The real shaming of the Anaheim ballpark giveaway occurred a year before what is now the centerpiece of a legal war — a murky deal to sell the city-owned arena and surrounding grounds to a group led by team owner.
The city and team owner Arte Moreno are battling state officials and local homeless activists over who said what to whom when and where before the December 2019 agreement. plan is for Moreno to buy the land, oversee development around the ballpark, and keep the Angels in town until 2050.
What is beef? The allegations indicate that the deal was negotiated illegally and failed to meet state affordable housing standards for the sale of government properties. The trial of the activists goes before a judge in early March.
But the real cheating of Anaheim ratepayers — and/or residents looking for affordable housing — wasn’t the questionable $320 million price tag, or the $170 million credit the builder gets for having done what other developers often pay out of their own pocket, the number of houses to be built, or how the deal was discussed and negotiated.
It’s that Anaheim’s leaders are being too generous with a local business and its tarnished history.
Remember, those same angels clumsily stripped the city name of its branding, using a legal loophole to become a “Los Angeles” team. On the field, the team has been a dull story considering it boasts two of baseball’s most talented players.
And off the pitch, it’s worse. A former team official is on trial for allegedly supplying illegal drugs to a star pitcher who died of an overdose. Early accounts suggest the team had broader drug issues than the death of Tyler Skaggs.
All that team drama aside, the Angels began the process of selling the stadium with another ugly act — choosing to use an exit clause in their lease in October 2018. The team wanted an upgrade. of baseball’s fourth oldest stadium and the city’s assistance in repairing or replacing the facility. By retiring, the team committed to Anaheim only for the 2019 season.
Still, that left the city free to do as it pleased with those 150 acres of prime real estate. Anaheim could have been bold and said “goodbye” to the team. Or, at least, seriously discussed life without baseball.
Clearly, after the opt-out, the negotiating leverage belonged to the city and its very valuable asset. Instead, three months after the Angels announced their departure, Anaheim officials gave the team an incredible gift: essentially, reinstate the old lease and push back the exit deadline by a year – without any other consideration than the payment of the usual rent.
The city used this “gift” as an excuse to focus its negotiating efforts with the angels. Officials claimed the relocated lease now made the Angels the sole negotiating partner and no one would pay anymore because the Angels, in essence, controlled the property.
This weekend’s Super Bowl in Los Angeles is proof that cities can play hardball with professional sports franchises.
For much of the turn of the century, the National Football League was desperate to expand into Southern California, particularly into the Los Angeles-Orange County market. Not a single local municipality agreed to the league’s wishes for a relocation franchise to be generously compensated for their move. You know, money, land deals, tax breaks, etc.
Eventually, the Rams seized the opportunity presented by the huge LA-OC market, moving to Inglewood from St. Louis for nothing but greased bureaucracy. Team owner Stan Kroenke spent $5 billion or more of his own money building SoFi Stadium to house his team as well as the recently relocated Los Angeles Chargers. The Chargers found San Diego unwilling to spend a lot on a new stadium. And as a reward for its largesse, the NFL put this weekend’s championship game in SoFi.
Meanwhile, Las Vegas spent $750 million in taxes to rob the Oakland Raiders. Playing hardball pays.
In Anaheim, the 2018 opt-out could have initiated a very public and broad overhaul of the stadium site, not to mention a vigorous bidding process. The baseball team or the plans for the ballpark could have been a slice of this process.
But largely behind closed doors, the city and team agreed to give away the stadium site for $320 million – minus $170 million in credits for the developer building parks and affordable housing on the site. State housing regulators are threatening to fine Anaheim $96 million for shorting its affordable housing obligations under such a deal.
It’s not hard to find people who think the price is way too low for what will eventually become just another “mixed-use entertainment district.” And this city certainly has no shortage of attractions.
The Honda Center is literally in front of the stadium. And 4 miles down Katella Avenue is a convention center and that place is called Disneyland.
But somehow, the Angels won a very public game of real estate chicken. The ball club convinced the city it would find a home after 2019, despite everyone knowing major league stadiums aren’t built in a day.
what you expect
In many ways, Anaheim’s disappointing result comes as no surprise.
Too often, municipalities get dumb when it comes to local professional sports franchises. There is this misconception in some government circles that these are good civic investments.
More pragmatically, does a city leader who would like a career in government want to be known as “the person who let the (fill in team name here) leave town?”
At a minimum, Anaheim taxpayers will get out of the ballpark game, a business most cities can’t handle. Remember, at one point the city held all the real estate cards, but wouldn’t play hardball to win the best deal.
Losing the Los Angeles Angels, if it had happened, would have been, at worst, a minor blow. But like many California cities, thanks to the stupidity of Prop. 13 and their impact on local government budgets, Anaheim sucks up entertainment tax money.
That addiction is really why the city freaked out, gave away the lease extension gift, and settled for exclusive negotiations with the team outside of the public spotlight.
But this is old news. I’m puzzled as to why the city isn’t using the litigation against the Angels deal as an excuse to breathe new life into the sale process.
Maybe new ideas are there. Clearly, the pandemic has reduced interest in large chunks of the stadium ground plans – offices and retail spaces.
Have city officials seen the demand for raw land on which to locate logistics centers in remote parts of the Inland Empire? Imagine how much prices have gone up over the past two years for a sweet slice of central Orange County?
Or maybe a more open sales process in a revamp would prove this proposition was the best possible deal.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]