The city of Anaheim and the state of California have reached a settlement agreement and submitted a stipulated final judgment that will resolve their dispute over the city’s 2019 land sale of Angel Stadium to SRB Management LLC, a land-holding company owned by Angels Owner Arte Moreno.
Background
In October 2019, California Governor Gavin Newsom signed into law certain amendments to the California Surplus Land Act, which requires the city to first offer public land to developers that can build homes for low-income families. The amendments include requiring cities to take a formal action in a regular public meeting to declare land “surplus land,” and the city must support the declaration through written findings. Further, for a first violation, the amendments authorized the Department of Housing and Community Development (HCD) to issue a monetary penalty of thirty percent of the sales price. Notably, the amendments would not go into effect until January 1, 2020.
Importantly, the amendments carve out an exception to the application of the amendments. Section 54234 of the Land Surplus Act states, “if a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement . . . the provisions of this article as it existed on December 31, 2019, shall apply . . . .”
In December 2019, SRB agreed to purchase Angel Stadium and an additional 153 acres of Anaheim-owned land for $320 million. As a part of the purchase, the Angels agreed to remain in Anaheim until at least 2050.
In April 2021, the (HCD) sent a warning letter to the city warning the city that the city may have violated California’s Surplus Land Act. Specifically, the city failed to declare the land as either “surplus land” or “exempt surplus land” as required by the amendments. In December 2021, the HCD sent a Notice of Violation to the city. In turn, the city responded by denying that the Surplus Land Act applied to the sale of the property.
Specifically, the city has maintained the position that the exception applied to the city’s deal with the SRB. The city entered into an exclusive negotiating agreement with SRB prior to September 30, 2019. Thus, the city did not need to issue any declaration as to the property. When the city revealed its position, residents were left wondering why the negotiating agreement was never publicly discussed during council meetings.
Settlement
Now, it appears that the parties have resolved their dispute. As a part of the settlement, the city will put roughly $96 million (30% of full purchase price) into a trust fund to fund affordable housing in the city within five years. The city of Anaheim estimates it could build up to 1,000 units. Notably, the city did not admit to a violation of the Surplus Land Act.
Even though it will take years to see the fruits of this agreement, leadership throughout the Anaheim is touting the agreement as a victory. For now, Anaheim gets to keep their baseball team, and new housing is on the horizon.
Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
