State auditors to probe Angel Stadium agreements

The collapsed sale of the Angel Stadium site is set to come under fresh scrutiny through an investigation by the state auditor into the controversial deal and whether MLB team the Los Angeles Angels has complied with the lease contract.

Following a request by Senator Thomas J. Umberg and Assemblymember Avelino Valencia, the latter of whom formerly served on Anaheim City Council, the Joint Legislative Audit Committee has approved an emergency audit of the City of Anaheim and its leases and/or sale negotiations with the Angels regarding Angel Stadium.

Umberg said: “The people of Anaheim deserve oversight and transparency on the topic of the Anaheim Stadium. This taxpayer-owned stadium is estimated to be worth $500m (£387.9m/€454.9m). It was hours away from being sold for $320m – nearly two hundred million dollars below market value.

“Previous closed-door and back room deals pertaining to this issue have already led to former mayor (Harry) Sidhu facing prison time – with a ripple effect of resignations and allegations of fraud and collusion among city agencies and community organisations alike.

“The best way to move forward is to understand what decisions were made by former Anaheim officials and their impact on the future of Anaheim Stadium and its disposition. Our audit request will ensure we examine any actions in the past and how they can inform and bind future decision making. It’s the least we can do to reassure the residents of Anaheim that we are on their team.”

In July, the legislators submitted a joint letter requesting an emergency audit of the City of Anaheim to examine its lease agreement with the Angels and to address concerns regarding the compliance, revenues, and maintenance of the stadium.

The State Auditor has not yet issued a timeline for completion of the review, although work can occur anytime over the next 12 months. Valencia added: “The City of Anaheim and its residents deserve a world-class stadium and team. To achieve this, we must look in the rearview mirror and understand what has worked and what hasn’t.”

The latest development in the saga comes just weeks after the City reached a settlement with the Angels over its cancellation of the Angel Stadium deal.

The claim by the team’s ownership sought $5m plus legal fees and was settled for a credit of $2.75m, with no cash to be paid by the city. The settlement will also see Anaheim build a fire station on the stadium site with the support of the Angels ownership.

Angel Stadium is owned by the City of Anaheim and operated by the Angels. In 2020, Anaheim approved a $320m sale of the 151-acre site to SRB Management, the company of Angels owner Arte Moreno.

The deal was put on hold in May 2022 amid a public corruption investigation, and later that month Sidhu resigned from his role as Mayor of Anaheim. Court documents at the time accused Sidhu of soliciting a donation of approximately $1m to his re-election campaign as the City of Anaheim discussed the sale of the stadium and surrounding land to SRB Management.

It transpired that the original $320m comprised only $150m in cash, while plans for affordable housing were cut considerably. The Angels later agreed to a request from Anaheim City Council to cancel the deal to sell Angel Stadium.

The sale would have ended 50-plus years of city stadium ownership and put any future maintenance, renovation or stadium construction costs solely in the hands of SRB Management. In August last year, Sidhu pleaded guilty to federal felony charges connected to the sale of the stadium. He is scheduled to be sentenced in December.

The initial sale agreement included a provision for SRB to seek $5m in transaction costs plus legal fees if the city did not go through with the sale. SRB’s claim ended with the settlement announced last month.

Responding to the latest news, Angels spokeswoman Marie Garvey told the Los Angeles Times: “Angels Baseball is in full compliance with the stadium lease, and under current ownership, we have spent approximately seven times more than what the lease requires in capital improvements and maintenance.”

Mike Lyster, spokesman for the City, said Anaheim regularly audits the lease as a whole as well as the payments and capital spending required of the Angels. The Angels’ lease currently extends through 2029, with the team holding options to remain at Angel Stadium through 2038.

“Our last full audit found general compliance with the terms of the lease,” Lyster said. “This lease has been one of the most thoroughly reviewed and talked about in our city. But we welcome any additional review and look forward to working with our state partners.”