On October 17, 2002, at 1545 central daylight time, a Bell 206L-1 helicopter, N303CH, was substantially damaged when it landed hard following a loss of control near Edinburg, Texas. The helicopter was registered to and operated by Central Helicopter Service Inc., of Houston, Texas. The commercial pilot and three passengers were not injured, and one passenger sustained a serious injury. Visual meteorological conditions prevailed, and a company visual flight rules (VFR) flight plan was filed for the 14 Code of Federal Regulations Part 135 on-demand air taxi flight. The cross-country flight originated from a staging area near the Schlitterbahn Water Park, South Padre Island, Texas, and was destined for a staging area at the Pan American University, Edinburg, Texas. Witnesses reported that the helicopter approached the staging area in Edinburg and was heading south during the final approach. According to the pilot, during final approach, approximately 20 feet agl, he "ran out of pedal," and the helicopter started spinning to the right. The pilot stated full left pedal was applied to stop the turn; however, the rate of turn continued to increase. The pilot attempted to gain forward airspeed; however, was unable due to surrounding obstacles (to the left was a building, to the left front was a running track with bystanders, to the front of the helicopter was a four story building, and to the right was a parking lot with bystanders). Subsequently, the helicopter landed hard and came to rest upright. The pilot stated that there was no mechanical malfunction of the helicopter. At 1553, the weather observation facility at the McAllen Miller International Airport, McAllen, Texas reported the wind from 150 degrees at 13 knots. The pilot reported that the wind was from 120 degrees at 12 knots. According to an FAA Inspector, who examined the helicopter, the skids were spread, the belly was structurally damaged, the tailboom was bent downward, and the tailrotor blades were damaged. The inspector established flight control continuity for the tailrotor drive system.