresh ideas and creative ideas to bring in revenue” and challenged Gruel to come up with his own proposal.
“I’m not going to consider hypotheticals and platitudes,” Gruel said in response.
Kennedy urged that the city move forward with the contract — whether it’s awarded to Wolffhaus or another firm — saying it is a great opportunity to generate revenue for the city.
“This process, although sloppy and created a lot of false senses of cronyism,” Kennedy said, “has now gotten us to a place where we all agree we need revenue and better communications.”