The Angels and Anaheim Made a Short-Term Deal

by
January 14, 2019

In October, we talked about the Angels opting out of their stadium lease with the city of Anaheim. At the time, the move required that the team vacate the venue at the close of the 2019 season. Given the rapidly approaching deadline and acrimony between the parties, I speculated then that the most likely outcome would be a short-term deal.

So where does that leave the Angels and Anaheim? Most observers think these two parties need each other, and I tend to agree. . . . The Angels need a baseball stadium, and Anaheim doesn’t want to lose its tenant, even if the team has been a pain in its butt. At the same time, however, we’re already seeing trial balloons floated about moves to Portland or Las Vegas, and neither side is moving with any urgency at this point (though that could and probably will change down the road). I think the safe bet is a short-term, five- or ten-year lease with another opt-out, enough for the two sides to have a brief cooling-off period.

As it turns out, the two sides did end up reaching a short-term agreement, but it was for a far shorter length of time than most observers, including myself, anticipated.

The Angels and the city of Anaheim are expected to agree to a one-year extension of the team’s lease at Angel Stadium, which would keep the team in Anaheim through the 2020 season.

The Anaheim City Council is expected to consider the extension at its meeting Tuesday. Harry Sidhu, the city’s new mayor, plans to introduce the proposal after meeting last week with Angels owner Arte Moreno.

So why the short-term pact? For one thing, both sides are reportedly planning to use the extension to give some breathing room to further negotiations. Alden Gonzalez wrote for ESPN that the team and city have already begun a dialogue.

New Anaheim Mayor Harry Sidhu, sworn in last month, met with Angels owner Arte Moreno last week, and both sides decided that more time would be beneficial.

“We realized a one-year extension will give us adequate time to work collaboratively on a long-term relationship,” Moreno said in a statement.

“From that meeting, it is clear the team’s priority is to stay in Anaheim, if we can work out a deal that benefits our residents, the city and the team,” Sindhu said in his statement. “We need a plan to make that happen, and we need time to make that happen.”

On the surface, this seems entirely reasonable. A deadline at the end of 2019 would make it difficult for extension talks to be productive given the proverbial sword of Damocles hanging over the parties. Still optimism for a deal seems to revolve around the city’s newfound willingness to discuss either a new stadium, or significant renovations to the existing structure, a proposition the city earlier considered a non-starter.

While neither side has commented in recent months on specifics of what they hope a new lease might include, city spokesman Mike Lyster said, “We’re going to look at everything from rehabbing the stadium all the way to building a new stadium.”

But for the team, there’s a catch. While the city is now willing to discuss the concept of a new ballpark, the city is not at all willing to finance such a venture. Instead, the city is proposing an arrangement like the one the Anaheim Ducks tentatively made for their venue, the Honda Center, late last year.

The broad terms of the deal were approved unanimously by the Anaheim City Council at the Oct. 23 meeting and call for the city to sell three Honda Center parking lots, plus a lot across the street, at fair market value to Anaheim Arena Management (AAM), which could be developed into homes, office and commercial space. The vote gives city staff a framework to negotiate the final terms of the deal for later approval by the city council.

The Ducks, who have been based in Anaheim the past 25 years, would sign onto another 25-year commitment with Anaheim after their current agreement ends in June 2023. Anaheim Arena Management, which currently operates and maintains the Honda Center, would continue operating the facility until 2048.

Such a deal would be an elegant solution to the current impasse, changing what the Angels consider to be a “toxic” atmosphere for local businesses into a private-public partnership. At the same time, it’s far from a sure bet; for one thing, a deal like this, while addressing the team’s location concerns, wouldn’t provide the upgraded facility the team desires. And worse, the Ducks’ deal did cut into what the Angels wanted as part of their own mixed-use complex.

[Anaheim] Councilman Stephen Faessel, who otherwise called the proposal a “great deal,” questioned why the deal includes the sale of a parking lot across from the Honda Center by ARTIC without a formal bidding process where other developers could also bid for the property.

“ARTIC is not that far from Angel Stadium, and now we’re likely going to have to negotiate a deal with the Angels, how do we know the Angels won’t give us a better deal?” Faessel said.

City spokesman Mike Lyster later clarified the city is not considering selling the ARTIC lot, but may lease it to the Honda Center.

So despite how the deal has been framed – as a way for the two sides to buy time to reach a more long-lasting arrangement – this extension is no guarantee that an agreement will, in fact, be reached. And most interestingly, the one-year extension keeps open the possibility that the team could consider a jump outside of California – particularly given the recent development that Portland may be ready for a major league team as soon as 2022.





 

Sheryl Ring is a litigation attorney and General Counsel at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author's. This post is intended for informational purposes only and is not intended as legal advice.

12 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
sideshowraheem
5 years ago

I look forward to more cities calling teams bluffs when it comes to stadium financing. Let the teams walk.

37
willl
5 years ago
Reply to  sideshowraheem

Agreed. Are the Angels really going to leave the second biggest market in the US for 23rd largest (Portland) or the 30th (Las Vegas) largest market, which are both about 7 times smaller than Los Angeles?

That’s cutting off your nose to spite your face if I’ve ever seen it.

18
Artie_Fufkin
5 years ago
Reply to  sideshowraheem

This is less about a new stadium and more about the revenue from the parking lots and land surrounding.

Since city of Anaheim owns all that land they keep all that revenue. If I remember correctly Moreno is cool with fronting the cost of a stadium upgrade/renovation but in return he wants to keep parking lot revenue and be allowed to develop some surrounding area with office/commercial buildings. Him and the previous city council were at odds a new city council was just put in this year (hence the 1 year extension to try and negotiate some type of deal)

Angels aren’t leaving. As others pointed out. They have too healthy of a fan base in a large market. They had the Tustin stadium plan and that was the only move that would of been possible. That site no longer exists. Long live the Big A.

12
deadpool
5 years ago
Reply to  sideshowraheem

I think there’s a worthwhile distinction to be made when teams lease these stadiums. If the city doesn’t want to provide the funding to keep the stadium in proper shape, and your definition of proper shape is your own, then the team is left with relatively few options. They can 1) let the stadium fall way behind other, modern, stadiums. 2) They can front the money themselves, in the best case they will be building value into a property they don’t own and in the worst case the more poorly run cities will squander the money or spend it elsewhere. Or 3) they can leave.

My point is that if cities start calling team bluffs as you want, don’t be surprised when the result is that these leased stadiums start falling further into disrepair and obsolescence.

12