Tustin “Cautiously Optimistic” About Talks With Angels

Anaheim Insider here. 

A new “OC Register” story reports that talks between the Angels and the City of Tustin are getting more serious:

On Monday, City Manager Jeff Parker met with Angels President John Carpino to discuss where a stadium could be built on the sprawling, shuttered base. While there are no formal negotiations, Parker said that Tustin residents would not be taxed to build a stadium.

The city is “cautiously optimistic,” Mayor Al Murray said.

Keep in mind that when news broke in February of the Angels approaching Tustin, the reaction of very skeptical: 

– “Tustin Officials Meet Moreno’s Overture With Skepticism” (Voice of OC)

– “But Tustin officials, wary of public dollars going toward a stadium, aren’t exactly preparing a welcome wagon for Moreno.” (Voice of OC)

– ‘Tait says it’s a preposterous idea. When “pigs fly,” Tait said. “It’s a crazy assumption.”’ (Voice of OC)

Apparently not so crazy. The upshot: talks between Tustin and the Angels are drawing closer together, while Anaheim and the Angels are drifting farther apart, meaning the chances of the Angels staying have diminished while the chances of them moving to Tustin have grown.

Now the city wants to conduct a study on how much it would cost Arte Moreno to build a new stadium somewhere else. Why? We know from a variety of experts it would be a lot of money: in the $500-700 million range (Tait’s guess of $1 billion is ludicrous). Does the city to pay for another study to tell them the same thing? What does this accomplish except to further delay reaching an agreement with the Angels, while Tustin officials are working toward striking a deal (Tustin must surely appreciate the assist). Also, why is Anaheim paying to find out how much it would cost to build a stadium somewhere else? That’s a study that a stadium-less city in talks with the Angels should commission.
Getting Some Things Straight

For months, Tait and other critics have been blasting the term of the negotiation MOU, painting the Angels as greedy and trying to rip-off Anaheim taxpayers.

The truth is the MOU framework was the city’s idea, dating back to City Manager Tom Wood. The city pitched it to the Angels, not the other way around. It is a good idea. You wouldn’t know it from the campaign he has been waging, but the mayor has long been aware that this is the city’s strategy for keeping the Angels.

So to blame and attack the Angels for the MOU terms is unfair and dishonest.

The “giveaway” claim is also a crock. If the deal is struck and Moreno develops the property, the revenues stay in the stadium district to pay for rehabilitating the city-owned stadium. Land that the city has failed tat developing will generate jobs, business activity and tax revenue for the city. Plus, the team stays here, which is what everyone, Angels supporters and critics alike, say they want.

The city is gaining, not giving away. What Tait and the critics want is for Moreno to provide all the capital and take on all the risk associated with developing the city’s property for it, and then give up 50% of the profits to a partner (the city) whose leader has been publicly giving him black eyes.

Tait said last week that he thinks the Angels are staying even if there isn’t a deal. If that’s true, the Angels would have to spend $150 million to fix the stadium anyway and there is no reason for the city to negotiate at all.

Bu the mayor does favor negotiating, which implicitly repudiates his assertion that the Angels are staying, deal or no deal.

15 comments

  1. I love this site. I really do.

    “The ‘giveaway’ claim is also a crock. If the deal is struck and Moreno develops the property, the revenues stay in the stadium district to pay for rehabilitating the city-owned stadium. ”

    Really? 100% of the revenues stay to fix the stadium? I’d love to see that commitment in writing from Kris Murray. All revenue derived from development of public land will go towards improving public assets. That sounds like a GREAT idea. Nice proposal.

    “Also, why is Anaheim paying to find out how much it would cost to build a stadium somewhere else?”

    It’s an attempt to quantify what Anaheim’s leverage actually is. Poor negotiating doesn’t convert leverage to terms. The cost to the taxpayer is what wasn’t converted . . . this is an attempt to make what it costs the city to keep the Angels more transparent to the public. FYI– Citi Field, $900m. Yankee Stadium, $1.5b. $1.0 for a major capital job in Southern CA in the current construction environment is not ludicrous. Cost to build the new Marlin’s park in Miami? $2.4b after interest payments. Lets understand what the risk actually is so we can strike the right balance on a return for the Anaheim taxpayer versus continuing to take a position based on fear, loss, and weakness. Information is a good thing.

    “What Tait and the critics want is for Moreno to provide all the capital and take on all the risk associated with developing the city’s property for it, and then give up 50% of the profits to a partner (the city) . . .”

    Again, that sounds like an OUTSTANDING idea. That’s a real deal with real benefits. Let’s get to the table to bring that back, which is a win-win for everyone.

    • Anaheim Insider

      Ryan, that has always been the purpose development portion of the MOU framework: to generate revenue Moreno could use to make the estimated $150-200M in stadium repairs; which it is why it’s accurate to say the revenues generated stay with the property.

      Furthermore, the cost of someone other than the City of Anaheim building a stadium somewhere other than Anaheim has no bearing on the costs/benefits to Anaheim of keeping the Angels. If it were Murray or Brandman proposing this study, you’d make the same criticism I did. Since it’s Tait’s idea, you think it’s a wonderful.

      “Again, that sounds like an OUTSTANDING idea.”

      Tait’s proposal would be a good deal for the city, but it is a one-sided idea, not a win-win. The Angels assume all the risk but split half the reward with the city, which assumes no risk. Tait wouldn’t take that deal if he owned the Angels.

      • Thanks for the measured reply, Insider. Nice to get some thought spun my way.

        There’s a substantial difference between the city’s intent in the MOU and what it actually committed to by signing two separate MOUs. There’s nothing in writing presented by the city that actually ties any revenue from development to any project at the stadium itself. I have to go by what’s in front of me, and what you’re claiming ain’t it. I, and other critics, have taken issue with what was actually signed and the commitment it represents.

        I think you’ll agree having a document that instead actually printed the intent to tie development revenue to repairs would be better than what we actually have in the two MoUs.

        Again, if Murray wants to go on record stating that 100% of any revenue derived from developing public property will go towards bettering public assets, that’s a very good thing. The mayor first proposed a 50/50 split, and now I see that Todd Ament is attempting to poach that idea as his own claiming some sort of split after the first $150m. I like the 50/50 better . . . but even Todd’s proposal is a shift from what we’ve seen in writing. I’d also REALLY like to see this $200m list of yours. Since the city paid for it, it ought to be a public doc, but it’s no where to be seen. Posting it up would be a nice task for you. I’d hazard to guess that there’s a solid chunk of that $150-200m that Moreno ought to already owe based on his existing use of the asset to date vs. the remaining term in the lease. He ought not get off the hook for what he definitively already owes. Anaheim already paid for that.

        RE: the replacement cost, for all I know, it IS Brandman or Murray’s idea. What this site and the Chamber at large continually dismiss is that Tait can’t get any action done without two additional votes. Did a study for the replacement cost of the city pass 5-0? 3-2? I don’t know, nor do I care, but the idea is a solid normal-course-of-business concept that should have been done a year ago in preparation for these negotiations. I guarantee you Moreno has already done it. In fact, he’s probably done two or three since acquiring the club.

        RE: risk. While I haven’t seen any detail on it, I don’t think you’re wrong in stating that Tait is asking Moreno to assume all the risk . . . what you’re omitting is that Tait is offering Moreno a SIGNIFICANT reduction in risk that he’d have to assume– namely $200m+ in property acquisition costs as well as pre-approval for the majority of the development. This means Moreno has less capital to initially invest to see a benefit and it’s likely that his benefit is going to come much, MUCH sooner than it would if that capital was placed in a brownfield investment elsewhere that didn’t have pre-approvals laid out. While it wouldn’t be appropriate to label the city’s contribution a “risk”, they ARE offering risk-reduction, which is just as valuable.

        So, the city can and should get a return on the substantial value they’re offering Moreno. A dollar isn’t it. The taxpayers are ponying up a cash equivalent. That Is a cost to the taxpayer, no matter how Murray spins it.

        Here’s what I have in front of me: Moreno is on the hook for investing $150m during over the next two decades based on terms of his current lease. Rather than pour that money into an old building with a limited return, he’d rather spend more money into developing the surrounding property, get a massive return, and use a portion of that massive return to substantiate both his investment in the team and in the surrounding property.

        GREAT.

        That doesn’t mean he should get to do it for free. That’s corporate welfare, plain and simple.

        The city made substantial concessions in the last lease agreement. Had they not made them, this $150m gap wouldn’t exist. Anaheim taxpayers shouldn’t be demanded to fork over free property to fix terms of a lease that Moreno knew he was getting into when he bought the team.

        They ought to get a return on their investment. That means either Moreno pays the market value of the land and/or the city gets a cut of revenue from development of public property. That cut ought to be informed from both the value of the property to be developed and the replacement value of the stadium– both components define the level of risk-reduction contributed by the city to Moreno’s planned development.

        Personally? I’d rather see him pay rent on both the stadium and the property. It’s more transparent and everyone understands what everyone gets. But, I can live with the alternative.

        Now if Moreno REALLY wants to follow up on Dan C’s suggestion to build a new stadium in Anaheim? I can see something different happening here as it ought to lock him into Anaheim (without an opt out) for what could for all realistic purposes be forever. By different, I mean a discount . . . I don’t mean a dollar.

        Hope that helps. And giving up the name is ridiculous. Have some pride in Anaheim, Arte. City of Champions, baby.

        • Dan Chmielewski

          City of Champions? One WS title and one Stanley Cup do not make Anaheim a “City of Champions.” People in LA, NY, Chicago, and Boston would laugh you off the blogsphere with that one.

          • . . . spoken like a true Yankee fan, Dan.

            Much love.

            • Dan Chmielewski

              27 titles to one. Boston has three in the last 10 years. How about St. Louis?

              BTW can you share the data you have that shows the Angels have one of the best stadium deals in Pro Baseball? Because everything I see says they don’t.

  2. Thank you A.I., the clarity here is appreciated.

    This is the city’s deal designed for the city’s benefit.

    Why Tait needs to throw a wrench in the works and seemingly take every step short of telling the Angels he wants them to leave is beyond me… unless that info about his kids having property that would benefit is true. That is the only way his actions make sense.

    We have seen him wage a battle against keeping the Angels and the game plan he is using is text book. He wants to muddy the water by creating false fears. Stall as long as possible and claim its so the public can get more information to resolve the issues he created in muddying the water. Then, after he has pushed everyone to the breaking point he will launch into a rant about how unreasonable everyone is for not seeing how he is trying to protect “The People” which is a complete lie. He will keep this shtick going until either the Angels wise up and leave or someone stands up to him… and thank goodness it seems Kris Murray has taken on that role!

    It is truly one of the most depressing things I have witnessed, how this one man has been allowed to bring pointless hardship upon the city.

  3. Lies! Says unemployed Dave Zenger, underemployed Greg Diamond, drunk Vern Nelson and soon-to-lose-her-house-when-CATER-loses-the-lawsuit Cynthia Ward. Because if Six people say so and make up scenarios and their own facts, they are never wrong.

  4. So…”Lies!” Let’s talk about the idea of people saying something and making up scenarios and their own facts.

    Like this constantly repeated but UNSUBSTANTIATED nonsense that the development of the land lease will go to fixing up the stadium. I call BS on you. In fact, I call it so completely that if you can show it to me in a legal document (like the MOUs approved on September 3) I will make a $100 donation to Kris Murray’s campaign.

    Have any of you read the MOUs?

    Exhibit A is the Stadium Lease MOU. In it, you will find an outline for “the framework of negotiations” as they put it, between the City of Anaheim and Angels Baseball LP or ABLP as they shorten it throughout the agreement.

    “Section 2. Stadium Maintenance and Repair: ABLP will have responsibility to maintain, repair and provide capital upgrades for the Baseball Stadium to a standard to be agree upon by the parties during negotiations on the extended lease, at ABLP’s expense.” It goes on to list other provisions but this is the connection to ABLP and future stadium repair. It is very important to note that PCI (Pacific Coast Investors) is NOT mentioned here. Page 4 of that Exhibit A concludes with Arturo Moreno signing on behalf of Angels Baseball LP

    Exhibit B is the Stadium District Lease MOU. Here we find the City of Anaheim negotiating with Pacific Coast Investors, LLC, a Delaware Limited Liability company, which is distinct and separate from Angels Baseball LP or even Arturo Moreno the individual.

    “2. Development Rights:” lays out the intent for the City of Anaheim to offer PCI (not ABLP or Arte Moreno) development rights for the land surrounding the Stadium.

    Page 3 of Exhibit B shows Arturo Moreno signing on behalf of PCI. Again, Angels Baseball is not listed in Exhibit B and PCI is not listed in Exhibit A. Nowhere in either document, separate contracts with separate corporate entities, does either party offer to shoulder the obligations of the other, they don’t even mention negotiating toward the connection between the land lease and the stadium funding each other in any way.

    So can you tell me where anyone makes the claim that the land lease being offered PCI is in any way connected to the obligation of Angels Baseball to cover the cost of the Stadium Maintenance? Show me where that appears others than a slide show presented by staff, because a slide show is not admissible proof in court, it does not obligate either party to a deal simply because staff says so during a Council meeting or community workshop, or because an elected official is out there promoting this premise in media interviews.

    So…”Lies”…it is important that you understand this issue with separate legal entities not being on the hook for the debts or obligations of other legal entities, because just as that separation ensures that PCI does not have to cover the costs of Angels Baseball, the family trust that owns my home (which you are so sweet to be concerned about) is not in any way, shape, or form legally obligated to cover the bills of CATER. But if it makes you feel all warm and fuzzy inside to think of an average citizen losing her home because she has done nothing more than ask her own government to follow the law while conducting the public’s business, well you knock yourself out with that. But the premise holds no more truth than the BS notion that the land lease financially supports the stadium repairs.

    • Matthew Cunningham

      The only reason the development rights would be leased to Pacific Coast (Arte Moreno) instead of ABLP (Moreno) is because if it were the latter, then MLB would also have to get a cut.

      Either way, development revenue is going over time to Moreno, who is also fronting the money to pay for stadium improvements. I’m surprised you don’t understand that.

      But why am I disagreeing with the superior intellect and knowledge of Anaheim’s seer, Cynthia Ward – who knows infallibly that the Angels will never leave no matter how badly the city craps on them?

      • The city isn’t crapping on them, Matt. The current lease is one of, if not the best in major league baseball.

  5. Proud Colonist

    Cynthia Ward bloviating is harder to watch than a Kings win over the Ducks. I will give $100 to Kris Murray for City Council every time Cynthia makes her point in less than 500 words. Even more if she makes a rational and sane point. Tait has her spinning like a top – so sad because the Colony thought she lost it before she jumped on his bandwagon!

  6. Dan Chmielewski

    Pigs must be flying. I thought the deal with Tustin was dead. Guess not.

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