Anaheim City Council Not Worried About Total Cash Value For Angel Stadium

SPENCER CUSTODIO, Voice of OC

The entrance to Angel Stadium at the Angels vs Cleveland Indians game Sept. 9.

Anaheim City Councilmembers aren’t worried about the final amount the city will get in the Angel Stadium land sale, despite questions about how much the $325 million starting price could be reduced. 

After having nearly all year to negotiate, the city didn’t formally start talking with the Angels until Nov. 15 and the land sale proposal was made public Dec. 4. Millions could be shaved off the $325 million price tag once community benefits and workforce agreements are negotiated next year.

“Information is everything. And we would be irresponsible to approve any agreement before the following issues are resolved,” said Councilwoman Denise Barnes, referring to the final price, and who the city is selling the land to.

Mayor Harry Sidhu said the city is selling the land for the maximum value. 

“For those who are saying the land is worth more than $325 million, today is the moment of truth. We cannot see a value of $500 million, as some have said, and have baseball. We can only see that kind of value with no stadium, no Angels and many more buildings on this land. It comes down to a simple question: Do we want to see baseball continue in Anaheim or not?”

The Angels are expected to stay until at least 2050 as part of the land sale, but the proposal doesn’t have a commitment. Instead, it states a commitment will be made next year.

“Seller and Angels Baseball shall have entered into a separate mutually satisfactory agreement (the “Angels Commitment Agreement”), effective upon Closing, that is contemplated to address: (i) the commitment of Angels Baseball not to relocate and to play its home games at the Stadium or at a replacement stadium through the 2050 baseball season,” states the agreement.

The Dec. 20 meeting was the first time the City Council was able to publicly discuss details about the proposed land sale agreement, which may not close until 2025, according to timelines provided by the city. The meeting ran for roughly 8.5 hours, including over four hours of Council deliberation.

SPENCER CUSTODIO, Voice of OC

A member of the public addresses the Anaheim City Council at its special Dec. 20, 2019 meeting to discuss the Angel Stadium deal.

The City Council voted 4-2  to approve the land sale agreement, with Barnes and Councilman Jose Moreno dissenting, who is unrelated to Arte Moreno. Councilman Jordan Brandman was out sick.

Angels baseball isn’t buying the land, instead it’s SRB Management, a company formed in Delaware Nov. 20, five days after negotiations began. Angels owner Arte Moreno is the only known person on the business and city staff said he’s the controlling interest in the company, despite not having written details on it. 

“This is all I keep hearing — who are we dealing with?,” Barnes said. “We have no idea who SRB Management is … just give me some information, please. He has refused to disclose the identity of other partners. You gave me no choice. As a public agency, we must assure the public that there is no conflict of interest in this public deal.” 

Most of the questions raised in recent weeks were answered during the meeting, including the final sales price,  more economic studies and the rush to get it done before the close of the year.

Jose Moreno kept asking how much the final price could be reduced.

 Negotiation consultant Kevin Kelley said the city won’t lose value, but the cash could be lowered.

“So, you’re not reducing the value you’re getting You’re just choosing the form you’re getting it in,” Kelley told Jose Moreno.

The sales agreement has no indication how much could be taken off the $325 million price tag. 

Nearly 80 people spoke during public comment, including Angels representatives, building trades representatives, Anaheim Chamber of Commerce members and residents.

Many residents were against the deal for lack of details and numerous people wanted Anaheim back in the team name. 

“We’re here for you. This agreement is important. Like I said, it keeps us here,” said Angels Chairman Dennis Kuhl “That will attract baseball fans, visitors and residents for decades to come.” 

But Angels President John Carpino said putting Anaheim back in the team name is not possible after Councilman Jose Moreno unsuccessfully tried to direct the city’s negotiating team to iron it out with the Angels during next year’s negotiations,

Echoing concerns expressed by former city leaders leading up to the meeting, Barnes said she was concerned the city was moving too fast.

“What’s the rush? This is the first proposal offered by the Angels more than a month ago. We have been waiting 11 months to get our hands on this. This is wonderful to embrace, but the game changed. The Angels have had since 2013 to change their options. Residents were only given a two weeks notice,” Barnes said. 

She attempted to postpone the land sale agreement until the other members of SRB Management are disclosed, an exclusive negotiating agreement is made with Arte Moreno and a second appraisal is conducted.

“This is an incomplete proposal. I would like to move to postpone,” Barnes said. “Until we have a complete proposal.”

Only Jose Moreno supported her proposal.

He also asked  Sidhu about specifics in the negotiations and the sale agreement. Sidhu got himself appointed to the negotiating team, consisting of City Manager Chris Zapata and City Attorney Rob Fabela. 

Besides the name being discussed at least three times with the Angels, Sidhu didn’t offer many more details that weren’t already in the land sale agreement and referred the questions to city staff.

Jose Moreno also pointed to a letter from Assemblyman Tom Daly (D-Anaheim), a former mayor, and state Sen. Tom Umberg (D-Santa Ana).

The two state legislators criticized the proposal for not being at market value and urged the Council to postpone the vote until more details could be ironed out, including what the minimum price tag could be.

“Without knowing the final terms and conditions of the eventual sale, including the role the City will play in shaping the development of the land, how can the taxpayers of Anaheim know if the proposed sale achieves the maximum financial value for the City,” the two lawmakers wrote.

The agreement doesn’t spell out the location of the stadium.

The 1996 lease states the Angels “will change the name of the Team to include the name ‘Anaheim…”

 The city sued the team for its name change to Los Angeles Angels of Anaheim in 2004, but eventually lost the lawsuit. Although Anaheim has been dropped from the name on the website and on television and radio broadcasts, Angels representatives have said the team name is still the Los Angeles Angels of Anaheim.

During the lawsuit, the city had a report conducted on advertising losses to the city. Laren Ukman from IEG Sponsorship Services projected the city would lose nearly $100 million in marketing value from 2005 to 2016. If the team had made the playoff series at least six of those years, Ukman estimated the city would lose $191 million during that time. 

Since the price could change based on what’s negotiated next year, Jose Moreno said the city should shoot for nearly $540 million. He proposed cutting the required parking spots to roughly 6,800, using an evaluation in the appraisal, to get that price. He also proposed adding more money to the price to recoup for the marketing Anaheim lost when the Angels changed its name to make up for time since the name change and the next 30 years. 

His proposal was only supported by Barnes.

Sidhu said the original proposal provides “fair market price for land, money for the neighborhoods, ongoing revenue and community benefits including affordable housing, parks, jobs for Anaheim.” 

Orange County Register business columnist Jonathon Lansner wrote in a Dec. 18 column the stadium’s starting price isn’t at fair market value because the city didn’t put it on the market.

“But the real reason the seller of the Monarch Beach Resort and Mike Trout both got big dollars is they employed a tactic the city of Anaheim did not: real market pressure,” Lansner wrote.

“Yes, the resort was quietly shopped without much fanfare. And Trout’s latest contract was negotiated outside the glare of high-profile free agency. The prospects of other suitors, even theoretical, pushed those final prices higher, no doubt. The city talked only with Moreno.” 

Anaheim resident and longtime real estate broker Paul Kott also told the Council the starting price tag isn’t at fair market value. 

“It wasn’t an open sale. It wasn’t a competitive market. It was appraised for one buyer, one purpose. This in no way is fair market value. This fails the test,” Kott.

Kott’s colleague, Wally Courtney, also echoed similar concerns.

 Sidhu shot back at Kott and Courtney during council deliberations.

“The two of the real estate agents, they have never sold an appraised stadium in their lifetime. And here we have an expert,” Sidhu said, referring to a hired consultant.

This is also Sidhu’s first time negotiating a public stadium deal because he wasn’t on the Council during the 2013 negotiations.

Councilmembers Steve Faessel and Lucille Kring defended the sale proposal and referred to a Dec. 19 opinion piece written by the President of the Orange County Business Council, Lucy Dunn.

“For the next decade, this deal is projected to generate $20 million a year or more for Anaheim. Coming at a time when Mayor Sidhu has announced ambitious plans to invest in rebuilding Anaheim’s neighborhoods, the city will have the ability to fund these community projects with new revenues,” Dunn wrote.

 The $20 million projection she used comes from a study commissioned by the Angels.

Angels Baseball is also listed as an investor on the business council’s website.  

Dunn didn’t mention the $325 million price tag or that it’ll be lowered from the expected community benefits agreement.

Orange County Taxpayer Association President Carolyn Cavecche also praised the sale proposal in a Dec. 13 opinion article published by the Register. 

“Appraisal of the stadium area showed the market value between $300 million to $320 million and would allow development of entertainment uses, hotels, office space, retail, and apartments. The price negotiated is just above the highest valuation,” Cavecche wrote.

Cavecche didn’t note the price will be lowered depending on the community benefits negotiated.

The taxpayer association and business council both endorsed Sidhu for mayor in his 2018 campaign. Dunn is listed the association’s board of directors, along with Councilman Trevor O’Neil. 

“Given this discussion this evening, we have to ask ourselves who do we represent. Do we represent Arte Moreno, we represent the Angels? Who do we represent?” Jose Moreno said,

“Now, in a deal of this magnitude, we expect criticism, but most of that criticism tonight has been refuted, and what remains will be worked out in the development agreement that will follow in the coming months,”O’Neil said.

“Some just don’t want to believe the facts behind the economics. Some are political opponents who simply want to obstruct this council from achieving a win for the city,” he said.

 Meanwhile, city staff and hired consultants said the $325 million reflects the value based on the parking restrictions due to the lease. 

The lease was reinstated in January after Sidhu brought the idea to the Council, tying up the land until at least the end of this year or until 2029.

The 3.8-acre land that was eventually developed into the George Apartments sold for $17 million in 2014, which is nearly $4.5 million an acre, more than double the per-acre cost Anaheim’s starting price for the stadium is.

The nearby 6.48 acres that’s now the Gateway Apartments sold for $22.6 million in 2012, at nearly $3.5 million an acre. And the 3.72-acre condo land across the street on State College Boulevard sold for $30 million in 2005, or $8.06 million an acre.

 Spencer Custodio is a Voice of OC staff reporter. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.