A state housing agency is warning Anaheim that it potentially violated the state surplus land law when it sold the 150-acre Angel Stadium land last year, which came as a surprise to at least one council member. 

“I knew nothing about the inquiry from the state until this morning until we got an email from the city manager,” City Councilman Jose Moreno said in a Thursday phone interview. 

The state Department of Housing and Community Development sent a letter April 28, warning the city may have violated the Surplus Land Act with the stadium sale.

“I’m upset that apparently this letter came at the end of April from the state and that as a council member, I knew nothing about it and our city was preparing a response about such a high profile issue, high stakes issue,” Moreno said. 

The act requires low and moderate income housing be prioritized for public land that’s for sale.

Moreno, who’s been a chief critic of the land sale, added that issues like these are routinely brought up in closed session reports because it could expose the city to “potential litigation.” 

But that didn’t happen, Moreno said. 

Instead, he learned the details of the letter through a Los Angeles Times article, which broke the story.

“I’m hopeful city staff have a rationale for this,” Moreno said.

City officials didn’t respond to questions about whether the whole council was made aware of the housing department letter or not.

The revelation on Thursday marks another chapter in the stadium’s land sale process that’s been marred by secrecy and a lawsuit. 

A group of Anaheim residents sued the city last year for allegedly violating the state’s Brown Act, a law aimed at more transparency in local governments. 

The lawsuit is looking to overturn the land sale vote and have Anaheim City Council members redo the entire process in public.

[Read: Did Anaheim Council Members Know About Stadium Sale Proposal Beforehand?]

Now, the California Department of Housing and Community Development is warning Anaheim officials that the city may have violated state surplus land law.

The Surplus Land Act requires public land that’s for sale be prioritized for low and moderate income housing, unless it’s exempt from the law. 

The city didn’t meet the exemption requirements, according to the state housing department letter to Anaheim City Attorney Rob Fabela. 

The law “requires the city to take formal action in a regular public meeting declaring the property surplus or exempt surplus land, as supported by written findings,” reads the letter. “None of the documents that the city has provided to [Housing and Community Development] indicate that the city has declared the property surplus or exempt surplus…”

[Click here to read the housing department’s letter]

Yet, Fabela in a written response to the department contended the current law doesn’t apply to the land because the city was “engaged in exclusive negotiations” with the Angels before Sept. 30, 2019 — when an update to law would start applying to public land that’s being sold.

“Here, the documentary and administrative record establishes that the city and the principals of Angels Baseball were parties to an exclusive negotiating agreement,” Fabela wrote. 

[Click here to read the city’s response]

But there was no exclusive negotiation agreement publicly voted on by council members. 

Moreno tried to get one in early 2019, when the Angels were talking to Long Beach about a potential move there

His idea was shot down.

“So there is no, to my knowledge, at least a closed discussion or an open discussion about voting on an exclusive negotiating agreement — so that’s odd,” Moreno said Thursday.

He said the issue ties in with the lawsuit. 

“That would have had to be voted on in public and we never did. And that’s part of the lawsuit — the alleged Brown Act violation from the People’s Homeless Task Force — is that we moved from a lease to a sale in private,” said Moreno, who voted against the land sale last year. 

In early 2019, Mayor Harry Sidhu brought forward a lease reinstatement, which was largely classified as a one-year extension at the time.

Stadium talks remained secret until November 2019, when officials announced the city was selling the land at a $325 million starting price.

In 2019, Council members only talked about the stadium deal twice in closed session after negotiations officially began, according to meeting agendas. The first discussion happened on Nov. 19 and another discussion Dec. 3, the day before the land sale proposal was publicly released.

Moreno said he wondered if the land sale agreement was rushed in 2019 to potentially circumvent the incoming changes to the Surplus Land Act, which took effect in 2020.

“I explicitly asked over and over: Does this have to do with the Surplus Land Act? And I was told no,” he said. 

The council majority voted to begin the land sale process December 2019, despite not knowing how much actual cash the city would get from the deal.

[Read: Anaheim City Council Not Worried About Total Cash Value For Angel Stadium]

Roughly 10 months later, the council majority voted to sell the land for $150 million to a freshly-minted development company headed up by Angels’ owner Arte Moreno. 

The council majority was fine with taking nearly $170 million off the starting price: $123 million to subsidize 466 units of affordable housing and $46 million for a seven-acre park. 

The park is estimated to cost $6.5 million per acre to build, more than six times the per-acre price that Moreno is buying the roughly 150 acres of stadium land for. 

[Read: Anaheim Council Sells Angel Stadium and Land for $150 Million, Subsidizes Housing and Park]

Meanwhile, city officials are talking with the state housing department about its warning letter. 

“A positive conversation with our state partners is underway, and we look forward to addressing concerns and moving forward,” city spokeswoman Lauren Gold said in a Thursday email.

Moreno, the councilman, said residents may finally get a glimpse of what happened because of the lawsuit and the state housing department. 

“I’m hopeful that the people will really get a chance to understand what happened here,”  he said.

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

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