The city of Anaheim illegally sold Angel Stadium and the roughly 150 acres it sits on for $150 million, the state housing department has concluded. 

“The City Violated the Surplus Land Act by Failing to Declare the Property as ‘Surplus Land’ or ‘Exempt Surplus Land,’” reads a Wednesday determination letter from the state Department of Housing and Community Development.

Anaheim Mayor Harry Sidhu said the city received the state’s letter but disagrees with its conclusion.

“We disagree that the land is surplus,” Sidhu said Wednesday during a veterans cemetery event, admitting that the “state thinks differently than we do.” 

Officials at the department found Anaheim officials have failed to provide “any documentation to [the housing department] demonstrating that the City has declared the Property as either “surplus land” or “exempt surplus land” before it took action to dispose of it, including but not limited to negotiating and entering into Purchase and Sale Agreements and Disposition and Development Agreements with SRB Management, LLC.”

Angels owner Arte Moreno heads up SRB Management, a development company created in late 2019, shortly before the stadium sale proposal was made public.

State housing officials also said Anaheim officials failed to provide the housing department with certain documents required under the law before selling the stadium.

“The Purchase and Sale Agreement and Disposition and Development Agreement establish that the City has agreed to terms for the disposition of the Property. [The housing department] never received a description of any notices of availability sent, negotiations conducted, or a copy of any restrictions to be recorded against the property,” reads the letter.

Now, the housing department has given Anaheim two months to “cure or correct the alleged violation” by turning at least 80% of the stadium land’s development into housing, putting the land on the auction block requiring at least 25% affordable housing or declaring the property surplus land. 

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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 under certain provisions.  

“We have always been aware of and complied with state laws covering the proposed sale of Angel Stadium. We respectfully disagree with any suggestion otherwise,” Anaheim spokesman Mike Lyster said in a Wednesday text message. 

“Our stadium plan would bring the largest affordable housing expansion in our city’s history, and we look forward to continued talks to make that happen,” he said. 

City officials have estimated Anaheim could face a $96 million fine over the violation if the department’s concerns aren’t addressed.

In a previous letter to the state housing department, Anaheim City Attorney Rob Fabela said the stadium sale was exempt from the law because the city was “engaged in exclusive negotiations” with the Angels before Sept. 30, 2019, when the updated law started 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. 

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

Instead, they decided against a proposed one in early 2019.

State housing officials also noticed that.

“Based on the evidence submitted by the City, HCD finds that no substantial evidence of any exclusive negotiating agreement with SRB Management, LLC existed prior to September 30, 2019,” officials found.  

“Most notably, (a) on January 15, 2019, Anaheim City Council Member Jose F. Moreno moved to require a binding [exclusive negotiating agreement] and the motion failed; (b) SRB Management, LLC was not formed until November 20, 2019; and (c) in prior correspondence from the City dated November 27, 2020, the City represented to HCD that there was no exclusive negotiating agreement prior to September 30, 2019,” the determination letter reads.

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Council members finalized the sale in September 2020, which saw a huge price drop from the original price tag of $320 million. 

Taxpayers took $123 million off the starting price to fund at least 466 affordable housing units.

Another $46 million was taken off so taxpayers could build a seven-acre park on the stadium land.

It all happened without much critical discussion from the council majority.

In an unsuccessful effort to avoid a Surplus Land Act violation, city officials and SRB Management upped the amount of affordable homes slated to be built to 777, according to a city statement posted to its website Tuesday.

State housing officials disagreed with that approach in a Dec. 2 letter, which Lyster refused to provide, claiming it was “privileged communication among attorneys.” 

But the housing department provided the letter.

“[The housing department] must reject the City’s proposal and reiterate its position that the framework for any resolution here requires substantial compliance with the Surplus Land Act,” reads the letter.

Sidhu also said city officials will be reaching out to the state housing department to work with them.

“We’ll work with them to come up with a solution,” Sidhu said.

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Meanwhile, the stadium sale is tangled in a lawsuit filed by the Anaheim-based homeless advocacy group, People’s Homeless Task Force. 

[Read: How Did Angel Stadium Sell For $150 Million? A Judge’s Ruling Could Help Answer That]

The advocacy group sued the city in February for moving to sell the stadium land and alleged Mayor Harry Sidhu and his colleagues violated the state’s transparency law, also known as the Ralph M. Brown act, by holding secret meetings about the deal. 

The lawsuit is looking to overturn the land sale vote and have Anaheim City Councilmembers redo the entire process in public, which is now proposing to sell the stadium for $150 million. 

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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