Here it is tomorrow as promised, and yup, the California Department of Housing and Community Development sure did tell the city of Anaheim that its sale of the Angel Stadium property to Los Angeles Angels owner Arte Moreno was illegal. The state’s letter, issued yesterday, shoots down the city’s arguments:
- Anaheim officials argued that they had entered into an exclusive negotiating agreement with Moreno before the state’s Surplus Land Act went into effect in September 2019; the state notes that not only did the Anaheim council consider a proposal for a binding negotiating agreement earlier in 2019 and reject it, but the holding company that the city ended up selling the land to didn’t even exist until November 2019.
- The city claimed that its lease with the Angels for the stadium would have prohibited selling the parking lots around it for affordable housing; the state notes that since Moreno plans on leaving the stadium there and building housing (among other things) around it, this is patently false.
Anaheim now has 60 days to choose from among several options: Set aside 80% of the land for affordable housing; declare the land to be “exempt surplus,” and re-bid it out again to anyone who agrees to build at least 25% affordable housing; or declare the land “surplus” and give affordable housing developers 60 days to offer to buy it.
The letter doesn’t mention anything about the reported $96 million fine that Anaheim would have to pay if it didn’t meet the state’s requirements, but according to the Los Angeles Times, that’s still in play. The fine is set at 30% of the announced sale price, which was officially $320 million, though the city gave Moreno so many credits for building affordable housing and parks that the actual price ended up just $150 million. (This suggests, by the way, that Anaheim should have tried to get around this by selling the land for $1 and having Moreno instead pay $150 million in lease payments or something, reducing any potential fine to just 30 cents, but I guess none of the bright-light lawyers who concocted this deal thought of that in advance.)
Anaheim Mayor Harry Sidhu said yesterday that “we disagree that the land is surplus” and “we’ll work with [the state] to come up with a solution,” but the state doesn’t seem inclined to talk anymore. The Anaheim city council held a closed session last night on the grounds that it had “decided to initiate or is deciding whether to initiate litigation,” so a court challenge is possible as well.
Yeah, yeah, you want to know, but is this going to torpedo the whole cut-rate sale of the stadium land, or what? Too soon to tell, though it sure seems unlikely that Anaheim would let a $96 million fine stand in the way of giving away land at a $350 million discount to make the local baseball team owner happy. Everything is going to be up in the air for a while though, at least for the next 60 days and at most for as long as a lawsuit takes to resolve, so at least in theory, anything can still happen.
Thank you, Neil, for bringing some level-headedness to this story.
None of the articles I’ve read — even articles which include healthy portions of editorializing — mention the reality that city will likely eat the $96 million and let the deal move forward as planned.
FYI. All legal fees incurred by the City of Anaheim as a result of the transfer of property to the Los Angeles Angeles are to be paid by Arte Moreno.
At the July 21, 2021 Anaheim City Council Meeting, Anaheim City Attorney Rob Fabela stated “that threshold hasn’t been crossed yet,” in response to Councilman Jose Moreno’s question on this matter. Wonder if and when that threshold will be crossed?
Does a state fine count as a “legal fee”? Or does this mean Moreno has to cover paying the lawyers to fight the fine?
Councilman Jose Moreno’s question was directed toward the latter issue, “City of Anaheim legal fees related to the California Department of Housing and Community Development.”
Based upon the above, that would also include any litigation in the courts to challenge the California Department of Housing and Community Development’s determination.
Props to Anaheim City Councilman Jose Moreno.
Councilman does his due diligence and homework.
Councilman gets to the crux of the matter with his questions and motions.
Councilman conducts himself in an intelligent and professional manner, engaging in civil discourse.
Councilman doesn’t play (he fights the good fight, even when the outcome is a forgone conclusion).
Councilman clearly understands his role, “his constituents have placed their trust in him to represent their interests (to be their voice) in Council Chambers.”
Don’t call him a pol. Councilman Jose Moreno has earned his due and your respect. He is an “elected official.”
Arte Moreno has donated $100s of thousands of dollars to the city council members that voted to give him a deal.
The land price was manipulated by Hong Kong-based LT Commercial Real Estate Ltd.
They bought an adjacent 14 acres for a reduced price that included a land trade to illegally reduce the value of the 153 acres.
This makes it a RICO case.