You’ll have to fight through the Orange County Register paywall to read this (until Saturday, anyway), but reporter Martin Wisckol has the latest on the Los Angeles Angels stadium renovation plans, and it reiterates his earlier point that the benefits of free development rights to the Angel Stadium parking lots could be worth more than the entire $150 million cost of renovations:
At the heart of negotiations is the $130 million to $150 million in stadium renovations the Angels are obligated to perform over the next 20 years under the current lease. In the city’s effort to help the team defray those costs – and to ensure the team stays in town for the immediate future – city staff has proposed letting Moreno develop 128 city-owned acres surrounding the stadium.
Moreno would pay the city $1 per year for the land under the draft terms. The proposal, which appears far from finalization, also would rebate to Moreno all city taxes generated by the new development…
The council is awaiting an appraisal of the land, but estimates have run as high as $380 million. Even if the land was worth a more modest $200 million and Moreno was given development rights for $1 per year, that would mean a $50 million benefit to the owner beyond his highest expected renovation expenses.
That $200 million figure isn’t pulled entirely out of thin air: A developer previously offered $205-225 million for just 50 acres of the parking lots (the rest is needed for, you know, parking), though the deal fell apart after the recession hit. Orange County appraiser Wayne Foss told Wisckol he “would not be surprised at all” if the parking lot land was worth $50 a square foot, which would come to $109 million for 50 acres, or $279 million for the entire property.
That’s a pretty generous trade-off for agreeing to spend $150 million on renovations to your own stadium that your lease already requires you to pay for, and Wisckol asked the Angels how they justified the deal, getting this unbeatable reply:
Eager to dispel the impression that it’s making a land grab, the team emphasizes that the proposal originated with city staff.
“Including the land was the city’s idea as their contribution to fund the much-needed stadium improvements,” Angels spokeswoman Marie Garvey said.
That’s the sports-business equivalent of an “I’m With Stupid” t-shirt, right?
There are still problems with the plan, notably where on earth Angels fans would park if the entire lot is developed, but that’s something team owner Arte Moreno can always work out once he grabs, er, is unexpectedly gifted with the development rights. There’s also the little matter of rebating all tax revenue (property, sales, and hotel taxes, making this a rare SHTIF) from the development to Moreno, something that Wisckol doesn’t attempt to put a dollar value on, though it could be a hell of a lot; a couple of councilmembers, Lucille Kring and Gail Eastman, are saying that they’d prefer only a partial kickback of taxes, which would be better, though still dubious coming on top of handing over development rights already worth more than what the Angels would be spending in return. I guess Kring and Eastman think of this as haggling, but I can think of some other ways to describe it.