Anaheim owes Angels owner Arte Moreno $5 million. Why hasn't the city paid?

In a dizzying span of 12 days, the deal collapsed.

No longer would Angels owner Arte Moreno buy the Angel Stadium property and anchor his team to Anaheim for decades to come. No longer would he make the vast and desolate parking lots around the stadium come alive with places to eat, drink, live and work. No longer would Angels fans get to count down the days until the old ballpark would be upgraded or a new ballpark would rise next door.

On May 16, 2022, the disclosure of an FBI affidavit alleging Anaheim mayor Harry Sidhu had shared a confidential land appraisal with the Angels in the hope of securing a million-dollar campaign contribution from them forever tainted a stadium sale four years in the making.

On May 23, Sidhu resigned. On May 24, the Anaheim City Council killed the deal. On May 27, the Angels agreed not to contest the decision, and the city agreed to return the $50 million Moreno had put into escrow.

That left one piece of outstanding business. The sale agreement entitled Moreno to recover $5 million in “transaction costs” if the city backed out of the deal.

On June 15, the Angels formally asked the city for that $5 million. Two years later, the city has not paid — and Moreno has not sued.

The two sides appear to be making a push to resolve the matter.

On Tuesday, for the third consecutive meeting, the Anaheim City Council is scheduled to discuss the issue behind closed doors. The council agenda provides no details but notes the city faces “significant exposure to litigation.”

Said city spokesman Mike Lyster: “We continue to talk to see if we can find a way to put this claim behind us in a way that works for everyone. Litigation is in no one’s best interest, and we are confident about a path forward.”

The Angels declined to comment.

Moreno is not shy about litigation, but the city almost certainly would try to broaden a lawsuit into areas Moreno might prefer to avoid.

Moreno could argue the contract language is clear and the city must pay. If a judge agrees, that would be game over.

In 2023, Sidhu signed a plea deal that acknowledged he “provided confidential negotiating information belonging to the city … so that the Angels could buy Angel Stadium on terms beneficial to the Angels” and kept that disclosure secret from the rest of the city council.

Neither the FBI affidavit nor the plea deal alleges the Angels did anything wrong, and a lawyer representing Moreno has told the city that his management company and the Angels “acted in good faith.”

However, the city could argue it should not be bound by the terms of a contract negotiated after the mayor covertly delivered the city’s playbook to the opposing team.

Anaheim City Attorney Robert Fabela, who told the Angels in a 2022 letter that the unauthorized disclosure of city information “throws all aspects of the … deal into shadow,” told the council he believed a court would permit the city to depose Moreno and Sidhu in any litigation. As the breadth of any lawsuit widens, litigation can go in unpredictable and costly directions.

In 2022, on the day the council killed the deal, councilman Stephen Faessel said: “This is going to be litigated for the next several years.”

There has been no litigation so far.

If the city and the Angels resolve their $5 million quandary, it will not mean the stadium sale is back on course.

Beyond a cash payout, there could be other opportunities for a modest settlement, given recent skirmishes between Anaheim and the Angels on the construction of a fire station in the stadium parking lot, on the scope of an assessment of what the 58-year-old stadium needs to remain viable for decades to come, and on who pays what for ballpark maintenance and upgrades.

The Angels’ lease at Angel Stadium expires in five years, although the team has options to extend the lease through 2038. Within a decade, Anaheim has walked away from two deals that would have provided a long-term resolution for both the city and the team. For the moment, detente might be the best both sides can do.

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