A majority of Anaheim City Council members Tuesday night agreed to pay a $96 million fine for illegally selling Angel Stadium – something city officials insist they did legally and object to any description as a fine.
To read the stipulated judgment’s language about the penalty provision payment, click here.
The public vote comes just 24 hours after California Attorney General Rob Bonta and Anaheim city officials announced a stipulated judgment for the city violating the Surplus Land Act.
At an abrupt special meeting called by Mayor Harry Sidhu, council members voted 5-2 to agree to the judgment, which mandates Anaheim create a $96 million housing fund that’s slated to build an estimated 1,000 affordable housing units throughout the city within five years of escrow closing on the land.
Councilmen Jose Moreno and Avelino Valencia voted against the stipulated judgment.
The two council members questioned why Sidhu was rushing the vote through and expressed concern that they – and residents – had only roughly 24 hours to review the stipulated judgment.
Tuesday’s vote also comes after a December 2021 warning from the state Department of Housing and Community Development that Anaheim City Council members violated the Surplus Land Act when selling the stadium.
Yet Sidhu and the council majority insisted they did nothing illegal or improper.
“This is a mutual agreement by Anaheim and the state of California. There is no wrongdoing and no fault and no conceding of any violation by Anaheim,” Sidhu said Tuesday night.
[Read: State Housing Department: Anaheim Illegally Sold Angel Stadium]
“There is no fine being paid by Anaheim, just the opposite. Our city is receiving $96 million dollars in new cash from buyer SRB. We will use this money to build an estimated 1,000 new affordable homes across our city,” Sidhu said.
But state housing department deputy director Megan Kirkeby has a completely different characterization of the situation.
“This is not a settlement, this is not a compromise – this is the full weight of the penalty, plus we leveraged additional laws … to get more than what the penalties would bring,” Kirkeby said in a Monday phone interview. “We are not rescinding our notice of violation, this will fulfill our enforcement of the notice of violation should all the conditions be met.”
[Read: Anaheim Denies Breaking State Law While Agreeing to $96 Million Fine for Breaking State Law]
Kirkeby, who oversees housing policy for the department, said Anaheim’s mandated $96 million housing trust fund mirrors what they would’ve had to pay the state.
“In terms of the structuring of the penalty, this follows the exact structure of the statute in the penalty – that’s quoted in the stipulated judgment. It must be put into a trust fund to be spent in five years,” she said.
Despite Sidhu’s insistence Anaheim is receiving “new cash” for the housing fund, city documents clearly show it’s coming out of the back end of the overall $320 million land sale.
City officials have said they still expect $150 million in cash from the stadium sale.
§
Councilman Valencia raised questions about calling the $96 million “new cash.”
“What’s being done here is creative accounting,” Valencia said at Tuesday’s council meeting. “It’s like cooking the books, right? The overall number is still there … the overall financial gain to the taxpayers of Anaheim has not changed and to add insult to injury it’s only increasing the financial gain to the Angels.”
Moreno said the stipulated judgment could set a bad precedent for other cities dealing with public land issues.
“I’m concerned with the precedent we are setting as a city and what it signals to other municipalities that they can circumvent the law,” Moreno said.
He later said, “The bottom line is this … Mayor Harry Sidhu and his council majority illegally sold our Anaheim stadium and surrounding land in a no bid real estate deal that is now costing the taxpayers.”
While the stadium is being sold for $320 million, a majority of city council members were fine with taking roughly $170 million in cash off of that price: $123 million to subsidize affordable housing and $46 million for a seven acre park – in what city officials say are community benefit credits.
[Read: Anaheim Council Sells Angel Stadium and Land for $150 Million, Subsidizes Housing and Park]
According to the text of the judgment against Anaheim, “The City shall deposit an amount equal to 30 percent of the Full Purchase Price of Angel Stadium Property to SRB, estimated to be approximately $95,943,653.70, into a local housing trust fund administered by the City. Notwithstanding the City’s denial of wrongdoing, the parties acknowledge that the City’s payment into this fund is intended to be consistent with the penalty provisions set forth in Section 54230.5 of the Surplus Land Act.”
The $96 million is slated to be taken out of the affordable housing money geared for the stadium land and instead put into a citywide housing fund, according to the staff report.
But SRB Management, headed up by Angels owner Arte Moreno, still has to agree to that shift in money in the city’s development agreement.
§
It’s a move that mirrors the city council’s initial December 2019 vote when they agreed to sell the stadium for $325 million, but didn’t know how much the final amount would be because they hadn’t negotiated the affordable housing or park subsidies yet.
[Read: Anaheim City Council Not Worried About Total Cash Value For Angel Stadium]
The staff report also says the money isn’t new.
“The intent of the parties is that Stadium deal will be restructured such that approximately $96M of the $123M credit will instead fund the housing trust, while the balance of the credit will be used to fund affordable housing on the Stadium site,” reads Tuesday night’s staff report.
During public comment, Anaheim mayoral candidate Ashleigh Aitken called the deal a “shell game.”
“This is not about affordable housing. This is about a corrupt deal centered around a no-bid contract fraught with valuation and transparency issues and as a resident I’m asking to protect our general fund and protect Anaheim taxpayers,” she said.
Aitken, whose father Wylie Aitken chairs Voice of OC’s board of directors, said any claims of new cash should be reflected in a higher sale price.
“A new influx of cash would result in a higher purchase price. But the residents of Anaheim are not receiving $1 more for the stadium sale,” she said.
§
Meanwhile City Councilman Jose Diaz said the stipulated judgment will get affordable housing built throughout the city faster than the original agreement.
“The only way to get rid of that housing deficit is building housing, it’s not secret,” he said. “If we vote no on any housing, we are creating more issues later on because we need housing for everybody.”
Councilwoman Gloria Ma’ae said by agreeing to the stipulated judgment, the stadium land can finally be developed into a host of establishments that will bring jobs and more tax revenue into the city.
“We have a piece of land the size of Disneyland with nothing on it other than a stadium right now. We get to keep our Angels and we get to develop this property,” Ma’ae said. “So it’s a definite positive.”
In a Tuesday evening news release, Attorney General Bonta hailed stipulated judgment for bringing affordable housing to the city.
“Enforcing state housing laws is an important component of this work, and we are proud to have reached a resolution in this case that will bring much-needed housing — but especially affordable housing — to the Anaheim community.”
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
Hosam Elattar is a Voice of OC Reporting Fellow. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.