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.
I love this site and am a frequent reader. As much as I love new stadiums and stadium architecture, I am often appalled by how much public money gets spent on these things with no lessons ever being learned from other cities.
That said, at least the Angels are renovating their existing stadium – which is now 49 years old – instead of demanding a new stadium like so many other do. I doubt they will only spend $150 million on the renovation. From what I heard last year from a team employee, $150 million would only cover basic retrofitting of the structure and updating the plumbing, electrical wiring, etc, without any cosmetic upgrade. I believe that they have a much grander renovation in mind including re-doing the entire outfield seating that would cost more in the $300-400 million range.
In my opinion helping them by giving up potential development rights is a lot better than committing actual existing taxpayer money, although I agree that the city should not be giving up all future tax revenue as well.
Taxpayers will have to make up what the Angelz
aren’t paying out, that will be actual taxpayer money – the shortfall has to be made up even if it’s in the future.
I wonder about that 350-400 million number.
1. What is the City obligated to do under the contract and what are the Angels supposed to do as far as remodeling.
2. Have the Angels made a specific commitment to what they are planning to do or legal could they pull a bait and switch?
@bob: That $300-400 million number was told to me by a front office employee during a tour of the stadium, so you can take it with a grain of salt. Who knows what they will actually do.
1. Under the contract the city is giving up development rights to the stadium parking lot and potential tax revenue for any development for 66 years. But I don’t believe they will obligated to make any cash payments under any circumstances.
2. I don’t know how a bait and switch would work unless the team developed the area and didn’t improve the stadium at all. But that doesn’t make much sense. They want a nicer place to play like everyone else.