The Los Angeles Angels of Anaheim could soon drop hometown Anaheim from its brand altogether, under a newly proposed lease.
Just as most of Orange County winds down for the Labor Day holiday weekend, Anaheim City Council members are gearing up to approve Tuesday night a proposed stadium lease framework that would give the Angels full authority over the team name.
(Click here to read the proposed lease framework.)
The deal will likely bring back sour memories for Orange County residents who felt duped by Arte Moreno, who after purchasing the team in 2003 added Los Angeles to the moniker.
Stadium lease terms now require the team brand to contain the word “Anaheim” but doesn’t specifically prohibit adding another city. Moreno won a 2006 court battle when the city alleged in a lawsuit that the name change violated the “spirit” of the lease.
Beyond full naming rights over the team, franchise owners under a proposed framework for negotiating a separate land lease would also get a 66-year lease of the stadium land, including a 50-acre parcel called the “Stadium District,” for $1 per year.
Under that arrangement, the city would be freed from spending about $600,000 annually for stadium upkeep, according to a staff report.
The land lease outline being considered next week could allow team owners to keep all tax revenue, such as hotel room taxes and sales tax generated from developing the area.
The land around Angel Stadium is estimated to be worth $300 million.
With the land lease, the owners could develop a range of tax revenue generating businesses, including hotels and shops.
Anaheim Mayor Tom Tait said that having Anaheim in the team’s name is the major benefit for the city in the current lease. He lamented that it could now be lost.
“The deal in 1996, which I voted against, the big benefit of that deal was getting the name,” said Tait. “The city lost much of that in the lawsuit and the rest of it in this deal. And again, what do we get in return? Where’s the benefit to the Anaheim taxpayer?”
A staff report claims otherwise, citing up to $213 million in “economic impact” to the city that could be lost if the Angels move.
Council members have been negotiating new stadium lease terms in theory, because the Angels’ current lease allows the team to leave in 2016. Unless the team quits at that time, it is locked into staying until 2029.
Tuesday’s proposed extension, however, would move the deadline for the out clause to 2019, offering the team more time to relocate if it chooses. It also gives up city leverage in negotiations.
If the council approves it on Tuesday, the lease extension would be effective that night.
Other deal points, such as the land lease and naming rights, are still subject to negotiations and have to return to the council for a final vote.
Tait said that the deal so far is one-sided and, coming on the heels of the Labor Day weekend, doesn’t give taxpayers a fair chance to evaluate the deal and participate.
“This makes no sense financially for the city or the taxpayer,” Tait said. “At the very least, it shouldn’t be voted on, and we should give the Anaheim residents and taxpayers a chance to weigh in.”
Other council members and the Angels’ ownership could not be reached immediately for comment.
Tait’s stance on the deal almost certainly means another pitched battle between the isolated mayor and the council majority, which is supported by Disneyland and other elite business interests, including the Angels, over the diversion of city assets and tax revenue to the politically connected.
Earlier this year, the council majority approved a $158-million tax subsidy for the developer of two high-end hotels near the GardenWalk outdoor mall. And in a legal settlement, the council also granted the mall’s owners 30 percent of its sales tax revenue the first fiscal year and up to 50 percent for 25 years.
The council majority has argued that such deals would create businesses like the planned four-star hotels, secure revenue in the long term and generate economic activity and thousands of jobs during what has been a slow recovery.
Yet others, including the mayor, hotel market analysts and Latino activists, have argued that the deals are unnecessary giveaways. Hotel investment experts say that subsidies of the GardenWalk hotels won’t be necessary in one to two years, and the city could keep the massive tax revenue streams if it simply waited.
Meanwhile, Latino activists have said that business subsidies mean a lack of services for working-class neighborhoods.
Activists and the mayor have cited two Anaheims, one that is subsidized heavily for middle-class and affluent residents and another that is largely Latino, underserved and struggling with the social impacts of low-wage jobs in the city’s giant tourism industry.
The current lease, signed in 1996, had Disney, the former team owner, contribute $80 million toward stadium renovations. The city chipped in $20 million, plus another $10 million with the transfer of a large billboard along the 57 freeway.
Under the proposed lease, the cost for about $150 million in renovations would remain with the Angels, but revenue from the ground lease, including diverted tax revenue, would be used to pay for the upgrades.
Other revenue sharing parts of the current lease remain largely intact under the proposal, with tweaks in favor of the team’s owners.
For example, the city under the current lease can collect $2 for every ticket above 2.6 million sold. The proposed deal increases the threshold to 3 million tickets by no later than the baseball season beginning in spring 2021.
Please contact Adam Elmahrek directly at firstname.lastname@example.org and follow him on Twitter: twitter.com/adamelmahrek
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