City of Anaheim officials are fighting back against a lawsuit alleging the elected City Council majority secretly conspired to sell Angel Stadium in the midst of lease negotiations in 2019.
If proven true in court, the city’s alleged plan around a 160-acre parcel of land in town would be illegal under the state’s government meetings transparency law, the Ralph M. Brown Act.
City officials, defending the sale in a Jan. 27 legal filing, argue the lawsuit relies on “speculation, misstatements of the evidence, deliberate omission of contrary evidence, and unsupported legal theories.”
They’re also calling for two written statements by a current and former city official – stating the council majority did indeed decide to sell in secret – to be stricken from the record for violating rules barring the disclosure of what happens during narrowly-allowed closed-door meetings.
“The idea that the city says it can violate the law and nobody can tell anyone is absolutely ridiculous,” said Kelly Aviles, the attorney representing the People’s Homeless Task Force that’s suing the city, in a Friday phone interview.
“That kind of reasoning is right out of a Mafia Don’s playbook. The idea that there should be this code of silence on when people are violating the law is straight out of Mafia culture,” Aviles added.
State law allows a council member to express concern that actions at a closed session meeting have broken the law, “including disclosure of the nature and extent of the illegal or potentially illegal action,” according to Government Code 54963(e)(2).
“I think they’re missing the mark completely and the ramifications of what they’re purporting to ask for – that no-one can be a whistleblower as to their illegal conduct in a closed session – is just wrong and isn’t supported by anything,” Aviles said.
Aviles said the city’s legal filing also appears to switch-up officials’ stance on the nature of the closed session meetings.
“The city had this long term lease for decades and they were going to go renegotiate it, but all of a sudden in December, they’re selling the property — that’s what we questioned from the beginning is, ‘Hey hey, the public didn’t get a chance to talk about selling the property at all.”
Aviles continued, “So for a while, they were seeming to argue that they can totally do that, but now they want to say they didn’t really do that, which is problematic credibility-wise given their position in open court and their demurrer — to now say, it never actually happened in closed.”
Posing further trouble to the city, from another direction, is a state Surplus Land Act violation from the California housing department which determined the stadium was sold illegally under the act that aims to preserve local governments’ surplus land for parks and housing.
Meanwhile, the transparency lawsuit by the People’s Homeless Task Force, an Anaheim homeless advocacy group, alleges the following:
- The City Council majority secretly decided to go from lease negotiations to a sale in 2019.
- The city created a negotiating team that met in violation of state public meeting laws.
- The city held illegal serial meetings, individual briefings with the city manager who relayed that to the negotiating team.
- The city worked to conceal the closed-door stadium discussions in four vaguely-detailed council meeting agendas.
- The city stifled public input during September and October 2020 public hearings on the stadium.
The lawsuit looks to have OC Superior Court Judge David Hoffer overturn the land sale and order city council members to redo the whole process in public.
Hearings before the judge are slated to kick off Feb. 14.
In their legal filings, city attorneys argue the task force’s main argument — that a majority of council members secretly decided to sell the stadium between August and September 2019 — goes off faulty written declarations by two city officials.
Those officials are Anaheim Councilmember Jose Moreno, who publicly questioned the sale and the council majority under Mayor Harry Sidhu, and former city manager Chris Zapata, who was fired abruptly by the city after publicly raising concerns about city spending on resort promotion executives.
City officials argue in legal filings that Moreno’s and Zapata’s written accounts of what happened contradict each other.
According to legal filings, here is what Zapata said:
“During the August 23, 2019 closed session of the City Council, Mayor Harry Sidhu advised that Angels Baseball had proposed to buy the Stadium Site, instead of continuing on with the current lease or lease negotiations. The City Councilmembers discussed whether to sell or continue the lease during the closed session and made the decision to sell the property to Angels Baseball during that closed session.”
Here is what Moreno said:
“During the August 23, 2019 closed session of the City Council, the City Councilmembers were advised that Angels Baseball had proposed to buy the Stadium Site, instead of continuing on with the current lease or lease negotiations.”
Moreno continued, “The City Councilmembers discussed whether to sell or continue the lease during the closed session and, in expressing strong interest in selling the property to Angels Baseball, discussed the value of the then current appraisal to determine the value of the property in a for sale transaction,” adding that council members ordered an updated land appraisal.
The city’s legal filings also argue Moreno contradicts himself in another way.
Although Moreno stated such a ‘decision’ to ‘sell’ was made in August and September of 2019, the city argues “Moreno said the exact opposite in his video-recorded statements at the City Council meeting of December 20, 2019, when the initial purchase agreement was first approved.”
There, the city’s legal brief argues, “he acknowledged (among other things supporting the City’s case) that the December 20th meeting was the ‘first time’ the Council had discussed a ‘sale’ of the property in any context, and that, in closed sessions, the City Attorney ‘was very good in making sure we focus on the price and terms of payment per the Brown Act.’”
Moreno at that meeting said it was the council’s first “public” discussion.
City attorneys also wrote in their response brief that there was no closed-session meeting — or any City Council meeting — on Aug. 23, 2019.
“The closest meeting at which the Stadium Site was on the closed-session agenda was August 13, 2019,” the city writes.
The city’s filing adds: “At that meeting, and at every other closed-session meeting on the transaction (including the meeting of September 24, 2019), there was no discussion of the merits between a sale or a lease, or any discussion of whether a sale or lease would be the ultimate form of the transaction, or any ‘decision” or vote on what the form of the transaction would be.”
“On the contrary, both before and after those meetings, both a sale and a lease were still potential options, with the ultimate form of the transaction still unknown,” reads the city’s filing.
Aviles said the city is “cherry-picking” arguments and that “we’re also talking about what happened in meetings 2 years ago — more than that now — and it doesn’t surprise me at all that the details they (Moreno and Zapata) remember might be different.”
“The fact their declarations are not exactly the same only supports their credibility … when you walk through the timeline, their statements match up with the timeline completely,” Aviles said. “It’s not like there’s a declaration from other council members who say that’s not true.”
The city does include a written declaration supporting their side from Steven Norris, the real estate appraiser hired by the city in 2019 to assess the stadium’s value as well as that of surrounding property.
Norris wrote in his declaration, “I understand that a contention has been made in this case that, at some point in August or September of 2019, the City ‘changed’ my assignment from a ‘lease’ appraisal to a ‘sale’ appraisal. This never occurred.”
He added that the “core nature” of his assignment never changed from the initial request that “I appraise the fair market value of the property,” though he was asked for “for certain updates from time to time, and my assignment was ‘modified.’”
The city also calls for written testimony by Moreno and former city manager Chris Zapata to be stricken, arguing their declarations violated the “sacrosanct” rule barring the disclosure of closed session discussions.
The Ralph M. Brown Act, the state’s open government meetings law, narrowly allows cities to legally enter these confidential real estate discussions in what are known as closed session meetings – so long as they only pertain to the subjects of price and terms.
Anaheim City Council members never publicly discussed switching from a lease to a sale – something which violates state transparency law, the task force says.
“… between the end of 2018 and the end of 2020, the City engaged in a pattern of secrecy surrounding the sale of Angels Stadium and violated the Brown Act and the California Constitution by circumventing the laws mandating public discussions and disclosures regarding decisions to sell real property,” reads the task force lawsuit’s opening brief.
The task force advocacy group says the city tried to use a narrow exception in the Brown Act to secretly discuss the switch, which only applies to price and terms of payment.
“Here, the City Council improperly evoked this narrow exception in its August 23 and September 24, 2019 meetings to discuss and deliberate on whether to sell the Stadium in response to a proposal the City had received,” reads the brief.
City Council members approved the sale proposal behind closed doors Dec. 3, 2019 and officials publicly unveiled those plans the next day.
And five days before Christmas, a majority of the council members approved the land sale on Dec. 20, 2019.
“Discussions between the parties remained preliminary until well into 2019, with the City waiting to receive a concrete proposal from the Angels […] During this initial period, which lasted through November of 2019, the Angels provided no specific proposal regarding the Stadium Site, and it was unknown what form of transaction they would ultimately offer, whether it be a sale, a lease, or something else,” reads the city’s January response filing.
Angel Stadium is being sold to SRB Management, headed up by team owner Arte Moreno, which was formed two weeks before council members secretly agreed to a land sale.
According to business filings in Delaware, SRB Management was formed Nov. 20, 2019 – nearly three months after Sidhu first brought the sale proposal to his colleagues behind closed doors.
A majority of Anaheim City Councilmembers finalized the land sale in September 2020, with Councilman Jose Moreno – unrelated to team owner Arte Moreno – and former Councilwoman Denise Barnes dissenting.
The original starting price was secretly reduced from $325 million to $320 million so the city can hold onto roughly two acres for a water well and a fire station.
The council majority was fine with taking nearly $170 million off that price: $123 million to subsidize 466 units of affordable housing and $46 million for a seven-acre park.
The city considers the markdown “community benefits credits.”
Meanwhile, city officials still have the Surplus Land act violation from the California Department of Housing and Community Development to deal with from early December.
In an unsuccessful effort to avoid a Surplus Land Act violation, city officials and Arte Moreno’s SRB Management offered to up the amount of affordable homes slated to be built to 777, according to a city statement posted to its website.
That proposal was also secretly fashioned.
The housing department rejected the proposal and instead gave 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.
If the city doesn’t change course, officials in Anaheim anticipate a $96 million fine.