Arte Moreno Didn’t Rule Out Negotiating WITH ANAHEIM, He Rejected a Proposed Lease That Made Him Look Like a THIEF!

Arte Moreno with Hello Kitty

I’m more optimistic than many of my companions in and around CATER about the implications of Arte Moreno’s decision to cut off lease negotiations with the City of Anaheim using the agreement passed in the MOUs.  Much sentiment is that he’s just playing politics, trying to hurt Mayor Tom Tait’s position in the weeks before a Mayoral election.  I have one big problem with this idea: the argument that this is Tait’s fault is preposterous.  Let me explain this, for the record, in the bold italic red and occasionally underlined capital letters that I like to save for these occasions.

THE OTHER FOUR MEMBERS OF THE CITY COUNCIL MAJORITY CAN DO WHATEVER THEY WANT TO RIGHT NOW.  THEY CAN INSTRUCT THE CITY’S NEGOTIATORS TO GIVE MORENO EVERYTHING HE WANTS AND TAIT CAN’T DO A THING TO BLOCK IT.  THEY CAN PUT A PROVISION INTO THE LEASE RENAMING THE STADIUM THE “ARTE MORENO IS A GOD AND TOM TAIT IS A DEMON STADIUM” AND TAIT STILL CAN’T STOP IT.  SO IF THE NEGOTIATIONS HAVE BEEN GOING NOWHERE, IT’S EITHER BECAUSE THE CITY’S NOT OFFERING ENOUGH VALUE (WHICH IS UNLIKELY) OR MORENO DOESN’T LIKE THE SORT OF THING THAT THEY’RE OFFERING.

[Whew!  I feel better now.]

OK, but what “sort of thing” would the City insist upon that Moreno night object to?  I think that, perhaps — oh, no, here it comes again…

THE CITY IS PROPOSING THAT MORENO LEASE THE CITY BLOCK-SIZED PARKING LOT — ON WHICH THEY CANNOT OTHERWISE GET THEIR HANDS — FROM THE CITY FOR A PITTANCE SO THAT HE CAN THEN LEASE TO OTHERS TO DEVELOP — AND IT’S EXTREMELY LIKELY THAT THE “OTHERS” TO WHOM THE CITY COUNCIL MAJORITY AND THE CITY STAFF WANT HIM TO LEASE THE PROPERTY FOR 66 TO 99 YEARS HAPPEN TO BE CRONIES OR CLIENTS OF THE MAIN PATRON OF THE CITY COUNCIL AND CITY STAFF — FORMER MAYOR CURT PRINGLE.

AND MORENO, TIRED OF BEING PORTRAYED AS THE GREEDY BAD GUY,  HAS FINALLY TOLD THEM TO GO TO HELL!

[I’m sorry.  Sometimes that just comes over me.  I really can’t promise that I won’t do that again.]

Look, this is really easy.  The City, NOT MORENO, appears to be the party that came up with this idea of Moreno personally leasing the grounds around the Stadium to until 2080 or 2113, somwhere around there, so that he could have a “revenue stream” that could pay for either the repairs to the Stadium for which the current lease puts Moreno on the hook or the renovations to the Stadium for which, arguably, he is NOT on the hook.  (Which are they, repairs or renovations?  Well, that may go to court someday.  Be very afraid.)  But the easy way to save Moreno from having to pay for past and future building, whatever it’s called, is just to give it to him.  Letting him have the city block around the Stadium doesn’t serve Moreno’s interests, but the interests in the people within the City that are pushing the proposal.

There’s one problem: it’s one thing for the City Council to, on its own, pass an resolution or ordinance giving a bunch of money to a campaign contributor, like Bill O’Donnell got for his GardenWalk Hotel.  Yes, there’s the Political Reform Act that could trip them up, but that’s not easy.  And, of the six entities that could conceivably send someone to jail for such corruption — that’s the federal government, the California Attorney General, the Fair Political Practices Committee, the Orange County District Attorney, the City Attorney (don’t laugh), and some private outside watchdog group that wanted to throw itself into the gears of the machine to bring it to a halt.  Generally, the first two are too busy with other things, the FPPC doesn’t handle issues of this size and shape, the local agencies won’t do anything about it, and the watchdog organizations — such as the Coalition of Anaheim Taxpayers for Economic Responsibility, or CATER, of which I am General Counsel — just don’t have the resources.  Most agencies seem content to treat Orange County like some very large version of a small corrupt rural Georgia town — although since OCCORD went after the GardenWalk Giveaway and then CATER came onto the scene, opinions seem to be changing.

However: that sort of garden variety (or GardenWalk variety) doling out tax loopholes and rebates and what have you to political cronies is not what they have in mind here.  Running an operation that gets a $300 million (OR MORE!) asset into the hands of the City’s kleptocracy through billionaire and soon hopefully world champion Arte Moreno’s organization — in other words, putting his interstate-commerce-regulated butt on the line when he supposedly gets to pick all by himself who gets to develop this extremely lucrative property — stands a chance of attracting far greater interest than if its a relative piker and sad sack like Curt Pringle just taking his middleman’s cut.

I don’t know why Moreno has been balking at a deal — but it could be because he looks across the bargaining table and sees people that he can in no way trust.  (That is, remember, everyone EXCEPT Tom Tait, whose agendizing authority the City Council took away in a Monday 8 a.m. special meeting when he tried to stand up to these machinations on Tuesday Sept. 24. 2013.)  Look at what he told the Los Angeles Times:

Moreno said the concept of the Angels developing the land in exchange for paying for stadium renovations had been introduced by the city, in talks with city negotiators over what he said were the past “four and a half years.”

Four-and-a-half years takes us to the last year of the Curt Pringle regime.  Mayor Tom Tait apparently has had no idea that these negotiations — with whom?  approved by whom? — were even taking place.  (Neither did the public.  I know this because, had CATER known about it, we would probably have been suing over it.)

I’m not saying that Moreno — a profit-driven businessman without many peers, by anyone’s standard — is some sort of, um, angel.  If Mayor Tait hadn’t stood up to this, and (I’m sorry if this sounds self-aggrandizing, but this is what I do think) if CATER hadn’t taken it to court to stop the deal on technical grounds, he might well have been comfortable with the arrangement.  (Or he might well not have.  We’re all ears here, if he’d like to weigh in.)  My sense from the Times story, though, is that he started to back away from the deal when it became clear that it would not face smooth sailing — but, instead, the choppy waters of intense (and legitimate) scrutiny.

Anaheim Mayor Tom Tait immediately objected, suggesting the team and city share the development profits. The city also commissioned an appraisal that valued the land at $225 million when leased to a developer.

When the city also directed the appraiser to value the land without a stadium – that is, with the Angels leaving and the ballpark demolished – and to determine how much it might cost Moreno to build a ballpark elsewhere, the Angels walked away from the negotiating table, claiming the city might not be committed to keeping the team even as all five City Council members declared they were.

Moreno is far too smart to believe that his opponent at the negotiating table should be completely committed to reaching a deal, no matter what — because then he could ask for anything he wanted.  His position, taken literally, is akin to his saying that he doesn’t mind betting on a game of darts with someone — but only if the person is blindfolded and the dartboard travels around the wall randomly.  Knowing the value of what you’re leasing out is pretty basic — even if the thought of it apparently makes Kris Murray hyperventilate.  (She gets all freaked out, of course, because if the public knows what’s going on it will be harder to take candy from the baby.)

I said this about a year ago at an Anaheim Councilm meeting and now I’ll say it again here:

ANY DEAL THAT INVOLVES GIVING AWAY RIGHTS TO PUBLIC PROPERTY HAS TO START WITH KNOWING THE VALUE OF WHAT’S BEING GIVEN AWAY.  Any deal for something of value will be a good deal at one price and a bad deal at another — and anyone who fails to ask “At what price?” of a given deal is either stupid, lazy, or standing to make some money on the deal.

For Lucille Kring, wanting to know how much the deal is worth means wanting to Angels to leave town.  Are any of our readers as stupid as Lucille Kring, so that I have to explain this to them?  Tait wants the Angels to stay in Anaheim.  BUT, he only wants that to happen if it’s a good deal for the City — because if it’s not a good deal for the City (and I’m sighing inwardly at having to complete this sentence), then it’s a bad deal for the City.  And a good leader wants to know which it is.

Now Kris Murray will want to say that this deal is going south — which it isn’t, yet — because of the actions of Tait and CATER.  No, it isn’t.

Garvey said the team is walking away from the particular deal, not necessarily from the city of Anaheim.

“It’s been over a year,” Moreno said. “We’ve gone backwards. We haven’t accomplished anything.”

CATER’s lawsuit has been essentially about two things.  (1) The City violated the California Public Records Act in not producing material asked for an relevant to the MOU approvals and (2) the City violated the Brown Act in not making available an important document that supposedly determined the value of the Angels to Anaheim to the public, while allowing City Council members to reach a consensus about it in what is called an illegal “serial meeting.”

What would happen if CATER won the case?  Basically, they would have to correct the deficiencies and do it all over again — which is exactly what they did when they lost the case to OCCORD over the GardenWalk Giveaway.

Q: HOW DOES HAVING TO PASS THE MOU DOCUMENTS A SECOND TIME DERAIL THE NEGOTIATIONS?

A: IT DOESN’T.

Any time three of the four members of the Council Majoriy had wanted to get the MOUs back into proper status, if our lawsuit was really holding up the negotiations, they could have commissioned a proper report — or could have just gone without one, if they wanted the humiliation of doing so — and properly distributed it to the public and then passed it at the next meeting.  ANY TIME THEY WANTED.

Why didn’t they do so?  I don’t really know the answer there either.  But, having jousted with the City for most of a year now, I think that I have a sense of why it might have been.

As much as they want the Angels to stay in Anaheim, and as much as they want the profits from the Stadium Lot into their favored patron’s private hands, there’s one thing that they want more: they do not want a watchdog group watching them in the years to come.

There too, alas for them — because the trend is moving in the opposite direction.  CATER is getting stronger and the kleptocrats are looking more and more vulnerable.

* * * * *

The above analysis means that I disagree, in some important respects, with the view of the estimable Anaheim businessman Wally Courtney — although in case he’s right I’m going to give him some space as well.  Here’s a letter that he has sent to various local media.

It’s interesting timing that the Angels announced Friday that they are ending current lease negotiations. Considering that the Angels wouldn’t negotiate for the past 6 months, it’s seems more a political decision than a business decision.

In September of 2013, the City of Anaheim and Arte Moreno, owner of the Angels, agreed to discuss the current stadium lease which expires in 2029. 3 Memorandums of Understanding (MOU’s) were signed by the parties. One was to extend the stadium lease term and one was to allow Moreno the rights to develop the parking lot. Both were non-binding and either party could terminate the negotiations with a 30 day notice. The third MOU was binding and allowed the Angels to delay their lease termination option from 2016 until 2019. This was “explained” to the city council as a necessary extension needed to allow the Angels and City of Anaheim enough time for these complicated lease negotiations and so that the Angels wouldn’t be “pressured” to make a rash decision because the 2016 termination option was approaching.

When the terms of the MOU’s were revealed, which included a 66 year lease for the 150 acres for $1 per year,  the Mayor of Anaheim and several Anaheim citizens and taxpayers objected. The “idea” of this lease was to allow Moreno to develop the parking lot to create income which he could use to improve the stadium. But, the objections were because the land is worth MUCH more than $1 per year AND the Angels current lease already requires the Angels to maintain and/or improve the stadium! Anaheim Mayor, Tom Tait, requested an appraisal of the property. We then all learned around March of 2014 that just the land is worth about $300 million. This amount does not even include the stadium!

Shortly thereafter, the Angels would no longer meet with or negotiate the lease with the City of Anaheim. Billionaire owner, Arte Moreno, thought that he could steal a $300 million property for $1 dollar, and 4 Anaheim City Council members almost let him! But Mayor Tait spoke up and here we are today…the Angels announced last Friday that they are terminating negotiations of the two non-binding MOU’s (even though they actually haven’t negotiated for the past six months!) Interesting timing, in that Mayor Tait is running to be re-elected in a few weeks and the Angels blame Tait for the non-agreement of the MOU’s.

And what about the 3 year extension of the lease termination option so there would be plenty of time to negotiate? The Angels gave up after 6 months because the Mayor and the knowledgeable citizens of Anaheim brought to light what a bad deal this was for Anaheim taxpayers! Shame on Billionaire Moreno…he got caught with his hand in the cookie jar!

And Shame on Anaheim Chamber of Commerce President, Todd Ament, and his ads and web pages disparaging the Mayor of Anaheim. Ament is supposed to be promoting all businesses in Anaheim, not spending thousands and thousands of dollars degrading the city and its mayor by publishing incorrect and misleading statements.

And shame on current council members Lucille Kring and Kris Murray, who are both running in the upcoming election. Kring said that the mayor “seems bent on driving the Angels out in order to demolish the stadium”. Of course the mayor doesn’t want the Angels to leave and he has stated so many, many times. He just wants to protect the taxpayers assets. $300,000,000 is a lot more than $1. Can you imagine the number of police officers, fire fighters, parks and street improvements that just the annual interest on $300 million could pay for?

And Murray says the Angels would improve the stadium “at no taxpayer expense”. Giving up $300 million for $1 is a HUGE taxpayer expense,especially since the current Angel lease already requires the Angels to improve the stadium at the Angels’ expense! If the terms in the MOU’s were so great, why didn’t the city council majority pass them months ago? Because the terms stunk and cheated the Anaheim taxpayers …that’s why! Tom Tait only has ONE VOTE. He can’t chase away or keep the Angels by himself!

The Angels have a fantastic stadium in Anaheim! They get over 3 million fan attendance every year ( only 7 of the 30 teams gets that) and Angel Stadium was recently ranked the #1 stadium by the “Bleacher Report”. Moreno doesn’t want to spend $1 Billion to build a new stadium in Tustin or Irvine or wherever. He already has a great stadium and location almost rent free! The City of Anaheim and the entire 5 member city council members don’t want the Angels to leave, and neither do most of the citizens of Orange County. So now that the MOU’s are gone, let’s put politics aside, sit down and work out a fair new lease agreement for the City of Anaheim, the Angels, and their fans, and then go out and win the World Series!  

WALLY COURTNEY, Anaheim Taxpayer

My main disagreement with Wally is that, while I once thought otherwise, I don’t think that Moreno himself had his hand stuck in the cookie jar.  I think that he was told that the City’s Negotiator had his hand in the cookie jar and was about to give him a cookie that he never requested — but that he would be perfectly happy to eat.  That may seem like a subtle distinction — but it’s the sort of distinction that may well keep Arte Moreno out of trouble when various figures from the City fall into the soup.  And if Arte Moreno ever does leave Anaheim, it’s more likely to be to escape the thrashing and splashing than because, in Tom Tait, he happened to run into a reasonable and responsible businessman.

Our Senior Government Boondoggle Correspondent David Zenger, characteristically pessimistic, has this to say about the deal:

Moreno (Arte) is actually being coached by the kleptos. The breaking off negotiations four weeks before the election is, as Ryan [Cantor] describes it, a cheap political hustle to try to make it look like Tait is somehow blocking this, knowing that most Anaheim voters are unaware that the mayor only gets one vote.

Moreno can’t get a stadium in Tustin by 2019 even if they wanted him and they won’t, meaning that he’s in Anaheim ’til 2029. Check out the Tustin MCAS Master Plan. Now where in the Hell is that stadium supposed to go?

I think that the “cheap political hustle” described by David and Ryan is just too stupid to work.  I hope I’m right — because if voters come to believe that just the Mayor stands in the way of an Angels deal, when what Moreno most needs right now is that sort of honorable partner, then this is going to escalate to a whole new level of ugly.

Meanwhile, one request to the media: please stop saying that Moreno has decided to leave Anaheim — as opposed to spiking one rotten deal that he didn’t write but that wrongfully cast him as the villain — until and unless that ever happens.  Thanks.


About Greg Diamond

Somewhat verbose attorney, semi-disabled and semi-retired, residing in northwest Brea. Occasionally ran for office against jerks who otherwise would have gonr unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.) His daughter is a professional campaign treasurer. He doesn't usually know whom she and her firm represent. Whether they do so never influences his endorsements or coverage. (He does have his own strong opinions.) But when he does check campaign finance forms, he is often happily surprised to learn that good candidates he respects often DO hire her firm. (Maybe bad ones are scared off by his relationship with her, but they needn't be.)