Jose Moreno’s Deceptive Angel Stadium Math

Councilman Jose F. Moreno

The narrative being broadcast by Councilman Jose F. Moreno and his political and media allies – in their attempt to derail the Angels agreement – is that the stadium site is being sold for less than it is worth. However, upon closer examination, Moreno’s numbers don’t add up.

Last week, the Anaheim City Council voted 5-2 to approve agreements keeping the Angels in Anaheim until at least 2050 and selling the stadium property to Arte Moreno-owned SRB Management for $320 million. That is the fair market value of the site with the Angels staying and keeping the current requirement for 12,500 parking spaces, according to the city-commissioned appraisal.

Councilman Moreno employs legerdemain to come up with a higher number.

First, he picks a different valuation from a different part of the appraisal, based on a parking requirement of only 6,250 parking spaces. Lowering the parking requirement increases land value – in this case a range of $275 million to $470 million. Moreno then values the stadium itself at $70 million, notwithstanding it is 54-years old and every option regarding the structure – from renovation to demolition to replacement – entails tens of millions of dollars in costs.

Moreno’s resorts to more sleight-of-hand by claiming the “marketing value” of having “Anaheim” in the team name is worth $34 million annually. He wants to multiply that by 30 – the term of the Angels commitment to stay – and tack $1 billion onto the sale price for a final price of $1.6 billion.

This is dishonest for a number of reasons.  For one, that matter has already been expensively litigated more than a dozen years ago. Arte Moreno won, the city lost. The Angels owner Moreno has made it clear the team name is non-negotiable, and Councilman Moreno has outlined no negotiating framework to change that.

Secondly, Councilman Moreno’s “marketing value” of $34 million annually is a mirage. He cribbed that figure from claims the city made while litigating the name change. At the time, the city claimed the value of team name being Anaheim Angels was equivalent to spending $34 million annually on marketing the city.

And that’s the point: that number is only real if the city is willing to spend $34 million annually – and $1 billion over the next 30 years – on paid marketing of the city. Jose Moreno has no intention of spending that. His $1 billion in marketing value is sheer gimmickry.

He also bases his valuation in part on the mistaken belief the stadium building itself is worth as much as $100 million. On what planet is a 54-year old building that needs tens of millions in repairs and renovations worth $100 million? The stadium is a drag on the value of the property. Arte Moreno will have to spend tens of millions of dollars of his own money to fix it, and even more to replace it.  If the city followed Moreno’s wishes by bidding the Angels good-bye and selling the stadium site for a non-stadium use, the buy would have to demolish Angel Stadium – and that would costs tens of millions of dollars to do.

Think of it this way: if the city put the stadium building on the market and asked for $100 million, would anyone buy it? Of course not.

Moreno isn’t alone in resorting to deceptive math.

Councilman Jose Moreno’s economic adviser.

Wally Courtney, the Moreno-Tait faction’s go-to real estate “expert” – has been claiming the stadium site is worth $1 billion. On what basis? He doesn’t say.

Another Courtney criticism is the agreement doesn’t contain a provision whereby, if down the road SRB Management sells the stadium property, then the city has the right to buy it back at the original sale price. Moreno and Barnes have raised this idea, as well.

Imagine you’re buying a house, and the sellers – after accepting your offer – then says, “If you decide in the future to put this house on the market, I want the right to buy it back for the price at which I sold it to you.”  What sucker would take that deal? Yet, that is what Courtney, Moreno and Barnes are promoting.

Another Jose Moreno supporter, blogger Vern Nelson, is also promoting the $1 billion claim. But at least he admits that only if Major League Baseball leaves Anaheim, writing this week:

“Unencumbered by stadium, if we really wanted to make money and didn’t care about keeping a baseball team, that IS what it’d be worth. Granted, many or most Anaheimers wanna keep the Angels, so I’d rather use the 600-650 million figure.”

Nelson doesn’t substantiate either number, but tacitly admits his side downplays that getting a selling price higher than $320 million would require getting rid of the Angels.

Moreno Is Deceiving The Public About The Angels Deal

Yesterday, Councilman Moreno posted a video on Facebook attacking the Angels deal.  The video begins with this falsehood:

“Why is our city in this economic crisis lending billionaire Arte Moreno $100 million?”

 

The answer is: the city isn’t lending Arte Moreno anything.

The real question is why Councilman Moreno is resorting to flat out lying to the public?

Jose Moreno knows what a loan is: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.

He also knows the city is not lending any money to Arte Moreno. That would require the city to write a check to SRB Management.

In fact, it is SRB Management that is and will be writing checks to the city – plus paying interest to the city on the balance of the cash portion of the purchase price.

Councilman Moreno’s “$100 million loan” claim is a lie – pure and simple.

Moreno goes on to ignore the appraisal for which he voted by repeating his claim the stadium site is worth $650 million, and then says the city is giving SRB Management a $500 discount.

Again, this is dishonest math derived from a half-baked valuation that in turn doesn’t hold up under even cursory examination.

Where Are All The Offers To Buy The Stadium Site For $1 Billion?

If Jose Moreno, Tom Tait, Wally Courtney and the rest of the “giveaway” crowd are correct and the stadium site was worth $650 million to $1 billion – then where are the offers?

Tom Tait was mayor for eight years. Did he receive any offers to buy the stadium site?

Tait and Moreno controlled the city council during 2017 and 2018. Why didn’t they actively solicit buyers? For that matter, why did they make no progress on striking an agreement with the Angels? What were they doing during those two years in which they controlled Anaheim city government? If Tait and Moreno are so certain the site can be sold for $1 billion, why didn’t they do it?

The answer is because they couldn’t – because the valuations they toss out are phony (and because their negotiation strategy was foolish and counter-productive).

The bottom line is Councilman Moreno’s behavior, his rhetoric, his “data” and his claims are entirely political. He is throwing crap against the wall – or more accurately, at Councilman Steve Faessel – and hoping something sticks.

13 comments

  1. I will delete my subscription to this ridiculous one sided vendor of totally worthless false news.

    • Anaheim Independent has a perspective – and we have always been up front about that. We are also factual – and this story is entirely factual.

      For fake news, we would direct you to Councilman Jose F. Moreno’s social media, and his disinformation campaign against the Angels agreement.

  2. Cunningham accuses others of being Deceptive, while he is Deceptive!
    He states that there is no value to the stadium. Of course there is! The Rams just spent $5Billion to build one. Angel Stadium attracts over 3 million fans every year ( so, it can’t be that bad!). It must be worth something. Any needed repairs are the Angels responsibility, as per Paragraph 10 of the Lease! He complains about valuations of $1Billion, but with no basis. He knows the basis ( I already told him). He gives a inaccurate example of a right to buy back the property. The concept I mentioned would be only to keep SRB from just doing a flip on the property after getting the entitlements. If SRB truly wants to develop the stadium property, long term, more power to them. But if they simply want to “steal it” for $150Mil, get entitlements, then flip it for 100’s of Millions $$ more, then the taxpayers are missing out on what should have been the “real market value”. He apparently doesn’t understand the real estate concept of a “seller carry back”, or “seller financed property”. The city is absolutely “loaning” SRB $100Mil to buy the property. SRB could borrow that money from a bank, but they are borrowing it from the city and making payments to pay it back! It’s a loan. Where are the other offers, Cunningham asks. A few years ago, the city proposed to sell 1/3 of the property and they received several offers, the highest being $200Mil for 53 acres! ( now they want to sell all 150 acres for less than that!) While Tait was the mayor, the Angels opted out of their lease and Tait immediately called for an appraisal in order to “put the property on the market for sale”. Shortly thereafter, Mayor Sidhu led the charge to re-instate the Angels lease, THEN ordered the appraisal ( at the encumbered/diminished value). So Cunningham is the Deceptive one. Reality is that the Anaheim taxpayers are not getting “fair market value” for the property, and Cunningham knows it!

    • – How much is a 54-year old stadium that is in need of millions and millions of repairs worth?

      “He knows the basis ( I already told him).” You have never told me. We have never, to my knowledge, spoken. Please explain the basis for your $1 billion valuation?

      “A few years ago, the city proposed to sell 1/3 of the property…” That was 13 years ago, at the height of the real estate market just before the bubble burst – and when the city was trying to lure an NFL team and stadium to the site. And it didn’t work out, did it?

      – It’s not a loan. The city isn’t loaning money to SRB. You and Councilman Moreno are twisting the meaning of the word “loan” in order to cloud the issue and confuse the public.

      – Tom Tait was mayor for 8 years. 8. Years. What did he accomplish vis-a-vis the Angels other than totally, needlessly alienating them – thereby unnecessarily making negotiations difficult-to-impossible?

      Tom Tait and Jose Moreno demanded the appraisal, they voted for the appraisal – Moreno demanded it be made public throughout the year – and now they are tossing it aside in favor of their own mysteriously-arrived at appraisals.

      • – Value of an “old” stadium…Gee, why don’t we ask the Dodgers, or the Cubs, or the Red Sox. They all have older stadiums that they cherish!

        – You and I were commenting on Faessel’s Facebook page where I explained the $Billion valuation.

        – 13 years ago was the height of the real estate market?? Now I know you don’t know what you are talking about. Real Estate Values are much higher today!

        – It absolutely is a loan. SRB is closing escrow then making payments, with interest, to another party. A bank, an individual, the seller…doesn’t matter. It’s a LOAN!

        – Most of Tait’s 8 yrs the Angels and City were obligated to a lease. There was not much to negotiate. Especially when he was a minority vote.

        • i think Matt’s point was the Archstone offer in 2007 was made on the cusp of a real estate speculation bubble and was overvalued. Not a good point of reference.

          I get where your coming from when you talk about a loan, and I don’t you intend to be misleading. But Jose Moreno does. He knows the average person thinks of a loan as actual money being given, to be repaid with interest. That is what he wants people to think is happening here. That is whey he phrases it that way.

          And the city is getting paid interest by SRB. So what’s your complaint?

          Last point. The Angels and the city were obligated to a lease while Sidhu led the negotiations. Except he was able to strike a bargain in less than a year.

          • It’s nice of you to explain what Matt was thinking ( why can’t he do that?) If you don’t like the Archstone price as a reference…how about the $4.4Million/acre that the George apartments builder paid for land right next door to the stadium parking lot, or the $5Million/acre that a developer just paid for land in Anaheim at Anaheim Blvd/Cerritos?
            I’m not familiar how Jose is phrasing the “loan” language, but it’s definitely a loan. My issue with it is that the city is not only selling the property below “real market value”, but they have to wait 5 years to get paid in full by a Billionaire. He should be able to pay in full at close of escrow ( just like probably 99% of all real estate transactions.)
            The city was obligated to the Angels lease ONLY BECAUSE Sidhu helped the Angels re-encumber the property after they opted out of the lease. TERRIBLE move by him!! ( and his council cronies)

            • Are you saying buying the George property is exactly the same as buying the Stadium site?

              The Angels are paying for more per acre than the Samuelis for the Honda Center land. I don’t remember you criticizing that deal? Is that because it was Tom Tait, and you can’t bring yourself to criticize anything he does?

    • Why does anyone listen to Wally?

      The only way you get the highest appraised price for the stadium property is if the Angels leave and it is sold off purely for development.

      So what is a baseball stadium worth to a buyer who doesn’t want or need a stadium? It’s not just worthless, it is a negative cost because demolition will be hugely expensive.

      The problem with Wally and Moreno is they want the Angels to buy the stadium site for the non-stadium price (plus a few hundred million added on for no apparent reason).

      • They listen to me because I know what I am talking about!

        Did the city check with the Samuelis or the Chargers or a pro soccer team or an investor who might want to buy the property to use the stadium or invest/develop some of it and lease the stadium to the Angels? No they did not. The appraiser defines fair market value as when a property is marketed for a reasonable time with exposure to the open market. This did not happen, so as per definition this transaction is NOT MARKET VALUE.

        • Did the city check with anyone else when they sold all the parking lots around the honda center to samueli for 600k/acre? So the city wants to be in the landlord business with the arena (and sell all the surrounding land) but not in the stadium business?

        • Wally! Your good buddy Jose Moreno talked last night about his strong support for Prop. 15. Moreno is shocked his colleagues don’t support hitting commercial property owners with a massive tax hike, and climbing property tax bills into the future.

          Waiting for you to condemn his vote and educate him on his ignorance?

          You up for that, buddy? Will you say something here or on his Facebook page? Or will you continue being a “useful idiot” enabler for that socialist?

          • Anaheim 411 …whoever you may be. I commented on Cunningham’s article about the stadium. Now you want to make personal insults and discuss the Honda Center and Prop 15.
            I’m not going to argue with an anonymous blogger/instigator.

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