Anaheim officials repeatedly claimed their secret sale of Angel Stadium didn’t break state law on Monday while agreeing to pay a $96 million fine for breaking state law.
Yet State Housing and Community Development officials told Voice of OC – just hours after the penalty was announced – that Anaheim indeed broke state surplus land law when City Hall officials decided to sell the stadium property during secret meetings in 2019 and 2020.
State housing officials during a Monday afternoon interview with Voice of OC reporters stressed that Anaheim is indeed paying a $96 million fine – not what city officials dubbed an “agreement” in PR materials blitzed out to media outlets Monday.
The $96 million fine is slated to enter a local fund building roughly 1,000 affordable housing units across town over the next 5 years, according to a stipulated judgment between Anaheim and the state agency.
Yet on Monday, Anaheim Mayor Harry Sidhu said Angels team owner Arte Moreno’s development company will pay the fine and it shouldn’t affect the $150 million in cash the city’s getting for the stadium and the roughly 150 acres it sits on.
Click here to read the stipulated judgment.
Anaheim City Council members are expected to vote on the proposed stipulated judgement Tuesday at 5 p.m.
While Bonta touts the impact of the fine on city officials, it seems that in practice, all the state did was move around amounts in the existing deal.
According to the city staff report for the formal actions being considered on Tuesday night by city council members, the city’s agreement with SRB Management (aka, Angels Management) would be amended and the local housing trust established by the judgment would get the $96 million.
“The total amount of the investment in affordable housing through this settlement is reflective of the $123,677,843 amount that was originally credited to SRB in the Stadium sales transaction for onsite affordable housing. 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 the city staff report.
In a Monday news conference with Bonta, Sidhu also insisted he and others at City Hall never broke the law.
“The City of Anaheim, we really believe the process was very fair, very straightforward,” Sidhu told reporters.
Bonta contradicted that notion to reporters while Sidhu smiled into the web camera.
“We are enforcing the Surplus Land Act and we are making sure that when it’s violated, we align with Housing and Community Development (to) make our position clear – we did that here,” Bonta said. “They (Anaheim officials) have a different perspective … our perspective has been and continues to be clear.”
[Read: California AG Fines Anaheim $96 Million in Angel Stadium Sale, City Says Team Owner Will Pay]
City officials have maintained in various statements that the fine is an “agreement.”
“Yeah, we agree to disagree on that. They never believed that they violated the law. I point to our December notice of violation – we still think all those things are true,” said Megan Kirkeby, deputy director of housing policy at the Housing and Community Development Dept.
In a Monday afternoon phone interview, Kirkeby said the $96 million fine stems from the housing department’s enforcement of the Surplus Land Act.
State legislators updated the law at the beginning of 2020, which calls on the department to head up its enforcement.
“We are not rescinding our notice of violation, this will fulfill our enforcement of the notice of violation should all the conditions be met,” Kirkeby said.
Kirkeby said, “this isn’t a settlement.”
“It’s a stipulated judgment. And one of the things about it is the enforceability,’ Kirkeby said.
She added that the previously promised 466 units of affordable housing at the stadium site were unenforceable.
“That was a media talking point previously – a PR talking point,” she said. “There was no covenant, there was no deed restriction to ensure the affordability of those units.”
Despite the statements from state housing officials, Sidhu repeatedly called the judgment an “agreement” on Monday saying “it will bring the largest investment in affordable housing to the city of Anaheim,” Sidhu told reporters. “This agreement means that working families will see housing they can afford sooner.”
“The city is touting this as the largest expansion of affordable housing, but what they’re not saying is they didn’t do this of their own will,” said Cesar Covarrubias, executive director of the Kennedy Commission.
The group advocates for affordable housing in California and had warned the city repeatedly that the stadium sale was illegal, highlighted recently in a column by LA Times Sports Columnist Bill Shaikin.
“They had to be forced,” Covarrubias said.
Anaheim was first warned it could be in violation of the Surplus Land Act last Summer.
By December, state housing officials concluded that Anaheim City Council members were violating the law and formally told them so.
[Read: State Housing Department: Anaheim Illegally Sold Angel Stadium]
“The failure to dispose of land in accordance with the Surplus Land Act after receiving
notification from HCD shall subject the disposing agency to a penalty of 30 percent of the final
sale price of the land,” reads the proposed stipulated judgment, which the city council still needs to approve.
That fine is slated to be deposited into a local housing trust fund.
“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,” reads the stipulated judgment.
Kirkeby said the judgment against Anaheim is the first of its kind under the updated Surplus Land Act.
“As another point of important precedent here, they are now a violator,” she said, adding “they have now set themselves up to pay 50% of the sales price if they violate the Surplus Land Act again.”
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
Brandon Pho is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.