ANAHEIM, Calif.—The city of Anaheim is on a countdown of 60 days to fix its plans to sell and develop Angel’s Stadium after being found in violation by the state’s housing agency.
A notice of violation of the Land Surplus Act was filed by the state Department of Housing and Community Development (HCD) on Dec. 8, nearly a week after the city received advanced notice of the filing.
The Surplus Land Act declares that public land put up for sale must be made available for affordable housing developers to place a bid before others.
Anaheim failed to open the land to other bidders and agreed to sell the stadium to SRB Management, a development group owned by current Angels baseball team owner Arte Moreno, according to HCD Deputy Director of Housing Policy Development Megan Kirkeby.
For $150 million, Anaheim City Council approved at a December 2019 meeting to move forward with the sale of the 150-acre land to SRB Management that would include the development of restaurants, shops, affordable housing units, and office space.
The violation comes after ongoing negotiations between Anaheim and HCD to address concerns over potential violations of the Surplus Land Act after receiving first notice in April 2021.
“We’ve been engaging in those conversations with them for some time now,” Kirkeby told The Epoch Times. “Basically, their offer has just shown us we are in two separate universes here. That things are too far apart for us to delay sending a notice of violation any longer.”
The notice of violation stated that Anaheim failed to do three things:
- declare the property as a land surplus or exempt surplus, meaning necessary for the city’s use;
- provide a notice of property availability to prioritize bidding for affordable housing developers; and
- provide HCD with a copy of the negotiations that did transpire and information on restrictions the property had.
Anaheim has 60 days to fix the violation by routes provided by the HCD.
According to Kirkeby, Anaheim can either declare land surplus and open the land for competitive bidding, or the city can set aside 80 percent or more of the land for affordable housing, with 40 percent of those units being available to lower-income households.
Anaheim and SRB Management proposed to HCD the possibility of increasing the number of affordable homes that will be made available at an earlier date if they are developed off-site across the city.
However, Kirkeby claimed building more affordable housing units off-site would not make the city in compliance with the Surplus Land Act for the 150-acre land sale.
Anaheim spokesman Mike Lyster said the city is disappointed with the ruling.
“We have always been aware of and complied with the Surplus Land Act as well as other parts of California law that cover the sale of government land,” Lyster told The Epoch Times. “We do not believe that our stadium site properly falls under the surplus land act.”
When the city received a letter sent out stating the review and rejection of the exemption claim in April 2021, Anaheim responded claiming they can provide evidence of being in compliance with the law and can prove there was an exclusive negotiating agreement with SRB Management prior to September 2019, the deadline to qualify for the previous version of the Land Surplus Act.
However, the city council rejected the motion to enter into an exclusive negotiating agreement at a council meeting on Jan. 15, 2019.
Anaheim officials were unable to provide evidence of negotiations with SRB Management to show they were exempt from the Land Surplus Act, Kirkeby said.
HCD further found that prior negotiations were impossible due to SRB Management not being officially formed until Nov. 20, 2019.
“SRB Management … didn’t exist before the cutoff, so I don’t think it’s possible for them to have an exclusive negotiating agreement with a company that didn’t exist at the time,” Kirkeby said.
The discussion to open the land for bidding has been off the table prior to the violation notice, as the city made it clear they didn’t think anyone, aside from the current bidder, SRB Management, would respond to purchasing the property, according to Kirkeby.
If Anaheim responds to the violation sent on Dec. 8 by following the Surplus Land Act, they could still work with SRB Management after opening the property for bidding for 60 days and engaging in good faith negotiations.
“The undoing of the deal or feeling like their deal is fully baked seems to be the main argument, but we’ve spent quite a bit of time going back and forth with them,” Kirkeby said.
While the HCD pushes Anaheim to open the land for fair bidding, the city of Anaheim doesn’t foresee discussing the property sale with anyone else, Lyster said.
The current lease is intended to play baseball and requires that 12,500 parking spots be dedicated solely for parking, Lyster said.
“We really don’t have the option of going to talk with someone else about developing it,” he said. “Because anybody else would say the land is tied up by a legally binding lease that says that land has to be parking. So we really have no choice but to discuss things with baseball.”
Lyster said if the sale of the 150 acres were open to public bidders, it couldn’t be owned until 2038, when the current lease to SRB Management is up.
With SRB Management being the current lessee of the property, the company has a quicker chance of turning developing the property after a purchase, according to Lyster.
“We remain committed to our plan for the stadium,” Lyster said.
If Anaheim ignores the violation notice and officially closes the deal with SRB Management, it will be subject to a 30 percent fine of the $150 million sales price, reaching up to 50 percent of the sales price if any further violations were found going forward, according to Kirkeby.
“They could choose to close the sale in violation,” she said. “They would incur a fine of 30 percent and they would leave themselves open to lawsuits.”