Speed of Anaheim’s Stadium Sale Proposal Raising Concerns

SPENCER CUSTODIO, Voice of OC

Fans gather at Angel Stadium on Aug. 14, 2019 to watch the game against the Pittsburgh Pirates.

Anaheim City Councilmembers could vote to start selling the Angel Stadium land faster than deciding whether to name the second Monday in October Indigenous People’s Day. 

The stadium sale proposal was first made public Dec. 4 and the Council votes on it today, 16 days after the announcement. The Council hasn’t publicly discussed the sale proposal or voted on any stadium deal negotiation components. 

Meanwhile, Councilmembers said they need more time to research an Indigenous People’s Day proposal, which was submitted by the city’s Cultural and Heritage Commission, before voting on it. During this past Tuesday’s public city council meeting, the Council pushed the idea back until Jan. 14, giving it 28 days to figure it out. The city currently doesn’t list Columbus Day on its recognition calendar

The stadium purchase agreement under consideration Friday during a special meeting scheduled just ahead of the Christmas holiday next week, calls for a series of payment installments on a $325 million stadium starting price tag and the sale won’t close until 2025 — with the city or Moreno retaining the ability to walk away from the sale anytime before closing.

However, the city won’t immediately see any of that money because the payments would be tied up in an escrow account. If the land sale is called off, the money will have to be paid back. 

The $325 million price tag could be significantly lowered when the Council hammers out development, community benefit and labor agreements with the shadowy company buying the 153-acre land, SRB Management, next spring. 

Assemblyman Tom Daly (D-Anaheim), a former mayor, and Sen. Tom Umberg (D-Santa Ana), sent a letter to the City Council Thursday criticizing parts of the stadium sale proposal and urging the Council to postpone its decision until more details are hammered out. 

“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. 

An Orange County Register editorial published Wednesday hammered Anaheim’s stadium sale proposal for moving too quickly and lacking details. 

“This is Anaheim’s largest real-estate asset, so the council’s decision will create a blueprint for the city’s financial future. Such a big decision requires a thorough public vetting — and the release of detailed information. The buyers — a partnership including Angels owner Arte Moreno — should also disclose the names of all the partners,” wrote the editorial board. 

Moreno is the only known member of the shadowy LLC company, which was formed Nov. 20 in Delaware, five days after stadium negotiations officially kicked off. 

Although city officials said the agreement will keep the Angels in Anaheim for at least 30 years, there’s nothing in the land sale agreement binding the team to stay, only a statement indicating a separate agreement would be made to keep the Angels in the city. Angels Baseball isn’t on any of the signature lines in the sales proposal, either. 

“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,” reads the sales agreement. 

It’s unclear how such a commitment agreement, one that on its face has nothing to do with the price and terms of payment for the land, could have legally been negotiated in closed session – something that public records specialist attorneys, like Kelly Aviles – who is Voice of OC’s chief litigator – have already raised concerns about

The commitment agreement is also expected to include five-year extension periods of up to 25 years to play in Anaheim, along with maintenance standards. 

Leading up to the Friday meeting, former Mayor Tom Tait and Daly published an opinion article on Voice of OC Tuesday criticizing the sale agreement because the $325 million starting price tag could be lowered.

Daly and Tait also expressed concern about the lack of details and the information that’s public is “stunningly one sided against Anaheim taxpayers” and noted the absence of any commitment to name the team after Anaheim. 

Like the Register’s editorial board, the two former mayors blasted the lack of details. 

“That $325M is the maximum value that the city could theoretically receive. Any ‘community benefits’ will be deducted from that amount. ‘Community benefits’ are only vaguely defined, and will most assuredly reduce the final sale price by millions of dollars, possibly hundreds of millions. There is no limit on this loophole, and the people of Anaheim will be paying the price,” wrote Daly and Tait. 

Others have hailed the stadium sale as a win for taxpayers in recent OC Register opinion articles. 

President of the Orange County Business Council, Lucy Dunn, called the sale proposal “a good, old-fashioned grand slam home run.” in a Thursday opinion article

Dunn also said it will relieve Anaheim from its stadium maintenance obligation and increase revenue to the city.

“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 and quoted a scene from the movie “Field of Dreams.” 

“Field of Schemes” author Neil deMause, a Brooklyn-based reporter who’s covered stadium deals across the country for over 20 years, said the stadium sale proposal lacks too many details. 

“We’re coming down to the wire here on a decision being made and it seems like there’s just more and more questions about the deal and whether it’s a good one for Anaheim. It seems like it would make sense to hold off a few weeks or months to make sure that the numbers actually add up, deMause said. 

He also questioned the Angels’ economic study. 

“Coming up with a number is way easier than coming up with a good number. So we’re seeing a lot of numbers and the question is are they legit? Or are they just something the proponents came up with?” deMause said. 

Orange County Taxpayer Association President Carolyn Cavecche praised the sale proposal in a Saturday 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.

Sidhu was on the city’s negotiating team that brought the stadium sale proposal to the Council. He also reinstated the lease, which locks the Angels in to the stadium until at least 2029 if the team doesn’t opt out before Dec. 31 — there’s also a letter waiving the team’s opt out right if the Council approves the land sale agreement. 

The stadium land appraisal released Dec. 4, the same day as the land sale was announced and less than three weeks after negotiations between the city and ball club officially started. The appraisal was revised Dec. 3 and no specifics were given on how the evaluating firm arrived at those numbers. 

OC Register business columnist Jonathon Lansner wrote a Wednesday column and said 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.”

Nearby land sales indicate the stadium land’s starting price could be low, although the 14-acre LT Global property on the corner of Orangewood Avenue and State College Boulevard sold for $32 million at roughly $2.3 million an acre in August.  

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 $2.1 million-per acre cost Anaheim’s starting price for the stadium is. The apartments sit right next to the Orangewood Avenue side stadium parking lot. 

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.  

Correction: An earlier version of this story incorrectly listed Assemblyman Tom Daly as a state senator. We regret the error. 

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