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** Author Update, 12/5/19– As I suspected, the appraisal released by the city specifically excludes any value contributed by the stadium itself, meaning this is– in fact– a bullshit appraisal. In addition, Anaheim gives up all lease revenue through at least 2025 and will not receive the bulk of the sale value until after 2025, meaning (after discounting for five or six years), the present value of this proposed deal is substantially less than $325,000,000. As described below, Arte and the Angels are either getting the land for free or the stadium for free, because they certainly aren’t paying for both. **
DON’T GET BAMBOOZLED BY FINANCIALLY ILLITERATE SHILLS. THIS IS NOT A GOOD DEAL.
The City of Anaheim announced a preliminary deal for the sale of public property surrounding the stadium, along with the stadium itself for $325,000,000.
I’m not going to waste your or my time with an in-depth analysis of this deal, here’s what you need to know:
The proposed sale price is about what the replacement value of the existing stadium is today. It means the Angels are getting the entire parking lot for free. It’s a huge infusion of cash for the city, but the return on investment is absolutely atrocious. It’s not the worst the City could do, but on its face, this is not putting Arte Moreno to the screws to protect the best interest of the taxpayer. A reasonable price for a straight up sale of the stadium and parking lot is somewhere north of $500,000,000, which leaves plenty of margin for development profit and 10-15 years of existing stadium use. That’s about $200,000,000 left on the table for … who knows why. $200,000,000 buys a lot of parks.
Outline of what’s being sold
The good news, this gets Anaheim out of the business of being a landlord. The bad news, there’s nothing in the proposal to prevent a future giveaway to “assist” development of the parking lot. According to the City’s press release, a development agreement will be put forward in the Spring of 2020. Expect major concessions to building trades and developers.
Also good news, this is miles better than the very best that Kris Murray, Jordan Brandman, and Lucille Kring could do in 2013. Anaheim has 324,999,994 reasons to thank Tom Tait. Harry Sidhu and his paid supporters will celebrate this as a massive victory, but the reality is this pile of money dropped into Anaheim’s treasury is the direct result of having a Mayor with a spine from 2010-2018. If the Kleptocrats got their way 6 years ago, Anaheim would have exactly $6.
It’s not a product of one who bent over backwards for half a year pretending to not be a veteran, just a civilian in olive green garb riding a camo humvee in a parade, but hey Anaheim– you get what you vote for.
What do you think — should Spitzer prepare to investigate whether this is truly an arm’s length transaction?
And is the city going to upgrade the amenities, out of the “profit” from the sale, prior to its consummation?
And will Arte pay property taxes on both stadium and grounds?
The answers to those last two questions will determine whether this price is just pitifully low — or whether we’ll need to find another word.
Considering they had one meeting to get this all ironed out, including a development proposal for this spring (three months ain’t long), the likelihood this is on the up and up seems very, very low.
Want to interview Spitzer?
I would be very surprised if he took that call.
But if you had an inflated sense of self-worth you might hold out hope.
You’re reporting for us, Ryan. Give it a try! Don’t let Zenger’s poison frog spit scare you!
Right on cue.
OK, I’ll be the one to contact Spitzer’s office. Trying to get a lick of honest work out of Zenger here is always a losing proposition.
I talk to Spitzer probably the most regularly of anyone here. Let’s get off line and figure out exactly what I should present to him.
I’d just as soon do it in the open, in a new post — it works for the House Judiciary Committee — but it’s up to you.
Go ahead, we’ll all hash that post over, and then I’ll make sure Todd and his people see it and respond to it.
Ryan, help me out with my talking points. Everything Big Box wrote today is true, right? And Anaheim HOME is correct about the potential for flipping it for half a billion?
Flipping it for a billion seems odd, but so does having an agreement to play in Anaheim until 2050 with extensions. Extensions of what? They own the facility, what binds them to stay?
Of BB’s comments, the most important is that Arte Moreno is not stupid. He is W-I-L-D-L-Y better at negotiating than anyone at the City, and given his background in billboard sales, I’m sure he knows how to drive a truck through loophole the size of a pea.
Not a billion. Half a billion. This is based on the $900MM supposed valuation.
You know, contracts can be breached. Arte could sell out to Disney before 2050 and argue that he can pay back a proportional amount of the sale. Would a Disney-owned Anaheim City Council even fight him on that? That’s the basic problem here: Arte is on both sides of the negotiation. (And as we wondered years ago, one has to wonder who’s going to get any transaction fees on the parking lot issues. Would it be someone who can then dole out money to candidates, like Pringle?)
If Ryan would conduct an investigative piece on Arte Moreno, there would be many skeletons uncovered. Moreno is not a nice guy. He is a liar and a crook. He did many shady dealings while the CEO of the Billboard Company.
Moreno’s BFF, VP Sales, drinking and party buddy used illegal drugs all the time. Moreno knew it, and never said a word.
As for Tyler Skaggs, does anyone really believe that moreno and or carpino did NOT know about the drug abuse? Of course, they did and they did nothing.
Wasn’t the appraisal something like $900,000,000?
That’s the rumor.
Once the deal is done, it will not long be exempt from production through the CPRA. That revelation may end Disney’s empire!
There should be an audit of what has transpired in this so-called “negotiations” literally a baseball balls and strikes analogy, is good here, I want to see the absolute, who did what and where,and who said what and when.
The current Appraisal ranges from about 225 mill to 475 mill depending on the scenario. It is posted on Anaheim.net
Yeah Wes, $225-475 encumbered with ANGELS. $900,000,000 on 1/1/2021 without lease!
So the question is – is keeping the Angels worth $575,000,000 to the City of Anaheim?
No — but if the rest of the county, which also benefits from their presence, wanted to kick in, they certainly could. (They won’t.)
This a good deal.
It’s called a compromise.
A compromise? Leaving half a billion dollars on the table is a good deal? In what weird alternative reality?
Lose the Angels and win $500,000,000. What a lot of zeroes.
It’s not a good deal.
Saying it’s a good deal is like saying getting punched in the mouth is a good deal because you could have been stabbed instead. Glorious compromise.
Math doesn’t compromise.
Ryan, Arte Moreno has a violent temper and is vindictive. He goes after EVERY person who dares question him or calls him out. Be careful
I understand your desire to remain anonymous.
The expensive appraisal bought by the City of Anaheim is seriously flawed. On page 46 of that appraisal states “best usages of the property” which is noted as residential use at $499 million.
Arte Moreno knows that the best use of the property is as another Disney amusement park which gives it an appraisal value of $900 million.
Arte buys at $350 million, sells for $900 million, a cool profit of $550 million. And the stupid people of Anaheim will never realize that they got screwed again by their city council.
The city should sell the land to developers for a lot more than that and be ensured of tax revenue indefinitely. This guy is a parasitic thief in cahoots with our corrupt city government, complicit in withholding crucial information from voters pertinent to the city’s financial future, and should be run out of town if we know what’s good for us.
Evidently now the city I live in (for the moment) could be added to the growing list of retail casualties with news of ITS “Black Friday” sale (to only ONE customer). The “Buy a Stadium – Get 160 acres of parking lot for FREE !” promotion. Arte didn’t even have to get up at 3AM to avoid missing out ! (The “missing out” was for Anaheim residents, awake or asleep !)
So HOW long did these “negotiations” actually take ? Time enough for a cup of coffee to cool ? Time enough for a handshake ?
And what were their contents, with NO DEFINED POSITION FROM THE CITY since NO PUBLIC INPUT was part of the process , and even the APPRAISAL kept under wraps ? Will we now have a shot at taking the “MLB Laughingstock” award from from Miami for its Marlins Stadium deal (less acreage, and THEIR City IS prominently part of the team name )
In their giddy haste to meet a SELF IMPOSED deadline, was ANY KIND AT ALL of an economic study done by the City on the offer ? Or before it ? Will the public see it any time soon? What about parking and admission taxes? Is past immunity to them continued or resurrected ? Does now-private ownership really close the books on costs to the City, or are future tax diversions in store to be extorted for expected development ?
Alleged rumors of Moreno’s sale of the team would not surprise me in the least – after a jackpot from a BROKEN slot machine, even the stupidest player heads for the exit so as not to feed his good fortune back to the source. Arte Moreno has never been stupid. Sadly the same cannot be said for his counter parties. The decision of “Never attribute to malice (corruption) what can be explained by incompetence” seems to have the fence straddled in this City, but could a donation to a long past election’s campaign committee sway that balance? Wearing out another cliche-
“THIS is why Anaheim can never have nice things !”
Thank you very much Vern, for another fine article. I Think you are being extremely generous calling the majority of the council financially illiterate I personally believe that those who crafted this deal ( probably more like Pringle them Sidhu) are mostly very well represented in financial the arts any any deal has had been looked at In every way. I my opinion it is no Accident that this deal leaves the Anaheim citizen holding the short end of the stick
Sidhu is a grinning/scowling buffoon. This rotting deal was presented to him wrapped up in a bow for him to pass along. Sidhu couldn’t craft anything without Popsicle sticks.
Ryan wrote it, sir. I’ve been busy lately with music.