California’s top prosecutor found that the city of Anaheim violated public land use law when they secretly negotiated the sale of Angel Stadium in 2019.
At an abrupt, 11 a.m. Monday news conference, state Attorney General Rob Bonta said the city violated the Surplus Land Act when deciding to sell the stadium and is now facing a $96 million fine to boost Anaheim’s affordable housing stock.
The fine — currently in the form of a stipulated judgment between Anaheim and the state Housing and Community Development Department — Bonta said, “will resolve the notice of violation and fund the construction of affordable housing units throughout the city.”
Yet, at the same news conference, Anaheim Mayor Harry Sidhu insisted city officials never violated the law.
“They respect that we have a different view. We are not (in violation) and believe that our process was correct. But this is a great agreement coming forward,” Sidhu said.
In response to questions from Voice of OC during a press conference sponsored by Bonta’s office, Sidhu said Angels owner, Arte Moreno, will foot the $96 million fine through his SRB Management development company.
But the housing department said Anaheim will ultimately pay the penalty.
“Anaheim pays the penalty. They must do so within 14 days after close of escrow on the Angel Stadium Property (in the amount of 30% of the sale price, or + $96M),” wrote housing department official Alex Traverso in a Monday afternoon email following the news conference, again in response to pressing from Voice of OC.
Details of the stipulated judgment implementing the state fine were not made available to the press during the news conference.
Both Bonta and Sidhu championed the stipulated judgment at the news conference as the biggest expansion of affordable housing in Anaheim.
Bonta said the move is an enforcement of the Surplus Land Act, but he got several questions from reporters about whether this type of enforcement action actually creates an easier avenue for local agencies to skirt the Surplus Land Act.
“We’re looking at the big picture here – is how do we build as many affordable housing units in the city of Anaheim as possible,” Bonta said in response to questions from Voice of OC reporters.
He said the stipulated judgment does more than the law itself ever could.
“The settled, negotiated outcome is stronger than what could ever be achieved through litigation,” he said, adding the settlement achieves 38% of affordable housing development — more than what’s called for in the law.
He again defended the move following separate questions at the press conference from a San Diego Union Tribune reporter asking whether this kind of action mutes the impact of the Act’s penalties.
“We are enforcing the Surplus Land Act,” Bonta said. “We did that here.”
The stadium’s starting price, based on a secret appraisal at the time, was $325 million, a number that was reduced by $5 million right out of the gate so the city could hold onto roughly two acres for a water well and a fire station.
A City Council majority also accepted taking nearly $170 million in cash off that price: $123 million to subsidize 466 units of affordable housing and $46 million for a seven-acre park.
The seven-acre park is estimated to cost $6.5 million per acre to build, more than six times the per-acre price that Moreno is buying the 150 acres of stadium land for.
But some of that affordable housing money looks like it could be used to pay the state fine, which officials said on Monday would build up to 1,000 affordable housing units in the next five years.
Now, instead of $123 million in affordable housing on site, city officials note more than $27 million will be used to build affordable housing on stadium land.
“The agreement also calls for a minimum of $27.7 million in affordable housing on the
stadium site with details pending in an updated disposition and development agreement,” reads Monday’s news release.
Officials said the $96 million could be used to build roughly 1,000 affordable housing units across the city.
“This is just an estimate at this time, and it could be more, could be less,” Sidhu said.
Bonta said “we feel that is an appropriate assessment.”
Meanwhile, the deal’s most vocal opponent on the Anaheim City Council, Councilman Jose Moreno called the proposal another step in the wrong direction.
“This may be a big win for Anaheim, but not for the people of Anaheim,” Moreno said in a Monday phone interview.
He said the roughly 1,000 affordable housing units will likely be crammed into already busy neighborhoods.
“These units will likely be built in already dense, overcrowded, working class communities of Anaheim,” Moreno said.
But Sidhu said the homes could be built anywhere.
“This money will be spent to build the affordable housing that is much needed … anywhere in Anaheim. It could be the east, it could be the west, it could be the central,” he said during the Monday news conference.
Anaheim City Council members are expected to soon approve a modified stadium sale deal.
“Today we are urging the Anaheim City Council to approve this stipulated judgment … if approved, Anaheim will be required to deposit approximately $96 million into a local housing trust fund,” Bonta said.
Sidhu said the approval of a modified stadium deal still needs to be put on a City Council agenda.
“I’ll be asking to agendize it tomorrow at Tuesday’s council meeting,” Sidhu said.
City officials maintain that no money will be lost off the $150 million stadium price tag.
“The agreement sets aside $95.9 million ― in new cash paid by buyer SRB Management LLC ― for affordable housing across Anaheim to get underway within five years. Anaheim would continue to receive roughly $150 million in cash from the sale,” reads a Monday news release.
“If approved by Anaheim’s City Council, the agreement would be submitted to an Orange County Superior Court judge for approval as a stipulated judgment with court oversight of the terms.”
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.