Jetpack America, which fought for nearly a year to secure permission to continue strapping water-propelled jetpacks onto customers so they could fly high above Newport Harbor, says it will shut down operations in the city next month.
Jetpack America President Dean O'Malley said he made the decision to leave Newport Beach because of what the company considers overly restrictive conditions on its permit.
Nov. 13 is expected to be Jetpack America's last day in the harbor, he said. It will continue to operate in Las Vegas and San Diego.
"The cost of operations simply cannot be covered by the revenue we're able to bring in" in Newport Beach, O'Malley said. "This stems from the fact the city has placed very tight restrictions on our operation."
O'Malley said he had hoped that after a year of good operations, the company would have a chance to revisit the regulations when it applied to renew its permit in November. However, city staff did not seem receptive to loosening the restrictions, O'Malley said.
Harbor Resources Manager Chris Miller said staff is simply executing what the City Council asked.
"This was all done in an effort to balance the needs of Jetpack America and the needs of the harbor community and the neighbors," Miller said.
Jetpack America has operated water jetpacks in Newport Harbor for five years. The backpack-style devices use seawater to propel riders into the air while tethered to an instructor's watercraft via a long hose.
Newport officials years ago considered banning the activity in the harbor after fielding noise complaints from some waterfront homeowners.
In June 2014, the City Council agreed to a six-month moratorium on permits for such businesses while the Harbor Commission studied the issue. The commission eventually recommended banning the activity.
But in May 2015, the council instead approved an ordinance allowing one jetpack business in the harbor. The operator would have a year-to-year revocable permit, with operations limited to the turning basin between Lido Marina Village and West Coast Highway.
The city ultimately selected Jetpack America over two other applicants.
However, the permit included additional requirements such as increased insurance coverage, a restriction on operating hours and a limit to one jetpack in the harbor at a time.
Before those restrictions, Jetpack America would operate two jetpacks at once to keep up with customer demand during busy summer months, company spokesman Eric Longabardi said.
"The restrictions made it impossible for us to turn a profit," he said. "They've essentially regulated us out of business."
Miller said there are no plans to open a request for proposals for another jetpack operator to move into the harbor.