Rent payment questions dates back to first two years of the COVID-19 pandemic
The San Diego City Council voted to sue the theme park Sea World on Monday for not paying nearly $10 million in back rent accrued during the COVID-19 pandemic.
This article was written by Evan Symon and originally published by the California Globe.
During the pandemic, like most theme parks, Sea World completely shuttered the park in 2020 with a slow reopening to full strength beginning in 2021. While the park did begin paying lease payments once again later that year, they claimed that they didn’t have to make minimum payments during the pandemic, as they were collecting no revenue because of the mandatory closure. However, San Diego city officials fired back that neither the lease nor city law said that they didn’t have to pay the lease during this time.
Last year, the city auditor of San Diego found that the park owed $9.7 million in unpaid rent during 2020 and part of 2021, as well as an additional $12,000 for the audit. The city also added that Sea World wasn’t a special case, and like any place affected by the pandemic, they would need to pay the city for the lease regardless.
Sea World, however, continued to refuse to pay. The final straw came during the latest quarterly revenue reports, showing Sea World reporting a record revenue of $293.3 million, up during the same quarter in 2019 before the pandemic by 33%. With Sea World making record profits and still refusing to pay, the city finally took action on Monday, with the City Council voting to bring the theme park to court in a unanimous 8-0 vote.
Council members fumed at the park during the meeting, calling the park refusing to pay despite having profits over 29 times what is owed during a single quarter alone “greed and arrogance.”
SD City Council votes to sue Sea World
“Despite publicly touting record revenues as recently as last week, SeaWorld continues to refuse to pay the over $12 million they owe the City in past due rent, penalties, and interest,” said City Council President Sean Elo-Rivera in a statement on Monday. “I’m glad the City has drawn a line in the sand and is demanding SeaWorld pay us what they owe us. Multibillion dollar corporations do not deserve special treatment and the millions of dollars SeaWorld is wrongfully withholding from the City could greatly benefit the people of San Diego. It’s time for SeaWorld to pay up.”
City attorney Mara W. Elliott added, “SeaWorld’s greed and arrogance are offensive, and the City will hold it accountable.”
Legal experts told the Globe on Tuesday that the question of Sea World paying the city nearly $10 million in back rent will all come down to what the lease agreement said and if any agreement was made during the pandemic regarding the amount.
“Both San Diego and Sea World are keeping their cards close to their chest,” said lawyer Karl Hollister who has represented theme park in suits in the past, in a Globe interview. “It’s true that the closure was out of their hands during the pandemic and that the park, due to having many live animals and maintenance expenses, did need to spend money during that time. But the big questions are what the lease says, what the laws say, and if there was any sort of agreement made during this time regarding lease payments.”
“Usually in these matters things are settled relatively quickly, but there are a lot of unknowns in this case right now, so we don’t know. Sadly, there are often political ramifications whenever money gets involved. Disney and Florida are kind of at war over their parks in that state right now in something that could hurt [Florida Governor Ron] DeSantis in the future politically. And other parks in the past that had money problems often become focal points in local and state politics, especially when a park closes and the land suddenly becomes an issue. Hopefully this Sea World scuffle is solved quickly before it starts affecting elections.”
As of Tuesday, the suit has yet to be filed, with the City Council only having given authorization for a lawsuit.