The state of California and city of Anaheim have been talking at least since June about how to resolve the fact that Anaheim sold Los Angeles Angels owner Arte Moreno his stadium and the land surrounding it at a $350 million discount, when state law requires that any public land be offered up to affordable housing developers first. The talks have now apparently concluded, and the state is having none of the city’s guff:
The California Department of Housing and Community Development is expected to transmit to the city what two sources called a “sternly worded” letter of violation, which would provide options for the city to alter the deal in order to satisfy the law.
The city’s proposal apparently was to have Moreno build a bunch more affordable housing himself, but the state rejected that proposal, and is ready to deny its permission for the sale. That would leave Anaheim with two choices: Pay a fine of $96 million, equal to 30% of the land sale price; or go back to square one and re-bid the land out to affordable housing developers, all the while crossing their fingers that nobody bites so they can go ahead with their original plan.
The Los Angeles Times speculates that Moreno could also be asked to kick in more money to help pay the fine, which is certainly possible if he wants to avoid the uncertainty of whatever would come next, though probably less likely once you consider that if Anaheim really wanted another $96 million from Moreno, they could have just asked for it in the first place, or at least bid out the land in the first place to get the best price. If the city ends up having to eat the state’s $96 million fine, that would bring its total expense for the Angels to $446 million, which would surpass the recently announced Cleveland Guardians deal as the priciest renovation subsidy in MLB history. More on this tomorrow once the press releases finish falling, I’m sure.
Yeah, I think you’ve got it pretty much nailed there. The city is already giving Moreno hundreds of millions. They might ask him to “help out” with the unexpected added cost, and he’ll dust off the Reinsdorf playbook and say “no”.
The city has already given away the farm here. There’s no doubt in my mind that they will simply cave and pay the fine.
Glad to see the state holding to it’s line, but in the end the local politicians will fold like the empty suits they are, and the billionaire will get whatever he wants at whatever meagre price he is willing to pay (which might be less than zero, we’ll have to wait and see).
The only question I have is whether the state will actually use the fine to build AH elsewhere or will it simply disappear into a state fund and be used somewhere for something that has no real benefit to anyone?