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Moreno, investors walk away from Angel Stadium sale–for now

Anaheim development plan Angels June 2020

After a tumultuous few weeks that saw an FBI investigation of the Angel Stadium sale to SRB Management followed by the resignation of Anaheim Mayor Harry Sidhu, SRB announced they would agree to cancel the sale without suing for a $5 million penalty plus legal costs.

The sale of 150 acres and Angel Stadium to SRB Management, a group led by Angels owner Arte Moreno and investors, had been identified by FBI agents as part of a larger investigation of alleged corruption from Sidhu and other city government and city leaders. The FBI investigation yielded allegations that Sidhu had leaked confidential information to the Angels during negotiations and was pursuing a deal in hopes of a million-dollar campaign contribution from the Angels. (It’s important to note Sidhu has not been changed with any violations of the law.)

The city had already canceled their end of the sale agreement and was asking SRB Management to agree, saying the sales process had been tainted by Sidhu. The sales agreement called for a $5 million penalty plus legal fees should the sale be canceled by the city. If the Angels sued, in theory the city could have fought that penalty clause in court, arguing that illegalities from city reps tainted the entire process–but without the Angels actually accused of any wrongdoing, it’s hard to see a court agreeing to penalize the party without dirty hands. Plus, a lawsuit would take years to wind through the court system, which leads to the obvious but unsaid rationale for settling: this allows SRB Management and the city to begin talks on a revised sales agreement. From SRB Management:

“For almost a decade now, Angels Baseball has been working with the city to be able to continue to deliver a high-quality fan experience at Angel Stadium and create certainty on the team’s future in Anaheim,” SRB spokeswoman Marie Garvey said in a statement.

“There has been a lot of misinformation and falsehoods stated throughout this process and we want to be clear, we negotiated in good faith with all elected officials and city staff and created a fair deal that was good for Anaheim and Angels Baseball,” she said. “Given that the City Council unanimously voted to cancel the stadium land agreement, we believe it is the best interest of our fans, Angels Baseball, and the community to accept the city’s cancellation.

“Now we will continue our focus on our fans and the baseball season.”

Angels owner Arte Moreno and his investment group were seeking 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, though in the end the commitment to affordable housing was scaled back, much to the chagrin of city residents who rightly see the issue a very important one in Anaheim. The goal was a mixed-use development a la The Battery. Moreno would also have the power to decide whether to build a new ballpark at the site or renovate Angel Stadium.

Many expect to talks to launch on a new, revised sales agreement. There are some opponents of the dropped Angel Stadium land sale who will continue speaking out on a deal, arguing that the 133 acres are worth more than the city wanted and should be used for more pressing uses like affordable housing. The team, however, has a lease for Angel Stadium through 2029 and can be extended through 2038. It also gives the Angels some say in what happens around the ballpark, so any attempt at development require some level of buy-in from the Angels. It’s really not a simple situation for a developer, though many see it likely more affordable housing will be part of the mix should the city and Angels kiss and make up.

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