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Will 2022 see an end to Angel Stadium development standoff?

Anaheim development plan Angels June 2020

The sale of Angel Stadium and the 153-acre ballpark site turns on whether Anaheim must first offer the land to affordable-housing developers–and the answer to that issue isn’t entirely clear.

California’s Surplus Land Act requires municipalities selling parcels must first offer it to qualified affordable-housing developers, who will then be required to set aside a percentage of any new housing units for affordable housing. We’ve see it in play in San Diego, where the state directed city officials to rebid the sale of 48 acres for redevelopment of the Pechanga Arena area. The result: A second round of bids from big developers that added affordable-housing partners.

After years of negotiations, Angels owner Arte Moreno and the city reached an agreement for Moreno and his investment group to buy the 20-acre Angel Stadium site and an additional 133 acres comprising 12,500 parking spaces for games and events, and City National Grove of Anaheim, a 1,700-seat theater. The total cost: $150 million in cash and $170 million in community benefits, including affordable housing. The goal was a mixed-use development a la The Battery. But that’s not enough, warn state officials: they raise the possibility of requiring a new bid process for the land that explicitly meets state guidelines.

Whether the Angel Stadium sale actually falls under the Surplus Land Act is up for debate. City officials argue it does not because of some unique conditions in the Angel Stadium lease–basically, the team has the power to veto any housing at the ballpark site should it not land the parcel and just occupy the ballpark as a tenant–making the team the only qualified buyer for the site. And they’re willing to go to court to prove it.

Which echoes the debate over the future of the 48-acre parcel over the years. An appraisal of the 153-acre site commissioned by city officials put the value at $500 million–but only if Angel Stadium and the Angels remain. Tearing down the ballpark and allowing the Angels to move would diminish the value. That’s why the city reached an agreement with the Moreno investment group for a $320-million valuation, albeit with plenty of conditions, including the return of $170 million to subsidize affordable housing, and committing Moreno to a ballpark renovation and associated development.

With the city threatening legislation over how the Surplus Land Act applies to Angel Stadium and the unique conditions surrounding the sale, the state may back down:

One of those paths could involve the courts. In a Dec. 2 letter to attorneys for the city and Moreno’s company, California Department of Housing and Community Development Deputy Director Megan Kirkeby cited mutual interest in “potential resolution given the uncertainty of litigation.” In a Dec. 10 column in the Orange County Register, Anaheim Mayor Harry Sidhu declared the city believes the affordable housing law “simply does not apply to Anaheim’s stadium plan.”

If the plan collapses, the Angels’ existing lease remains in effect, with the team holding options through 2038. That lease allows for shops, restaurants, hotels and offices on the site, but not housing. The lease also requires 12,500 above-ground parking spaces. Those restrictions, the city argues, would make the site unattractive to housing developers, who could face a hefty cost to buy the land and build parking structures while foregoing revenue from homes for decades….

Kurt Strasmann, executive managing director at the Newport Beach office of real estate giant CBRE, said Anaheim finding a buyer to match Moreno’s price would be like finding “a real needle in the haystack.” If development could be restricted until 2038 — and with it the return on investment — he said a potential buyer likely would ask that the purchase price be “heavily discounted.”

Development in California is a challenge, to be sure; we’re recommend checking out Arena Digest and our many stories on the hoops San Diego officials are jumping through in order to develop the Pechanga Arena site.

RELATED STORIES: Anaheim moves forward on Angel Stadium saleAngels, Anaheim agree to 30-year team commitmentAngels map out proposed development agreementAngels ballpark plan expected to be unveiled this monthMoreno: No Decision Yet on Replacing or Renovating Angel StadiumGroup Threatening Lawsuit Over Angel Stadium SaleAnaheim Approves Angel Stadium SaleAngels Look to Tap Into Ballpark Development PlanDetails Emerge on Proposed Angel Stadium Land SaleProposal Calls for Angels to Remain in Anaheim Through 2050

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