Appraisal confirms: Angels seeking $245m in land to fund $150m in renovations

One more important news item from last week: On Friday, the city of Anaheim released its appraisal of the value of the Los Angeles Angels parking lots that team owner Arte Moreno wants to get for free in exchange for renewing his lease. And the verdict is:

The appraised value of the Stadium Site under premise #1, the Angels’ lease is renewed, is:

• $225M under a leasehold scenario and
• $245M under a fee simple, or sale, scenario.

Both approaches to value, in premise #1, include consideration of the need to continue to provide 12,500 parking spaces for stadium events, shared with new, commercial development on the site.

The appraised value of the Stadium Site under premise #2, the Angels’ lease is not renewed and the team relocates, is:

• $300M under a leasehold scenario and
• $325M under a fee simple, or sale, scenario.

Both approaches to value, in premise #2, do not include the need to continue to provide 12,500 parking spaces for stadium events.

Or put even more simply: The parking lots are worth $245 million with the Angels sitting in the middle of them, and $325 million if the Angels were to clear out. That’s a hell of a lot of value that Anaheim would be giving away, toward the top end of the $30 million to $380 million estimates that had been made previously, and about twice what the Angels would need to pay for their proposed renovations.

Angels execs haven’t responded yet to the appraisal — beyond last week’s letter complaining that putting a value on the land at all might give the general public the idea that the land is valuable — but Anaheim Mayor Tom Tait did say that he thinks the city should share in development profits once Moreno’s stadium upgrades are paid off. That’s actually pretty reasonable — probably overly reasonable, given how easy it is for sports team owners to hide profits — but somehow I don’t expect Moreno to jump at the opportunity.

Angels execs blow up at Anaheim for wanting to negotiate things in negotiations

Apparently that Bill Shaikin column in the L.A. Times the other day was just a warning shot in the simmering Los Angeles Angels lease war with Anaheim, because now Shaikin has followed up with a news article noting that “relations between the two sides have grown so strained that each side is accusing the other of trying to make significant changes to the terms of the deal”:

In a March 21 letter to the city, Angels attorney Alex Winsberg complained that a draft agreement presented by the city two days earlier “fundamentally conflicts with the basic intent of the deal … an exchange of development rights for the obligation to renovate and maintain the stadium.”

In another letter, dated April 24 and posted on the Voice of OC website, Angels President John Carpino said the team was “shocked” by the draft agreement that he said “removed any inducement for the Angels to undertake the substantial economic risk and responsibility negotiated into the framework of the deal that was initially proposed by the City of Anaheim.”

In a March 31 letter to the Angels, City Attorney Michael Houston reminded the team that the deal framework — called a memorandum of understanding (MOU) — was subject to change upon further negotiations.

“It bears mentioning that the Angels … are currently proposing terms that differ from the MOUs,” Houston wrote. He added: “Temperance, diligence and trust are the basis for our negotiations.”

I’m not so sure this actually qualifies as “strained” — it looks to me more like the usual push-and-pull of negotiations over a deal that was penciled out but not actually finalized — but clearly Angels owner Arte Moreno wants to put out there that the city of Anaheim is being unreasonable in not just rubber-stamping whatever he wants the MOU to mean. (To be clear, Moreno didn’t leak the letters; they were released as part of standard public-records procedure.)

The actual term sheets from the city of Anaheim were redacted from the Angels missives, so there’s no way of knowing exactly what Moreno is objecting to here. The one piece that wasn’t redacted was that the Angels owner doesn’t want the city to conduct an appraisal of the value of the land that he would be getting for free in the deal — something that is a huge sticking point, because it could be anywhere from $30 million to $380 million —  because it could “be misunderstood by the general public as to the value that the City is providing” and “will lead to an unworkable situation.” Anyone here think that means anything other than “Don’t tell people what we’re getting out of the deal, or the jig is up!”?

L.A. sportswriter really bugged by the fact that the Angels don’t have a new lease deal already

Something has to give in stalled stadium lease negotiations between Angels and Anaheim

No. No, it doesn’t.

The above column, by L.A. Times sportswriter Bill Shaikin, is a stellar example of concern-troll journalism, claiming respect for Anaheim Mayor Tom Tait’s opposition to a free-land deal for Angels owner Arte Moreno that could be worth as much as $380 million in public subsidies, while simultaneously shaming him for not just buckling under and cutting a deal, summed up neatly in this classic sentence: “This is a tip of the cap toward a mayor who has been so incredibly successful in framing the debate surrounding the Angels‘ stadium lease negotiations that the process has ground to a dead halt.” The arguments presented by Shaikin — who’s done some good work in the past, but for some reason seems to have made a new Angels lease a personal vendetta — come down to these:

  • Moreno wants to spend $500 million of his own money to “revitalize property owned by the city,” which in this case means developing the land that he would get from the city for free, for his own use.
  • The other four members of the Anaheim city council haven’t been vocal in opposition to the deal, “apparently taking political cover behind Tait.”
  • The only way to develop the Angels parking lot is to build parking structures for Angels fans to park in, and this makes the Angels “the most logical developer.”
  • $500 million! Did I mention $500 million?
  • Moreno could move the Angels to Tustin.

All of this is reason for Tait to explore whether there’s a reasonable deal to be made here, but it’s hardly a cry for urgency — after all, there’s no indication that Moreno has even seriously explored sites in other nearby towns, and it’s hard to picture Tustin, say, putting together a Cobb County–style sweetheart deal to wrench the Angels away from Anaheim. Talking about development deals is fine and dandy and the proper role of mayors; calling for something to be done now because it’s been months already is the job, I guess, of sports columnists, though given that it’s also how we end up with terrible lease deals that nobody vetted properly, I kind of wish it weren’t.

Angels economic impact study was conducted by subsidiary of Angels’ new concessions contractor

And now for something completely different: actual journalism!

The company that produced a favorable report on the economic impact of the Angels, which city officials have touted as they mull a controversial new lease framework for Angel Stadium, is related to another company that won the baseball team’s food and beverage concession contract soon after the report’s release, records show.

That’s from the Voice of OC, one of the nonprofit journalism sites that’s sprung up in recent years, which reports that the study that found that the Los Angeles Angels generate $200 million an annual economic impact for the city of Anaheim (a figure that the Orange County Register had already thoroughly debunked) was conducted by “Conventions, Sports & Leisure International LLC or CS&L, a subsidiary of New York-based Legends Hospitality Holding Company LLC.” Legends is first and foremost the company that the New York Yankees and Dallas Cowboys set up to run their concessions at their new stadiums, and it recently won the Angels’ contract, too.

The Voice of OC was actually tipped off to this story by one of its commenters, but still, props to them for actually reading their comments and doing the followup reporting. Not to mention props for getting this quote from Los Angeles good-government advocate Bob Stern: “The question would be to them: What were you thinking?”

Angels owner Arte Moreno’s lease subsidy demands are still on hold, in case you were wondering. Given his past behavior, this means it’s probably about time for him to threaten to move to Rancho Cucamonga.

How a rumor becomes a news item: The Angels-to-Irvine story

There’s a fascinating little experiment in journalism echo-chamberism on display in today’s Los Angeles Times, where Bill Shaikin and his editors perform the following bit of quote alchemy:

  • Al Murray, the mayor of Tustin, the small suburb that met with Los Angeles Angels owner Arte Moreno last week to talk about a possible stadium project, told Shaikin on Tuesday night that (in Shaikin’s words) “he had heard that Moreno had talked with the city of Irvine as well.”
  • Representatives of both the Angels and the city of Irvine denied that any talks had taken place, and an Irvine city spokesperson said that its existing redevelopment plan “does not contemplate in any way a sports stadium.”
  • Shaikin led off his story with the tease: “Is it Anaheim or Tustin for the Angels? The mayor of Tustin does not believe that.”
  • The Times editors slapped on the headline “Could Angels put Irvine into play for stadium?” providing an outstanding example of Betteridge’s Law of Headlines.

Could the Angels move to Irvine? Sure, in theory. They could also move to just about anywhere else in the greater L.A. area, or to Hawaii, or to my dining room. (I may need to move some boxes to make room for the necessary luxury suites.) Anyone can throw darts at a map and pretend that what results is a legitimate move threat — and as we’ve seen before, team owners love to do just that when trying to throw a scare into their current hometowns during stadium talks.

The most useful bit of info in Shaikin’s piece is his observation that wherever he goes, “because most California cities no longer pay to build venues for professional sports teams, Moreno’s best bet might be to pay the stadium cost and hope to recoup the investment from surrounding development.” That’s certainly the plan in Anaheim, but the amount of land to be turned over for redevelopment to make it worth Moreno’s while is so vast that Anaheim officials are balking; would this kind of plan make any more economic sense in Tustin, or Irvine, or (where’s my dartboard?) Rancho Cucamonga? That’s outside the scope of Shaikin’s article, sorry — tune in again tomorrow to latimes.com and maybe you’ll get some real news!

 

Angels owner declares “stalemate,” visits officials in another suburb that’s also not Los Angeles

Los Angeles Angels owner Arte Moreno declared on Friday that talks to have the city of Anaheim give him land valued at somewhere between $30 million and $380 million in exchange for not exercising an opt-out clause were “at a stalemate” and that “we haven’t crossed that line yet” of shopping for a new home. Then the next day, a team spokesperson revealed that Moreno had earlier in the week met with officials from the city of Tustin about building a new stadium there:

“We did have an initial meeting with Tustin,” said Marie Garvey, a consultant retained by the Angels to handle stadium negotiation issues. “We’re still in discussions with the City of Anaheim, but we have to take a long-term view and explore all of our options to insure we have certainty for the future.”

So, for those of us not familiar with SoCal geography, what the heck is a Tustin? It’s another Orange County suburb about five miles down Interstate 5 from the Angels’ current home, and Cuba Gooding Jr. grew up there, and, um, that’s about it. Tustin also has a decommissioned Marine Corps Air Station that’s being targeted for redevelopment, and which is so massive (1,600 acres) that it shouldn’t have trouble finding room for a new stadium.

Where Moreno would come up with the money to actually build a stadium in Tustin is another story — would he want free development land there, too? — but that’s not the point of these kinds of meetings, which Garvey described as being “in the infancy stage.” It’s about creating leverage. Now to see if Moreno can get a bunch of Angels fans to show up at the next Anaheim city council meeting with “Don’t make us drive five more minutes to the game!” placards.

Anaheim still has no clue how much land it wants to give Angels is worth

If you’ve been following the controversy over the Los Angeles Angels‘ stadium lease controversy, you’ll recall that the key dispute is over the value of the development rights that Anaheim would be granting to the team: estimates are anywhere from $30 to $380 million, which is kind of a big difference when you’re talking about  $150 million in renovations that the Angels would putting in as their part of the deal. So, how’s that calculation going, Voice of OC?

When Anaheim officials unveiled new stadium lease negotiations for the Angels last September, one of the biggest open questions facing taxpayers was the value of 155 acres of city land being traded for a $1-per-year lease.

Nearly six months later, city officials still can’t answer that question.

Alrighty, then!

The latest non-report comes in the wake of comments Tuesday by city sports venue manager Tom Morton, who said that an appraisal commissioner in November is underway, and should be ready in March — though according to the Voice of OC, he added that “it will be up to the City Council to decide whether to make it public.” Hopefully they’ll do so before actually voting on the deal, but maybe they think they can don’t have to if they can only avoid all being in the same room.

Angels defend getting more in free land than they’d spend on stadium: “Hey, it was city’s idea”

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.

Angels offering to take on renovation costs they’re already required to pay for

Still catching up on Los Angeles Angels stadium news from the Orange County Register, whose paywall appears to make its articles invisible to Google News bots. Anyway, last Friday, reporter Martin Wisckol revealed that the $130-150 million in stadium renovations that the Angels had previously been reported as willing to take on in exchange for free development rights to the Angel Stadium parking lots — something worth anywhere from $30 million to $380 million, depending on who’s counting — is in fact already the team’s responsibility:

Under the proposed update of the lease, “Angels assume responsibility for all maintenance” estimated at “$130M – $150M over the next twenty years,” and the city would be “relieved from all responsibility for stadium maintenance, repair and capital improvements,” according to a city staff PowerPoint presentation to the City Council on Sept. 3.

But a close reading of the current lease, valid until 2029, shows that the team is already on the hook for those $130 million to $150 million in renovations.

Now, to some degree this is a rhetorical point: Angels owner Arte Moreno has an opt-out clause in his lease, and is threatening to leave (to where, he’s not saying) if he doesn’t get public subsidies via the land gift, so it’s still “I’ll pay to fix up the place if you let me build stuff in your parking lot.” But it’s not a swap of two concessions, as the city of Anaheim had been describing it, but more an offer not to shoot this dog if Moreno gets his free land.

It’s another good piece from the Register, and tends to mitigate somewhat the paper’s dirt-slow response to cover the proposed lease deal at first, as noted by John Mecklin of the Columbia Journalism Review. And it’s certainly far better than the Los Angeles Times’ coverage of the issue, which as Mecklin says featured the “journalistically unusual move” of having sports reporter Bill Shaikin write an opinion column tout the deal as being “as good as it gets for Anaheim.” Shaikin is supposedly still on the Angels lease beat for the Times, but it doesn’t look like he’s actually written anything on it since the opinion column — unless he has one of those Google bot cloaking devices, too.

Anaheim’s proposed land gift to Angels could pay for entire stadium reno cost

Not sure how I missed this at the time — especially since I’m quoted in it — but in the midst of a long, excellent article in the Orange County Register last week about how the study commissioned by the city of Anaheim commission on the economic impact of the Los Angeles Angels is full of crap (sorry for the technical economics terminology), there was hidden this tidbit about how the Angels are looking to pay for planned renovations to Anaheim Stadium:

[The proposal] would grant the team a 66-year, $1-per-year lease on 150 undeveloped acres around the stadium, which the team could develop according to the existing high-density residential, commercial and retail zoning. All tax revenue generated by the development for the city would be rebated to the team, according to the team’s proposal.

In return, the city would no longer have to make its $600,000 annual maintenance payment for the city-owned stadium. The Angels would pick up that tab, as well as the bill for an estimated $130 million to $150 million in needed renovations.

How much is free development rights to 150 acres for 66 years worth? The OC Register cites figures of anywhere from $30 million to $380 million, either of which would be far more than the value of getting out from under that annual $600,000 maintenance payment. (Picking up the bill for renovations to their own stadium isn’t actually so much an Angels gift to the public as a gift to themselves.) Plus, under the new deal the $2 ticket tax that the Angels pay on every ticket sold after the first 2.6 million would only kick in after the 3 millionth ticket — costing the city an additional $800,000 a year.

Depending on how you value the land, then, the Angels are either looking at getting a development deal that will pay for around 20% of their renovation costs, or one that will pay for their entire nut and leave them with a ton of profit left over. Since it seems kind of important to the story, it’d be nice for some local journalist to actually attempt to figure out what that land is worth — maybe one of these days.