The Anaheim City Council has voted unanimously to void the 2020 agreement to sell Angel Stadium and surrounding property to Angels owner Arte Moreno and SRB Management LLC, kicking off a legal process Wednesday that introduces conflict of interest concerns.
The decision during Tuesday night’s City Council meeting came a day after Harry Sidhu resigned as mayor of Anaheim amid an FBI investigation alleging that he fed insider information to the Angels in the hopes of a substantial campaign donation, as well as cheated on sales taxes for a helicopter he bought.
The City Council received notice May 16 of a federal investigation into Sidhu’s involvement in the sale of Angel Stadium and the site proposal. The council asked the city attorney to inform the Angels of the decision to void the deal Wednesday, according to a report in the Los Angeles Times.
Councilman Stephen Faessel told The Times the termination of the deal, “is going to be litigated for the next several years” and said he did not anticipate a window to reopen negotiations with the Angels before then.
The agreement to sell Angel Stadium included commercial and residential plans to develop the land around the stadium.
“The stadium proposal was evaluated and approved on its merits,” Mayor Pro Tem Trevor O’Neil, who is handling the duties of mayor per Anaheim’s city charter, said in a statement released by the City Council on Tuesday. “However knowing that there may have been an element of corruption that brought the final product to us, we cannot move forward in good conscience.”
The stadium site sale was immediately voided because of the council’s actions and SRB Management LLC, made up of Moreno and his family, was notified of the sale void.
Moreno could sue the city for breach of contract, The Times reported.
The City Council’s next step is to start a legal process that will involve filing a motion for declaratory judgment in Orange County Superior Court based on concerns of conflict of interest and that the transaction was “not at arm’s length,” according to a statement from the council.
Additionally, the council ends prior negotiations involving the sale of the stadium site that started in 2019 and resulted in agreements approved in September and October 2020.
The city-owned stadium and 151 acres of land was set to sell for $320 million, paid partly in cash and partly in affordable housing and a park built on the stadium site.
The deal was subject to updated sale and development agreements, and reflected a now-paused settlement with California related to the Surplus Land Act, that were supposed to go before the City Council in June, the final step before the close of the sale.
The Angels have a lease to play at Angel Stadium through 2029 with the option for three three-year extensions through 2038.
Rep. Lou Correa, D-Santa Ana, told City News Service that the city should never sell the stadium property, and added that instead of selling the stadium, the city should move to buy the baseball club.
“Anaheim should never sell that property,” Correa said. “If you’re going to do anything you lease, you don’t sell.”
Selling the property cuts off a stream of revenue, Correa said.
“You’re not Orange County in bankruptcy in 1994 where you have to sell everything at fire sale prices,” Correa said. “That’s not where Anaheim is at. Instead of the Angels buying the stadium, Anaheim should buy the Angels. Green Bay does it. We could do it too.”
Correa, along with Assemblyman Tom Daly, D-Anaheim, and state Sen. Tom Umberg, D-Santa Ana, have sent letters to the city demanding more accountability on the proposed sale.
Umberg told CNS that he agreed with Correa.
“I like that idea,” of the city acquiring the Angels, he said. “But the problem with that is that the taxpayer base to buy the Angels is too small, so maybe what we do is like what is done in Green Bay.”
The Packers are owned by Green Bay Packers Inc., a publicly held nonprofit corporation with 361,300 stockholders.
In fact, Umberg said he pitched a similar idea when the NFL was looking to locate another team in the Southland. Under that scenario, anyone could buy a share of the team, not just Anaheim residents, Umberg said.
“Obviously, I’m glad” the City Council dumped the deal, Umberg said. “Tom Daly and I have been questioning this sale since 2019.”
Umberg, a former prosecutor himself, said he was “surprised by the depth of insider training and corruption” alleged in the FBI affidavits.
“The best result for all concerned taxpayers, etc., is to start over again and renegotiate a lease or sale, starting today,” Umberg said.