Anaheim city officials on Tuesday night came under fire from city council members with tough questioning about a potential $96 million fine — stemming from council members’ decision last September to sell Angel Stadium and the roughly 150-acres it sits on.
City Attorney Rob Fabela during Tuesday’s public meeting advised council members that city officials were talking to a state housing agency that has called out the city for it’s land dealings.
“The fact that this land would likely be deemed exempted by the Surplus Land Act, the fact that the Angels would likely control this land through 2038 … we felt and we still feel the city was on solid ground to move forward with the sale.”
City Attorney Rob Fabela
In April, the California Department of Housing and Community Development sent the city a letter, warning it could be in violation of the state’s surplus land act.
On Tuesday night, there were myriad questions about why city officials didn’t immediately notify the entire city council about the potential fine and implications for the stadium deal of violating the state’s laws on selling public land.
The law prioritizes development of low and moderate income housing on public land that’s for sale.
Councilman Trevor O’Neil pushed back against criticism from residents that the deal was done almost entirely in secret.
“Speaking briefly on the notion of transparency, which was brought up tonight and when this item was agendized — and there were comments made about a pattern of secrecy around this deal — but as I recall, we had several public discussions and public forums and outreach that took place,” O’Neil said, asking staff for an estimate.
Fabela said he could only recall “one actual meeting … where the topic was direction on what we wanted to see in the deal.”
The City Attorney was referring to the only public discussion council members had in August 2019 before agreeing to begin the land sale process that December.
In that August meeting, council members had a vague talk about what they wanted to see out of the deal. But, at the time, it was still publicly unknown if the deal would be a land sale or a renewed lease for nearly four more months.
Meanwhile, the state housing department has issued a preliminary conclusion that Anaheim has yet to prove it’s in compliance with the Surplus Land Act.
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…”
The findings prompted Councilman Avelino Valencia to successfully call for a rare public discussion about Angel Stadium on Tuesday.
“It is our fiduciary responsibility to be transparent. Even more so when it’s our city’s largest piece of publicly owned real estate.”
Councilman Avelino Valencia
He also said it’s a “great concern” of “receiving an assessed fine of up to $96 million.”
Valencia also expressed worries about how quickly the stadium deal was negotiated and voted on in 2019.
Negotiations began in November, 2019 and land sale plans were publicly released early December.
“I noticed at times it takes a 7-Eleven longer than it would’ve taken to get this Angels deal done. And that is a bit concerning to me.”
Councilman Avelino Valencia
He asked Fabela if the speed of the deal opened up the city to legal liabilities.
“In general, I can say the more time there is to address all potential issues, the more likely you are able to protect yourself. Again I don’t know if that means if we had more time to negotiate this, we would be in a better position,” the City Attorney responded.
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The original sale price was $320 million, but 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 team owner Arte Moreno is buying the roughly 150 acres of stadium land for.
In Fabela’s June 14 response to the housing department, he said the law doesn’t apply because the city and the Angels entered into an exclusive negotiating agreement.
Yet the council never publicly approved one — instead they shot down the idea of an exclusive negotiating agreement from City Councilman Jose Moreno in early 2019.
“When I made the motion to do that, this council explicitly voted down an exclusive negotiating agreement,” Moreno told his colleagues Tuesday night.
But, Fabela said, the lease reinstatement and the negotiations itself serves as an agreement that exempts the sale from the Surplus Land Act.
“No other party was involved in these exclusive negotiations — nor could have any other party been involved — because of the privity of lease and contract that existed between the parties under the Current Lease as well as the lease issues that were subject of negotiations,” Fabela wrote in his response to the housing department.
He also pointed to a similar situation in the City of Santa Monica, when the housing department exempted a land sale from the act — stemming from an apparent handshake negotiating agreement.
“The [law] does not define ‘exclusive negotiating agreement’ and does not state that it must be in writing,” reads the March 2020 determination letter the housing department sent to Santa Monica.
The housing department found the city and developers had an exclusive negotiating agreement, but it expired.
Yet, the two parties kept negotiating exclusively with each other, the department stated.
“The [law] also does not explicitly prohibit an oral or constructive [exclusive negotiating agreement]. There also does not appear to be any case law prohibiting such an agreement,” reads the Santa Monica determination letter.
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State housing officials told Voice of OC they’re still waiting on more documents from Anaheim before the department makes a final decision.
During Tuesday’s council meeting, Fabela insisted the existence of the lease serves as an exclusive negotiating agreement.
Mayor Harry Sidhu successfully spearheaded lease reinstatement efforts in January 2019 — months after the Angels’ lease expired and the team would’ve had to leave the stadium by the end of that year or negotiate a new one with the city.
“The record makes it clear that the city complied with both the spirit and the letter of the Surplus Land Act,” Sidhu said during Tuesday’s meeting.
“I’m committed to doing the right thing for our city. That includes keeping the Angels right here in Anaheim.”
Spencer Custodio is a Voice of OC staff reporter. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio