Anaheim cancels Angel Stadium development agreement; and after?
With the City Council ending the sale of the Los Angeles Angels’ home after corruption charges against city officials, Angel Stadium development and the team’s future in Anaheim may not be as murky as outsiders assume.
To keep you up to date with all the action: Earlier this week, Anaheim Mayor Harry Sidhu resigned following accusations that the sale of Angel Stadium and surrounding land took place under questionable circumstances, tying the sale to a $1 million campaign contribution. The Anaheim City Council then voted to reverse the $320 million sale of the ballpark and 150-acre site to SRB Management, which includes Angels owner Arte Moreno and development partners. Angels owner Arte Moreno and his investment group were looking to buy the 20-acre Angel Stadium site and an additional 133 acres including 12,500 parking spaces for games and events, and the City National Grove of Anaheim , a 1,700-seat theatre. The total cost: $150 million in cash and $170 million in community benefits, including affordable housing, although ultimately the commitment to affordable housing was reduced, much to the chagrin of the townspeople who rightly consider the problem to be very important in Anaheim. . The goal was a mixed-use development à la The Battery. Moreno would also have the power to decide whether to build a new ballpark on the site or renovate Angel Stadium. It was a risky move: SRB management had already deposited $50 million with the city, and the wording of the agreement provides for the return of that deposit plus fees if the city cancels.
The city council, however, is moving forward with the assumption that there was wrongdoing on the part of Moreno and his investors. The problem: No one, including the FBI, has accused the Angels of any specific wrongdoing. This may change, of course, but to date the city had no legal basis to unilaterally cancel the purchase agreement. City attorney Robert Fabela argued for the deal to be voided, saying the FBI’s allegations “demonstrate that this transaction was not a bona fide, arm’s length transaction.” But this is a political argument, not a legal argument; it is difficult to cancel an agreement because your sidemisbehaved. And other city officials, including City Manager James Vanderpool, want to see the development deal renegotiated, but not scrapped altogether.
What is the most likely course once the cooler heads in the city prevail and the realization sets in that the Angels still have a lot of power in this situation, thanks to the Angel Stadium lease until 2029 , with options through 2038. Under teams in this lease, the Angels can demand ballpark upgrades with a fairly standard “state of the art” clause — upgrades of up to $150 million. Additionally, the lease also gives the team some power to limit development around the ballpark. Opponents of the development deal view the 150-acre site as a cash register with valuations of $7 million/acre and a slew of affordable housing options, but that’s just not the case at the moment. The city could compete for development rights, but without the Angels’ consent, it’s hard to see a rush of developers offering $7 million per acre.
If negotiations reopen, a new deal may not be all that different from the City’s canceled deal, which rough haters admit: “During a morning appearance on KPCC, Jose Moreno said starting over may well result in a project that looks something like the one he wants the city to cancel..” (Jose Moreno is a city council member who has always opposed the Angels deal. No connection to Arte Moreno, by the way.) A deal providing more revenue to the city and more affordable housing while keeping the Angels in Anaheim and also moving the necessary stadium renovation. or replacement costs for angels may be the best deal the city receives. And no, there will be no other sports team to replace the Angels: the idea floated by Jose Moreno that you will see a third NFL, NHL, NBA or MLS team in Los Angeles is silly and naive.
So don’t look for the team to move. Yes, Long Beach re-launches 13-acre waterfront site for new ballpark—the so-called Elephant Lot plot next to the Convention Center. When planning a major 150-acre development at Angel Stadium, reducing expectations to a 13-acre site is a big step backwards: that’s barely enough land for a baseball stadium, far less than the necessary parking, and no room for development. unless you start demolishing existing buildings like the nearby arena.
And forget about moving to a different market like Las Vegas or San Antonio. The angels have MLB’s second-best local television contract: a 20-year, $3 billion deal with Bally Sports signed in 2011. half of what the Angels receive locally.) No way a similar TV rights deal awaits the team in Las Vegas, San Antonio, Portland or Nashville.
So what happens next? Probably not much in the coming weeks. Yes, SRB management could sue and force the city to honor the original development contract, but if the city fights back, we’re looking at years of lawsuits. A new deal with improved terms would appear to be the most cost-effective solution for both parties: more revenue and more affordable housing saves the city face, and it allows SRB management to move forward. forward with the development plans. Again, there was nothing the team could do and let the current lease run its course while being perfectly fine financially.
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