From the Orange Juice Blog:
BREAKING NEWS: Arte Moreno’s Demand for Keeping Angels in Anaheim Includes Curt Pringle’s First Born Child
OK, so that didn’t happen. But based on the current MoUs, one can’t but wonder — if Arte did make such a demand, would it be met?
The Anaheim City Council has worked diligently over the past few weeks knitting a rather large wool blanket. The latest attempt at hoodwinking comes in a new Facebook Page: Keep the Angels
This is a VERY interesting page. It makes gratuitous use of trademarked Angel logos and proprietary photos, is apparently well staffed at 8:30 on a Monday night (I made two rather benign replies, which were both removed inside of five minutes along with banning my user ID,) and the posts reveal insider access to negotiations surrounding the MOU.
Of course, this naturally begs the question, who’s running this page? The Angels? The council majority? The Chamber of Commerce? Think about that while reading this post. The page claims to be “grassroots”. Anyone else smell the horrible stench of astroturf? Someone got paid to do this. Someone should be getting a refund, too. I’ve seen plenty of bad turf jobs, but this is just sad.
A quick review on the current state of affairs: During the last city council meeting, the City of Anaheim approved two Memorandum of Understanding (MoUs) outlining the terms of future negotiations for Anaheim Stadium and separately for the surrounding land. While not all of the terms are explicitly immediately binding, the city did make a commitment to negotiate in good faith — which for the sake of brevity means that Anaheim can’t just say “no” to any of the individual terms. The Council will discuss the recently approved MoU Tuesday night; both sides have mobilized their propaganda machines to pack the council chambers with their supporters.
“Keep the Angels” apparently seeks to make use of general ignorance related to the MoUs. Just take a quick look at a few comments attached to posts:
“I thought they were just changing the name?”
“What the hell, Anaheim. What are you thinking?”
“PLEASE DON’T TAKE AWAY THE ANGELS.”
How does one capitalize on ignorance exactly? Well, it’s actually not that hard. The formula is about 4000 years old:
1) Yell “FIRE!, RUN FOR YOUR LIVES OR YOU WILL ALL DIE!”
2) Get 10 of your friends to get up, scream, and run away.
3) Relentlessly mock the intelligence of those who question if there actually is a fire or the need to run away.
Let’s take a closer look at this in action. Keep the Angels was very busy today.
Post #1: “Special interests and politicians want to drive our Angels from their home in Anaheim. Don’t let them! Like us and stay tuned for updates on how you can help Keep the Angels!”
I’m sorry, who are these “Special interests”? Dodger fans? No one is trying to drive the Angels away. No. One. No one has made a motion calling for the Angels to leave; no one has circulated a petition calling Arte Moreno a douche bag; no one is organizing a villainous scheme to deprive greater Orange County of professional baseball as part of their secret plan to take over the world.
Post #2: “In case you think it can’t happen, remember, Anaheim and Orange County used to have an NFL team too. Other cities will give the Angels hundreds of millions to move. Don’t let this happen!”
Really? Hundreds of millions? Do we have an offer from another city? If so, let’s see it, because I’m pretty sure that breaks about 50 rules in both MLB’s anti-trust waiver and the MLB operating agreement. We’re talking big time fines.
No one is going to give the Angels hundreds of millions to move. No. One. Why? The Angels have one of the best television contracts in the business. They can’t move outside of LA. If they stay within their designated marketing zone (southern California, north of San Diego), any stadium that they want to build has to go through the CEQA permitting process. For something that big, we’re looking at a decade for an approval. This statement by Keep the Angels is a lie. It’s the functional equivalent of yelling FIRE in a crowded theater. Step one complete.
Post #3: “Wow, already almost 900 likes. Thank you Angels fans! Let’s spread the word and help us keep our Angels! Please share this page with your friends and ask them to like it too. More news soon including how you can help Keep The Angels!”
And there we go. There are their 10 friends screaming and running out of the theater. Next up, mockery.
Post #4 “Here are some key facts on what is going on with the City of Anaheim and Angels Baseball. #1 – The Angels have the right to opt out of Angels Stadium in 2016, with one year notice. The negotiations underway would extend the lease to 2057. That’s 45 more years on Angels baseball in Anaheim!”
Well geez, who wouldn’t want to do that? <– Begin mockery.
But wait a minute . . .45 more years? That doesn’t sound right . . .
That’s because it isn’t right. The Angels have the unilateral right to abandon the contract, without penalty, in 2019, 2037, 2043, and 2051. So . . . that’s not 45 more years of Angel baseball in Anaheim. It’s 7. Since the existing contract expires in 2016, it’s really only 3.
3 vs. 45. Big difference.
Post #5: ”Fact #2 – Angels Stadium needs almost $150 million in upgrades. It is one of the oldest stadiums in Major League Baseball. In the current lease, it is not clear who is responsible for paying that $150 million, but if the Angels leave, then Anaheim is left with an empty stadium that needs $150 million in upgrades. We all know no team would come here unless the taxpayers paid the $150 million. In the last two decades, the average public subsidy for a baseball stadium has been 60%. Under the terms being negotiated with the City and the Angels, the Angels would agree to take on this $150 million. That is a good deal for taxpayers!”
Oh, no! If they leave . . . then what will we do with an empty stadium? I mean, jeez, all that vacant land in Southern California . . what could we possibly build? Oh, right . . . ANYTHING. That’s a separate discussion for another blog post.
For now, let’s look at this rotten egg from Facebook. Let’s assume they’re right. If Anaheim is to be consistent with other MLB hosts, Anaheim should pony up 60% of $150MM, or $90MM. Remember that number. $90MM. That’s what they claim is fair.
Anyway, they’ll leave if we don’t give them something! Give them something! Anything! THIS IS A GOOD DEAL! If you don’t approve, you’ll burn us all alive! Mock mock mock!
Post #6: “Fact #3 – the City has been trying to get someone to develop part of the parking lot around the stadium for almost 20 years. No one has been willing to do so, in part because the lease with the baseball team has required any developer to pay for a parking structure to replace any surface parking taken by the development. That would cost $100 million or more, maybe as much as $150 million. But if it is the Angels developing the entertainment and restaurant district around the Stadium, it starts to make sense. At stadiums around the country, there are really cool shopping and entertainment and dining districts right next to the Stadium. We can finally have that in Anaheim under the deal being negotiated. This would also bring thousands of jobs and tens or hundreds of millions of economic activity to Orange County, generating a lot of tax revenue to pay for city services.”
Whoa whoa whoa. No one wants to develop the land because of the terms and conditions in the existing lease, so we have to change the lease to giveaway the land to the Angels so they can develop it? What kind of crazy backwards world is this? If no one wants to develop the land, THEN CHANGE THE LEASE SO THEY CAN DEVELOP THE LAND.
Note the additional mockery. If Anaheim doesn’t agree, we aren’t as cool as other cities and we turn down thousands of mythical magical jobs that spontaneously appear as if from no where and millions, excuse me hundreds of millions of dollars, of economic activity (that’s A LOT of beer.) In other words, we’re stupid if we don’t agree.
Post #7: “So the basic framework which would keep the Angels in Anaheim seems pretty simple to us. Anaheim gets the Angels to extend their lease for almost 50 years, the Angels agree to pay the $150 million in needed upgrades to the Stadium instead of the taxpayers, and the Angels develop part of the parking lot into a really cool shopping/dining/entertainment district which brings jobs and vitality to the Stadium area. A lot of details remain to be worked out, but the start of the negotiations seem like a great deal.”
Again, if you don’t agree, you’re an idiot, because this is simple. Compelling.
The basic framework is exactly the opposite of how Keep the Angels describes. Anaheim gets the Angels for 3 years, not 50. The Angels absolutely do NOT agree to spend $150MM in needed upgrades. By leasing and not selling public land, the taxpayers give away their right to collect property tax on land. They also give up any sales tax generated from the site as well and fees generated from parking and whatever else. They agree to provide economic assistance to developers in exchange for mythical magical economic benefit.
What the MoU actually states is that the Angels will agree to maintain Angel Stadium “to a standard to be agreed upon during negotiations.” Well, that’s pretty darn open ended. Considering we’ve given away the cow, we can’t exactly dictate terms to Arte on what that standard should be. It could be $150MM, it could be $5MM. It certainly won’t be the $900MM some other bloggers are suggesting for a brand new stadium.
Let’s consider for a moment what Keep the Angels conceded earlier. If Anaheim is to mirror what other MLB hosts have done in recent years, they need to contribute roughly $90MM to renovate Anaheim stadium, with the team contributing $60MM. What exactly are we paying? Let’s take a look at the MoU.
Hmmm . . . wait a minute . . there’s nothing here that monetizes the giveaway! You mean to tell me the Anaheim City Council voted to enter into good faith negotiations without understanding the value of the terms to be negotiated, without providing a compelling and transparent value for consideration before the taxpayers? No. I don’t believe it. Surely, surely somewhere in Anaheim someone can tell me what Anaheim agreed to bargain for?
I know you’re as shocked as I am.
The problem with the 4000 year old model of yelling fire and mocking those who don’t listen to you is that the people who ask legitimate questions don’t die a horrible fiery death in the end. Eventually, the myth floats away with the hot air that blew it in and the truth comes out.
If this is really a fantastic deal for the taxpayer, the combined MoUs (which actually aren’t linked, but lets assume they are . . . which is a horrible benefit to grant, but I’m doing it anyway) ought to be worth less than $90MM. Any dollar above is a bad deal; any dollar below is a good deal.
What’s the value of the parking lot lease? Is it more or less than $90MM. Let’s take a look.
The city’s analysis calls out 50 specific acres for a development area formerly known as Sportstown. The actual proposed ground lease is substantially greater than 50 acres (of note, there’s nothing in the MoU that binds the Angels to not develop the entire parking lot, we’ll have to assume they won’t because they’re either prohibited elsewhere or that it’s just bad for business.) but we’ll stick with 50 for simplicity.
That’s 50 acres of prime commercial real estate for the grand total sum of $1 a year. How much is that worth? Well, working backwards, $90MM over the term of 66 years is $1.37MM per year. That’s about $2300 an acre per month or roughly $0.05/sq ft (FYI, going rates for vacant land in the area? $0.12 to 0.44 per square foot.)
Does anyone out there REALLY want to try to sell the idea that Anaheim taxpayers are getting a good deal? Other MLB hosts: 60% of costs. Anaheim: we give away free land for two generations.
Oh, but wait, it gets worse.
Not only do the Angels get the use of 50 acres, they get to develop it as they see fit. Here’s where it gets tricky. The city of Anaheim owns the land, which means it doesn’t pay property tax. This means the Angels get to develop the land, rent it to a tenant at market rates (making that value shoot way beyond the $0.05 they’re paying), all the while avoiding property tax payments that they rightfully owe to the county.
How much is that worth? I’m gonna throw a dart out there of a quarter billion dollars over the term of the lease. Anyone want to argue?
Oh, but wait again! It gets even worse!
The city is going to pay to develop the land for the Angels! We’re looking at “Gardenwalk Part Deux: Bend Over and Say Halo!” That’s right, the city agreed to provide economic assistance to develop the land. How much? Too be “negotiated” and “general fund neutral.” This means they uses fuzzy math, bad assumptions, and a ridiculous discount rate to extract as much as possible from the taxpayer before they get swatted. Kinda like a really big blood sucking mosquito that takes $150MM out of your wallet.
Here’s why the MoU doesn’t tell list how much it’s all worth. It’s too ridiculous to add up. Free land, free construction, no taxes . . . all for $1 a year over 66 years.
Average MLB host: $90 million. Anaheim: $850 million? $2 billion? Your guess is good as mine, but one thing is clear . . .
NOT A GOOD DEAL.
One more post from Keep the Angels:
Post #7: “On September 3, 2013, the Anaheim City Council voted 4-1 to begin negotiations with the Angels around this general framework. City Council Members Gale Eastman, Jordan Brandman, Lucille Kring, and Kris Murray voted for this framework. Mayor Tom Tait voted against it and has been trying to stir up opposition to the Angels.”
There is no fire and you aren’t stupid. The Angels aren’t going anywhere. If they do, well, the sky won’t fall.
I’m sure there’s no shortage of developers chomping at the bit to get to what’s essentially greenfield space with direct access to rail and three major freeways, a publicly owned power and water utility, 20 minutes from an airport, and with potentially direct tram access to both Disneyland and the California High Speed Rail project.
But, I guess you can always believe the city’s analysis that the surrounding land value just evaporates without the Angels. Yeah, on second that, no one would want a piece of land like that. Definitely not Disney.
Tell Eastman, Brandman, Kring, and Murray that their manufactured crisis is a joke and Anaheim wants its billion bucks back.