The narrative being broadcast by Councilman Jose F. Moreno and his political and media allies – in their attempt to derail the Angels agreement – is that the stadium site is being sold for less than it is worth. However, upon closer examination, Moreno’s numbers don’t add up.
Last week, the Anaheim City Council voted 5-2 to approve agreements keeping the Angels in Anaheim until at least 2050 and selling the stadium property to Arte Moreno-owned SRB Management for $320 million. That is the fair market value of the site with the Angels staying and keeping the current requirement for 12,500 parking spaces, according to the city-commissioned appraisal.
Councilman Moreno employs legerdemain to come up with a higher number.
First, he picks a different valuation from a different part of the appraisal, based on a parking requirement of only 6,250 parking spaces. Lowering the parking requirement increases land value – in this case a range of $275 million to $470 million. Moreno then values the stadium itself at $70 million, notwithstanding it is 54-years old and every option regarding the structure – from renovation to demolition to replacement – entails tens of millions of dollars in costs.
Moreno’s resorts to more sleight-of-hand by claiming the “marketing value” of having “Anaheim” in the team name is worth $34 million annually. He wants to multiply that by 30 – the term of the Angels commitment to stay – and tack $1 billion onto the sale price for a final price of $1.6 billion.
This is dishonest for a number of reasons. For one, that matter has already been expensively litigated more than a dozen years ago. Arte Moreno won, the city lost. The Angels owner Moreno has made it clear the team name is non-negotiable, and Councilman Moreno has outlined no negotiating framework to change that.
Secondly, Councilman Moreno’s “marketing value” of $34 million annually is a mirage. He cribbed that figure from claims the city made while litigating the name change. At the time, the city claimed the value of team name being Anaheim Angels was equivalent to spending $34 million annually on marketing the city.
And that’s the point: that number is only real if the city is willing to spend $34 million annually – and $1 billion over the next 30 years – on paid marketing of the city. Jose Moreno has no intention of spending that. His $1 billion in marketing value is sheer gimmickry.
He also bases his valuation in part on the mistaken belief the stadium building itself is worth as much as $100 million. On what planet is a 54-year old building that needs tens of millions in repairs and renovations worth $100 million? The stadium is a drag on the value of the property. Arte Moreno will have to spend tens of millions of dollars of his own money to fix it, and even more to replace it. If the city followed Moreno’s wishes by bidding the Angels good-bye and selling the stadium site for a non-stadium use, the buy would have to demolish Angel Stadium – and that would costs tens of millions of dollars to do.
Think of it this way: if the city put the stadium building on the market and asked for $100 million, would anyone buy it? Of course not.
Moreno isn’t alone in resorting to deceptive math.
Wally Courtney, the Moreno-Tait faction’s go-to real estate “expert” – has been claiming the stadium site is worth $1 billion. On what basis? He doesn’t say.
Another Courtney criticism is the agreement doesn’t contain a provision whereby, if down the road SRB Management sells the stadium property, then the city has the right to buy it back at the original sale price. Moreno and Barnes have raised this idea, as well.
Imagine you’re buying a house, and the sellers – after accepting your offer – then says, “If you decide in the future to put this house on the market, I want the right to buy it back for the price at which I sold it to you.” What sucker would take that deal? Yet, that is what Courtney, Moreno and Barnes are promoting.
Another Jose Moreno supporter, blogger Vern Nelson, is also promoting the $1 billion claim. But at least he admits that only if Major League Baseball leaves Anaheim, writing this week:
“Unencumbered by stadium, if we really wanted to make money and didn’t care about keeping a baseball team, that IS what it’d be worth. Granted, many or most Anaheimers wanna keep the Angels, so I’d rather use the 600-650 million figure.”
Nelson doesn’t substantiate either number, but tacitly admits his side downplays that getting a selling price higher than $320 million would require getting rid of the Angels.
Moreno Is Deceiving The Public About The Angels Deal
Yesterday, Councilman Moreno posted a video on Facebook attacking the Angels deal. The video begins with this falsehood:
“Why is our city in this economic crisis lending billionaire Arte Moreno $100 million?”
The answer is: the city isn’t lending Arte Moreno anything.
The real question is why Councilman Moreno is resorting to flat out lying to the public?
Jose Moreno knows what a loan is: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
He also knows the city is not lending any money to Arte Moreno. That would require the city to write a check to SRB Management.
In fact, it is SRB Management that is and will be writing checks to the city – plus paying interest to the city on the balance of the cash portion of the purchase price.
Councilman Moreno’s “$100 million loan” claim is a lie – pure and simple.
Again, this is dishonest math derived from a half-baked valuation that in turn doesn’t hold up under even cursory examination.
Where Are All The Offers To Buy The Stadium Site For $1 Billion?
If Jose Moreno, Tom Tait, Wally Courtney and the rest of the “giveaway” crowd are correct and the stadium site was worth $650 million to $1 billion – then where are the offers?
Tom Tait was mayor for eight years. Did he receive any offers to buy the stadium site?
Tait and Moreno controlled the city council during 2017 and 2018. Why didn’t they actively solicit buyers? For that matter, why did they make no progress on striking an agreement with the Angels? What were they doing during those two years in which they controlled Anaheim city government? If Tait and Moreno are so certain the site can be sold for $1 billion, why didn’t they do it?
The answer is because they couldn’t – because the valuations they toss out are phony (and because their negotiation strategy was foolish and counter-productive).
The bottom line is Councilman Moreno’s behavior, his rhetoric, his “data” and his claims are entirely political. He is throwing crap against the wall – or more accurately, at Councilman Steve Faessel – and hoping something sticks.