In the wake of the recent revelations of an FBI corruption probe in Anaheim, California state legislators are taking another look at a state law that was supposed to guard against the quick sale of public property to insiders, like the aborted sale of Angel Stadium to a developer group led by team owner, Arte Moreno.
State Senator Tom Umberg is leading efforts to strengthen the law, known as the state Surplus Land Act. He said he was motivated to act after Anaheim officials clearly violated its terms but would have still been able to keep the deal going by paying a fine.
It was the disclosure of an FBI investigation into the stadium sale process that ultimately derailed it.
State housing officials, in previous interviews with Voice of OC, have said the State Surplus Land Act, as written, limits their enforcement options.
The law requires local agencies with land deemed “surplus” to notice its availability to affordable housing developers and the state.
The agency with the surplus land is then required to enter into good faith, 90-day negotiations with interested, bidding parties.
But public land deals to insiders, found to be in violation of the Surplus Land Act, can’t be voided. That’s expressly stated in the current law – and local agencies aren’t required to send the land out for rebid.
When California Attorney General Rob Bonta concluded the 2020 Angel Stadium sale violated the Surplus Land Act, he fined the City of Anaheim $96 million but let the deal go through with some additional affordable housing requirements.
Then the FBI contacted Bonta’s office, alerting them to an investigation into the sale process, the Chamber of Commerce’s former CEO Todd Ament, and former mayor Harry Sidhu.
[Read: FBI Corruption Probe Into Anaheim Mayor Sidhu Stalls the Angel Stadium Sale]
Although the land sale’s now dead, State Senator Tom Umberg (D-Santa Ana) wants to empower the state’s Department of Housing and Community Development to nullify land deals if it’s been determined the land sale is illegal under the Surplus Land Act.
The Angel Stadium land sale and the resulting $96 million fine shows the act needs more teeth to it, Umberg said in a Wednesday news release.
[Read: Anaheim City Council Agrees to Pay $96 Million Fine for Illegally Selling Angel Stadium]
“To accommodate the fine, City officials planned to simply transfer the $96 million from the $123 million for affordable housing that was already included within the stadium land deal – thereby negating the intended effects of the SLA’s fine enforcement mechanism,” Umberg said in the news release.
Basically, city officials planned to rework the back end of the deal to create the $96 million affordable housing trust fund to build housing across Anaheim, and not on the stadium site as was originally planned.
But those plans fell apart last month when revelations of an FBI corruption probe into former Mayor Harry Sidhu surfaced, including allegations by federal investigators that he gave the Angels critical information during stadium negotiations.
The deal was put on hold for 60 days at the request of state Attorney General Rob Bonta, who was enforcing the Surplus Land Act violation. It was eventually canned by the Anaheim City Council late last month.
Assemblyman Phil Ting (D-San Francisco), who helped spearhead amendments to the Surplus Land Act a few years ago, criticized the handling of Anaheim’s land act violation.
“Unscrupulous deals like the one in Anaheim circumvent the purpose of the SLA. It’s clear that legislation is needed so that we aren’t seeing more local governments benefiting from violating the law,” Ting said in the Wednesday news release from Umberg’s office.
He seemingly criticized Bonta’s handling of the enforcement, without naming the attorney general, in an April interview.
“That money shouldn’t have been kept by the city – it should’ve gone to the state,” Ting said. “Allowing the City of Anaheim to keep the money really doesn’t make any sense to me.”
The State Assembly’s Local Government committee voted 7-1 to pass Umberg’s new Senate Bill, introduced earlier this month, to prevent land act violations and enforcements similar to Anaheim’s Angel Stadium deal.
Assemblyman Tom Lackey was the dissenting vote.
The bill, called SB 361, will prohibit government agencies from selling or disposing of land in a way that is not compliant with California’s Surplus Land Act.
Under the bill, the state’s housing and community development department will have the power to force cities or local government entities to rebid the sale and require those same entities to provide at least two weeks notice before meeting and ratifying any land deal.
Read the bill here.
Umberg has also introduced another bill that would void contracts if they were negotiated in connection to a bribe of a public official.
That bill, called SB 34, is expected to go before the state assembly’s accountability and administrative review in the upcoming weeks.
Read the bill here.
In a news release, Umberg said it was painful to see public trust be eroded.
“SB 361 and SB 34 are just the beginning steps needed to restore the trust of the residents of Anaheim and Orange County.”
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.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.