The Angels are staying in Anaheim

The Los Angeles Angels of Anaheim have been fighting for some time with the City of Anaheim about Angel Stadium, the fourth oldest MLB venue in the United States. Until last month, the team’s lease was set to expire at the end of the 2020 season, thanks to a one-year extension executed earlier this year. Fortunately for Halos fans, the team and city appear to have finally reached an end to their impasse. Per the Los Angeles Times’ Bill Shaikin:

The Angels and the city agreed Wednesday on a deal under which a company affiliated with Angels owner Arte Moreno would buy Angel Stadium and the surrounding property for $325 million. The city would not contribute to the cost of either renovating the stadium or building a new one, and the Angels would decide whether to upgrade or replace the current stadium.

Under the deal, the Angels are committed to playing in Anaheim through 2050, with options that could keep them there through 2065. The Angels were faced with a Dec. 31 deadline to opt out of their stadium lease or remain bound to it through 2029.

This is the agreement.

On the surface, this seems like a good deal for both sides. The municipality rids itself of any obligations to pay for improvements to the stadium, whilst simultaneously ensuring that the team remains in the Anaheim area for the next three decades. Meanwhile, the team gets a guaranteed venue and the surrounding land, to develop as it sees fit.

Unfortunately, these things are never quite that simple. For one thing, there’s that purchase price. The total price for the stadium and surrounding land is $325 million, but that land comprises one hundred fifty-three (153) acres. A few years ago, an independent study found that just the land was worth $325 million. According to the Orange County Register,

The last appraisal was done in 2014, during ultimately fruitless negotiations under the prior mayor, Tom Tait. That analysis concluded the land’s value by fall 2016 would be $225 million to $245 million if the baseball stadium use continued, and $300 million to $325 million if it was made available for development – it was assumed the city would make more money by selling the property rather than leasing it out.

The $325 million figure applied if the stadium was demolished first, and the $245 million figure didn’t include the stadium at all. In other words, Arte Moreno basically bought the land for development and got a stadium thrown in for free. Notably, a new appraisal of the land and stadium conducted earlier this year were not released to the public until last week. That appraisal officially valued the land at $300-325 million, but only with 12,000 parking spaces; with just 6,000 parking spaces, the land was valued at almost $500 million. In other words, this new appraisal arguably means that the team spent $180 million less than the land was worth.

It gets worse for the City. That $325 million total is heavily deferred.

Under the agreement, [Moreno] would make a series of deposits. The total deposits could range from $70 million to $100 million, and the payments to the city could be staggered from 2020 through 2023, depending on how soon SRB submits development plans to the city.

The bulk of the payment would be due when the deal closes, as late as 2025. It is unlikely the city would get all $325 million. The amount could be reduced by incentives the city said it would consider in order to secure affordable housing and parkland in the project, and employ local workers.

In other words, the Yankees are paying Gerrit Cole more than the Angels are paying to buy their stadium and 153 surrounding acres of land. The Angels may not have gotten Cole, but 153 acres of prime real estate and a baseball stadium is certainly a nice haul. But that’s not all. You see, the Angels can reduce the sale price based on the amount and type of development on the surrounding land.

For instance, Sacramento agreed to pay $33 million for the development of a new Major League Soccer stadium. The Angels have not said whether they plan to rebuild or replace Angel Stadium.

Those reductions would be included in a development agreement. That would set forth the plan for the site — shops, restaurants, homes, hotels could be coming — and would say whether the Grove theater would be retained or demolished.

But the development agreement is not anticipated until next year, which one Anaheim city councilman said would put the council in the position of approving a land sale without any guarantee of what the city’s payment might ultimately be, and without any legal commitment for what SRB might do with the land or when it might actually build.

So we already know the total figure is closer to $290 million, and could be significantly less. In fact, with plans for development not due until 2021, the Angels have nearly two years to draft means of lowering that price tag.

So with all of this taken into account, it seems that the Angels have made quite the coup. They’ve purchased valuable land at a discount, will receive further discounts for development costs, and stand to recoup large amounts of money from the developed properties. In short, this is as good an outcome as the team could possibly have hoped for.