Serious Flaws In Doti-Adibi Analysis of Angels Negotiations

The Orange County Register published an interesting opinion article on Sunday by Chapman University President James Doti and economist Esmael Adibi, a “running the numbers” economic impact analysis based on the Angels-Anaheim negotiation framework. It won’t be surprising if some of the usual suspects who assail the Angels negotiations during public comments try to use the Doti/Adibi article as ammunition to lambaste the council majority.

The trouble is the flawed nature of the analysis.  For example, it refers to “proposed lease terms,” when they are instead simply framework within which to negotiate proposed lease terms for the council’s consideration.

Or take this statement, for example:

“In addition, the city would rebate to the Angels sales and property taxes it would otherwise receive from the property and any future development.”

The problem with this statement is it is untrue. Nothing in the negotiation framework requires the city to surrender tax revenue from development on the stadium site. The framework is non-binding, for one thing. And that isn’t what it is, for another. This is the pertinent section:

Economic Assistance: Developer and the City will identify all of the particular taxes and fees which would presently be assessed for the benefit of the City related to development of the Stadium District, and consistent with the applicable state law and local ordinances, and following completion of a feasibility gap analysis, negotiate in good faith with respect to providing Developer with General Fund-neutral economic assistance from those revenues generated from the Ground Lease development pursuant to a mutually acceptable arrangement.

There is no requirement for the city to provide any economic assistance to Moreno — and by baking this non-existent requirement into their analysis, Doti and Adibi have rendered it flawed from the get-go. One has to wonder how closely they read the actual negotiation framework MOU.

Doti and Adibi also examine the issue purely from a “what does the city get?” perspective, when the City Council should be looking at it from the standpoint of how it benefits the community: residents, businesses, property owners, workers and the benefits to them of increased economic activity on the stadium site. it’s more than a question of purely   

There are also smaller but revealing errors:

“Should the city accept lease terms that represent a significant transfer of economic value from the city to the Angels? If it doesn’t, Anaheim risks the Angels’ departure. Such a move would entail the loss in direct city taxes on admissions and other spending generated in Anaheim by the Angels.” [Emphasis added]

Anaheim won’t lose admission tax revenue because it doesn’t tax admission (as much as Jose Moreno, Brian Chuchua and the Los Amigos crowd wish otherwise).

Doti and Adibi dimiss the findings of economic impact study prepared by Convention Sports & Leisure study as “based on unrealistic assumptions,” without specifying which assumptions are unrealistic. Perhaps that is true of some or all, but it’s hard to disagree when one doesn’t know what they are.

There are other problems with the analysis, but the point I am making is I expected something more rigorous, timely and illuminating from two individuals I hold in great esteem.

No comments

  1. Matt, you’re overworking this.

    Using your criteria, ANY analysis of the lease (or MOU rather) is flawed because ANY analysis would assume truths from the framework agreement (which is a binding contract more than you’d care to admit.)

    In fact, their conclusion is down right reasonable and a concession of their own assumptions: “Given the magnitude of that cost, the public deserves diligent scrutiny of all the potential benefits and costs.” It would see you ought to be highlighting (and agreeing) with that.

    I’m only going to comment on one of your comments: “Doti and Adibi dimiss the findings of economic impact study prepared by Convention Sports & Leisure study as ‘based on unrealistic assumptions,’ without specifying which assumptions are unrealistic. Perhaps that is true of some or all, but it’s hard to disagree when one doesn’t know what they are.”

    THE ANALYSIS WAS BASED ON HOUSTON, NOT ANAHEIM.

    I think that’s enough of an unrealistic assumption. I find it very difficult to believe that you don’t.

    • The problem with the article is that it focuses on potential hypothetical possible one day costs the city might incur but then completely dismisses the benefits having a pro ball team in town offers to Anaheim. How is that a fair article for a school to write?

      • Alas, that’s not what it does. It simply concludes the public deserves a rigorous analysis given the POTENTIAL for significant public tax dollars doing out the door narry to return.

        If you want to talk about fair, let’s talk about the city paying a consultant to regurgitate a economic impact study from Houston THREE DAYS before presenting it to the council to justify the MOU yet taking over THREE MONTHS to release an appraisal for the property being negotiated.

        • Matthew Cunningham

          Ryan: I might be more sympathetic to the hand-wringing your side engages while claiming the non-binding negotiation framework was sprung on the public – but I’ve never heard a similar complaint when Mayor Tait and Councilwoman Lorri Galloway wanted to spring on the public — with no public input other than the mob they were trying to appease — an initiative cutting the city up into 8 single-member council districts. The selective outrage on issues like this just come off as opportunism.

    • Matthew Cunningham

      “…the public deserves diligent scrutiny of all the potential benefits and costs.”

      That’s not a conclusion – that’s a re-statement of something obvious, and something no one is disputing.

      “ANY analysis of the lease (or MOU rather) is flawed because ANY analysis would assume truths from the framework agreement”

      You’re getting there, Ryan. That’s the problem with the overwrought, over-the-top claims and predictions being made in reaction to negotiation framework. It wouldn’t hurt the Prophets of Doom to wait until there was an actual draft agreement to debate.

      • You know, you could really say the exact same thing about Arte skipping town if we don’t throw money and free land at him.

        Funny how that works.

  2. There are other problems with the analysis, but the point I am making is I expected something more rigorous, timely and illuminating from two individuals I hold in great esteem.

    Perhaps,then, you should ask the Council to contact with Dodi and Adibi for an actual economic impact study, rather than expecting too much from a relatively brief op-ed piece in the Register.

    Did I miss the article where you nitpicked the CS&L ‘study’ to death? Because that had all of the intellectual rigor of a glossy magazine pullout.

  3. Biff, magazines do a better job than the CS and L report. To begin with, magazines make sure they are made available for our reading enjoyment, not stashed in someone’s super-secret-filing-cabinet, and a magazine publisher would not hold the the fall/winter edition for release in May! But THAT is a lawsuit of a different color.

    The Chapman report, which was only an Op-Ed and not an exhaustive, academic study, WAS as bad as Matt claims it to be..hey even a stopped clock is right twice a day. I was floored at the assumptions made by Doti and Adibi, for reasons other than Matt’s, and i too wondered if they ever read the actual MOUs or simply lifted their talking points from City presentations. On the other hand, I often wonder if those drafting the City presentations ever read the MOUs also.

    Whether you see the various talking points as a harmless proposal nobody will be held to, or mutually agreed upon stipulations mirroring a pre-nup’s
    clear intent to join for life, depends on which side of Arte’s lawyers you are sitting with, because Moreno’s comments to the media indicate what many of us feared, that he DOES see this as pretty close to a done deal. But no matter how you see the string of “benefits vs concessions” should we not all at least begin with the same information? If so, we should all begin by reading the MOUs and not blindly accept the spin from anyone’s interpretation, thrown into a power point slide and sold to the public as some sort of unbiased analysis. Heck I don’t even want anyone reading MY little blog rantings unless they have read the MOUs for themselves. I WANT readers to catch some nuance I missed, is that not the purpose for blogging, to engage many minds in the pursuit of resolving some conflict? Yet we continue to drag out the same misinformation, repackaging it to appeal to a different audience, instead of going back to the original documents.

    While it is happening for very different reasons, I agree with Cunningham on this one issue, the Op-Ed was a joke, and unworthy of those who put their names on it. I hope they are seriously ribbed for that nonsense in the teachers’ lounge for a long time to come.

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