What Is the Actual Value of the Angel Stadium Deal?

As the city of Anaheim and the Los Angeles Angels of Anaheim sit down to negotiate a new stadium lease, there’s a fundamentally difficult question to answer at the outset:

How does the city place a hard dollar figure on what the public could be giving up or getting in return?

There seems to be little agreement on the value of the land and the stadium.

There are no publicly available studies to show how much tax revenue the city would reap under the proposed deal that would allow Angels owner Artie Moreno to develop the 155 acres around the stadium. In contrast, there’s no estimate of how long the land would lie fallow under alternative scenarios.

“This is a very complicated deal. We don't know enough right now. We don't have enough to make a valid statement,” said Mark Rosentraub, an economics professor at the University of Michigan who specializes in sports stadiums.

In a 4-1 vote earlier this month, the City Council approved a framework for negotiations that grants Moreno the land around the stadium for 66 years at $1 per year.

The idea is that Moreno could use revenue from development of the property — which is entitled for more than 5,100 residential units, 3 million square feet for office space and 3 million square feet for commercial space — to finance up to $150 million in improvements for the stadium. And Moreno would be allowed to drop "Anaheim" from the team's current name, Los Angeles Angels of Anaheim.

The City Council majority also gave Moreno nearly three more years to decide whether to quit the stadium and move to another city. The council majority said that without the additional time, Moreno might panic and act irrationally during negotiations on a long-term lease.

However, Mayor Tom Tait, who cast the only dissenting vote, and academic experts who study stadium deals, said that by allowing Moreno more time to organize a credible threat of moving, the city gave away key negotiating leverage.

Tait argued that the proposed deal is lopsided. Moreno is already required to make the renovations under the current lease, Tait said. The city isn't getting anything more than it already has, yet it is giving away land and a stadium that has a combined replacement value approaching $1 billion.

If anything, the city would lose not only land but also community pride, because Moreno could keep "Los Angeles" and drop "Anaheim" from the team's name.

“A reasonable compromise would be if the Angels drop Los Angeles, and we drop Anaheim, and change it to something that includes Anaheim, like California Angels, or Southern California Angels, or Orange County Angels,” Tait said.

“The other part would be a joint venture where we put up the land, and the we split the profits, 50-50, or some sort of reasonable split, where the taxpayers get something out of it … something commensurate with putting up real estate worth hundreds of millions of dollars. … That's what a reasonable deal would be. It could be a win for us and a win for them.”

Other council members didn't return phone calls seeking comment. The only official the city would make available for an interview spoke on condition of anonymity.

That official took issue with Tait's arguments, saying the stadium has a direct economic impact to the city of over $100 million along with indirect impacts that add up to $206 million.

The official also said the redevelopment of the land around the stadium could result in an economic boom, citing AT&T Park in San Francisco, home of the Giants, as an example where the surrounding area blossomed with development after the stadium was built.

While voters in San Francisco refused to pay for a stadium, the city contributed some infrastructure improvements.

The official also said that the Angels' control of parking around the stadium also poses a challenge to other developers. They would have to construct expensive, multilevel parking structures to support other buildings.

The official said that estimates on the amount of tax revenue that could be generated by Moreno developing the land can't be made until developments are proposed. The city is contemplating rebating some, perhaps all, of the tax revenue back to Moreno.

Two city studies estimate the value of the land ranges between $30 million and $240 million and between or $150 million and $380 million.

The lower end of the range is the value of the land in a bulk sale, while the higher values would apply if the city carved up the land and sold it as parcels. Other factors include improvement of economic conditions, according to the city official and documents provided by the city.

Tait said that the value of the stadium, parking lot improvements and the city venue known as the City National Grove of Anaheim must be added to the total figure in order to know the full value of the subsidy.

Tait says the stadium's worth is what it costs to build a new stadium. For example, San Diego's Petco Park was built for $457 million.

A city official refuted that claim, saying that the value of the stadium to the city is approximately $80 million and is lower because its uses are limited. But Tait argued that the city has to look at what it would cost for Moreno to replace the stadium.

Victor Matheson, an economics professor at the College of The Holy Cross in Massachusetts who specializes in sports, says that Tait has a good point.

He said Moreno would have to find upwards of $800 million to build another stadium somewhere else, placing the city “in the driver's seat” on the negotiations.

“There is no doubt that the mayor is correct, that whatever is being offered by the city of Anaheim is going to be a good deal for the Angels …," Matheson said. "They will probably have a hard time finding a better deal elsewhere. That is absolutely right.

“Given the fact that it's so expensive to build a stadium elsewhere from the ground up, it's unclear why the city of Anaheim thinks it needs to sweeten the pot for the Angels, given the fact they have a stadium up and ready to go.”

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek

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