This post was originally published on this site
My take on the Angeles Stadium deal: would you sell your home to a buyer for 1/2 of its value with 50% paid upfront and the other 50% paid at some future date at the sole discretion of the buyer, if they so choose to honor such payment? I think not.
However, with the information that is coming out about this transaction and sale of the stadium and land, this is pretty much the scenario here.
Anaheim, which owns the Stadium and the land, would end up selling land worth roughly $7 million dollars an acre for $1 million an acre, or $150 million with an additional $150 million paid in concessions later. That date would be at the discretion of the buyer if they want to pay at all. The future $150 million would be paid in the form of renovations and development of the property, but the valuation of the $150 million would be at the hands of the buyer, likely padded in their favor with no audit set up to review the true cost or benefit of the improvement.
The best-case scenario is that the truth comes out and, if the deal was not an arm’s length transaction as the buyer claims, then the negotiations should start all over. A fair market value could then be established as the sale price, transparency of the project should take place and the City of Anaheim should include independent audits to make sure any concessions are followed through in lieu of any future payments.
I predict the value will be closer to $600 million with $450 million paid to the city and $150 million paid in concessions that would come in the form of offsets from improvements, employment & sales tax.
All with the restriction that the owner keeps the Angeles in Anaheim for a fixed period. Something must be put in place to keep the Angeles and the stadium in place, or the buyer could merely decide to move the team and sell the land at fair market value to another buyer for development and pocket a few hundred million.
The estimated land value of the 150 acres is $1 billion dollars. However, if you consider the cost to demolish the stadium for raw land value, that will affect the value. Then there is the value of the stadium and the value that the Angels bring to the City of Anaheim in revenue (surprisingly not much).
What is that value? The value of the revenue has been reported as being so low it is not a real factor. The factor is the entertainment and employment benefits to the community. Even that might be relatively low.
The best use of the land to the community would be close to what the current proposal is – a mixed use, entertainment, and housing development. The new tax base would then be at fair market value along with added improvements that would be assessed at market value and taxed accordingly.
Since this post, more and more details have been revealed about this botched transaction, and the outcome could possibly be even worse than imagined. As the next Assessor, I would be limited to merely applying appraisal values and assessments to the property and any improvements.
As a businessperson and Real Estate Broker, I can tell you the contract seems to have had very little remedies for future breaches on the buyer’s end. Putting the buyer in complete control without any oversight by Anaheim. Furthermore, the 13-acre Elephant Parking Lot offered the Angels in Long Beach doesn’t seem to be a viable option.
As a resident of Orange County, it would be nice to see the Angel Stadium remain, but the citizens of Anaheim and Orange County need to be compensated fairly and know the best possible use and value are being applied.
We all want to see the Angels remain in Anaheim, but at what cost? If the Angels owners are unable to pay for the stadium perhaps Anaheim should find other willing and able buyers.
