Anaheim’s worst Angel Stadium error came year before its murky sale

The true shame within Anaheim’s baseball stadium giveaway happened a year before what’s now the centerpiece of a legal war — a murky deal to sell the city-owned arena and surrounding land to a group headed by the team’s 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 deal. The plan is for Moreno to buy the land, oversee development around the ballpark, and keep the Angels in town until 2050.

What’s the beef? The allegations say the deal was negotiated illegally and failed to meet state affordable-housing standards for selling government property. The activists’ lawsuit goes before a judge is in early March.

But the real cheating of Anaheim taxpayers — and/or residents seeking affordable housing — wasn’t the questionable $320 million price tag, or the $170 million credit the builder gets for doing what other developers often pay for out of their own pockets, the number of homes to be built, or how the deal was discussed and negotiated.

It’s that Anaheim leaders are too generous with a local business and its tarnished history.

Remember, these same Angels awkwardly stripped the city’s name out of its branding, using a legal loophole to become a “Los Angeles” team. On the field, the team has been a lackluster story considering it has two of baseball’s most talented players.

And off the field, it’s worse. A former team official is on trial for allegedly supplying illegal drugs to a star pitcher who died from an overdose. Early testimony suggests the team had drugs issues broader than the death of Tyler Skaggs.

All that team drama aside, the Angels started the stadium sale process with another ugly act — choosing to use an exit clause in their lease in October 2018. The team wanted an upgrade from baseball’s fourth-oldest stadium and city help in repairing or replacing the facility. By opting out, the team was committed to Anaheim for only the 2019 season.

Yet this left the city free to do what it wanted with this 150 acres of choice real estate. Anaheim could have been bold and said “farewell” to the team. Or, at least, seriously discussed life without baseball.

Clearly, after the opt-out, the deal-making leverage was owned by the city and its very valuable asset. Instead, three months after the Angels said they were leaving, Anaheim officials gave an incredible freebie to the team: essentially reinstating the old lease and moving the opt-out deadline back a year — for no extra consideration other than paying the usual rent.

The city used that “gift” as an excuse to focus its negotiating efforts with the Angels. Officials claimed the reinstalled lease now made the Angels the only negotiation partner and that nobody would pay more because the Angels, in essence, controlled the property.

Hardball works

This weekend’s Super Bowl in Los Angeles is proof that cities can play hardball with professional sports franchises.

For much of the early part of the century, the National Football League was desperate to expand into Southern California, specifically the Los Angeles-Orange County market. Not one local municipality fell for the league’s wishes for a relocating franchise to be handsomely compensated for their move. You know, cash, land deals, tax breaks, etc.

Eventually, the Rams grabbed the opportunity that the huge L.A.-O.C. market offers, relocating to Inglewood from St. Louis for little other than greased bureaucracies. Team owner Stan Kroenke spent $5 billion or more of his own money building SoFi Stadium to be home for his team as well as the recently relocated Los Angeles Chargers. The Chargers found San Diego unwilling to spend lavishly on a new stadium. And as a reward for his largesse, the NFL put this weekend’s championship game in SoFi.

Meanwhile, Las Vegas spent $750 million of tax dollars to steal the Raiders from Oakland. Playing hardball does pay.

In Anaheim, the 2018 opt-out could have begun a very public and broad rethinking of the stadium site — not to mention a vigorous bidding process. The baseball team or plans for the ballpark could have been a slice of that process.

But largely behind closed doors, the city and the team agreed to give away the stadium site for $320 million — minus $170 million in credits for the developer building some parks and affordable housing on the site. State housing regulators are threatening to fine Anaheim $96 million for shorting its affordable-housing obligations tied to such a deal.

It’s not hard to find folks who think the price is far too low for what will eventually become just another “mixed-use entertainment district.” And this city is certainly not hurting for attractions.

The Honda Center is literally across the street from the stadium. And 4 miles down Katella Avenue is a convention center and this placed called Disneyland.

But somehow, the Angels won a very public game of real estate chicken. The ballclub convinced the city it would find somewhere to call home after 2019, despite the fact, everybody knows major league stadiums aren’t built in a day.

What you’d expect

In many ways, Anaheim’s disappointing result is no surprise.

Municipalities far too often get stupid when it comes to local professional sports franchises. There’s this misguided idea in certain government circles that these are good civic investments.

More pragmatically, does a city leader who’d 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 baseball stadium game, a business most cities can’t handle. Remember, the city at one point held all the real estate cards but wouldn’t play hardball to win the best deal.

Losing the Los Angeles Angels, if it happened, would have been, at worst, a minor blow. But like many California cities, thanks to the silliness of Prop. 13 property tax limits and their impact on local government budgets, Anaheim craves entertainment tax dollars.

That addiction is really why the city panicked, gave away the lease extension freebie, and settled for exclusive negotiations with the team outside the public spotlight.

But that’s old news. I’m puzzled as to why the city doesn’t use the litigation against the Angels deal as an excuse to give the sale process a do-over.

Maybe new ideas are out there. Clearly, the pandemic has lowered interest in big chunks of the stadium land plans — offices and retailing spaces.

Have city officials seen the demand for raw land on which to plant logistics centers in remote parts of the Inland Empire? Imagine how much prices are up in the past two years for a sweet slice of central Orange County?

Or maybe a more open sales process in a do-over would prove this proposal was the best possible offer.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register