ANAHEIM (CBSLA) – The California State Department of Housing and Community Development issued a notice of violation to the city of Anaheim on Wednesday, stating that the plan to sell Angel Stadium of Anaheim is a violation of the Surplus Land Act.

ANAHEIM, CA – JULY 17: Front entrance of Angel Stadium of Anaheim before the game between the Anaheim Angeles and the Boston Red Sox on July 17, 2004 in Anaheim, California. The Angeles won 8-3. (Photo by Doug Benc/Getty Images)

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This is not the first correspondence between the CSDHC and Anaheim, who’s attorneys received a letter that warned of the violations to the Surplus Land Act and their guidelines earlier in December. Earliest record indicates that the investigation has been ongoing since April of 2020, according to the Los Angeles Times.

In response to this letter, the city proposed adding more affordable housing in other areas of the city within the next 10 years, which CSDHC still deemed was not enough to avoid the violation, especially since the production would be off-site and essentially unrelated to the stadium property deal.

Now, Anaheim has 60 days to correct the violation, or the sale that was initiated in December 2019 would be deemed illegal.

The Surplus Land Act requires that public land should be made available for sale only after being offered to affordable housing developers.

City officials deny that the land qualifies as surplus, especially since the intended purpose is for the land to be leased for a baseball stadium. They noted that since the land is under lease for at least the greater part of the next two decades, the land could be unappealing to developers.

They also indicated that the initial sale plans began earlier than September 2019, the date that the updated law began requiring public land be made available to affordable housing developers. CSDHC rejected this statement as cause to withdraw the warning.

“We determined early on and continue to hold that the stadium site is unique and does not fit the definition of surplus land,” said spokesman for Anaheim Mark Lyster. “It is under lease for Major League Baseball for the next 17 years. … It does not fit the definition of surplus, unneeded government land.”

The original deal, negotiated in 2019 and sold to SRB Management, a company owned by Angels owner Arte Moreno, was conducted under the agreement that a new and vibrant neighborhood replace the sea of parking lots surrounding the stadium. Included in that neighborhood plan: housing, office space, restaurants and bars, shops, hotels and a fitness center amongst other things.

Those in agreement with the sale of the property argue that the sale falls within the exemption in California state law that allows development when it benefits the public, especially since it would provide not only housing options but a variety of accessible stores and lifestyle locations.

Per City News Service, to fall within the realm of acceptance for CSDHC and the Surplus Land Act, the city would need to:

  • Set aside at least 80 percent of the development for housing, with 40 percent of that housing affordable. Half of that affordable housing would need to be offered to “very low-income households.”
  • Go with a “mixed-use exemption” that declared the land “exempt,” and put out a competitive bid to qualified bidders, and apply a covenant requiring at least 25% affordable for low-income families.
  • Declare the land surplus, post a notice of availability for 60 days, and engage in “good-faith negotiations for 90 days with any entities that respond” and provide affordable housing for low-income families.

Another reason for the agency’s denial of the sale, is the fact that SRB Management was created just a month prior to the public announcement of the deal.

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According to the Los Angeles Times, this isn’t the first news of backlash that came at the notice of sale, as the City of Anaheim was sued by a citizen group, People’s Homeless Task Force, for the lack of clarity and relaying the terms to the public, claiming it violated state transparency laws.

The initial sale was also not unanimously agreed upon by the Anaheim City Council, with the final vote tallying 4-2. Councilman Jose Moreno, unrelated to the Angels owner, was one of the two votes in opposition to the sale. In response to the notice of violation, Moreno issued a statement indicating that the entire sale should be scrubbed and started from the beginning, with a new plan for transparency with the public.

The 153-acre site is worth approximately $500 million, based on an appraisal that was commissioned by the city, but the sale total barely eclipsed $300 million – due to the presence of the Angels franchise operating there. With the Angels there, it’s apparently worth $320.

This is exactly how much the deal was finalized for – $150 million in cash to the city of Anaheim and $170 million to community benefits like affordable housing. $123.7 million of that total is slated to go to over 450 apartments, while $46.2 is to be used for a seven-acre public park.

ANAHEIM, CA – DECEMBER 14: Los Angeles Angels owner Arte Moreno answers questions during a press conference to introduce Anthony Rendon at Angel Stadium of Anaheim on December 14, 2019 in Anaheim, CA. (Photo by Kiyoshi Mio/Icon Sportswire via Getty Images)

Along with the deal, Moreno apparently agreed to the Angels remaining in Anaheim until at least 2050, with five options that could extend that agreement for five years each.

Should the sale go through without change, Anaheim could be eligible for a fine of up to $96 million – 64 percent of the cash deal.

On the announcement of violation from CSDHC, Anaheim Mayor Harry Sidhu said:

“For far too long, the future of baseball in Anaheim has been an unresolved issue. We have heard loud and clear from our community that they want baseball to stay. Our plan does just that and brings affordable housing, parks and new revenue to serve our neighborhoods. This is a defining moment for affordable housing in our city. It would be the single largest expansion of affordability Anaheim has ever seen. It’s frustrating to hear that may not be enough. We remain committed to our stadium plan and are confident we’ll find the right path forward.”

Sidhu has noted that city officials will be reaching out to the Department of Housing to begin negotiations and reach an agreement where both sides can be happy moving forward.

The violation notice can be viewed in full here.

Angels Stadium of Anaheim is the fourth-oldest Major League Baseball stadium, operating as home of the franchise since 1966. It was also home stadium of the Los Angeles Rams from 1980 to 1994. It has hosted three All-Star Games, the most recent in 2010. The stadium is also slated to be one of the two stadiums designated for the softball and baseball events in the 2028 Summer Olympics, along with Dodger Stadium.

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(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)