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The California State Auditor says Anaheim has not been able to ensure that Angel Stadium is properly maintained and recommends future lease agreements with the Angels better specify maintenance responsibilities and inspection requirements for the aging stadium.
Requested by two state lawmakers who said they had “deep concern” that the Angels haven’t been living up to their end of the agreement, the California State Auditor’s office examined whether the team has met its revenue-sharing and maintenance spending obligations to maintain the city-owned Angel Stadium, one of the oldest ballparks in the majors.
Their report, released Thursday morning, found no instances where Angels ownership violated the lease agreement, but gave recommendations for what the city should include in future stadium agreements.
Moving forward, auditors said the city should audit the Angels’ ownership records yearly to verify the team is giving its fair share of revenue. The auditor’s office also said the city should regularly conduct stadium inspections and make those records public.
The report recommends future lease agreements for the city-owned stadium include clear language about the city’s right to inspect the property and better delineate who is responsible for what maintenance. The city, according to the report, does not know the physical condition of the stadium, which might need hundreds of millions in maintenance and repairs.
“The Angels have and will continue to invest millions into the stadium to enhance the fan experience,” Angels spokesperson Marie Garvey said in a statement.
The city, in a statement, said it welcomed the recommendations and noted the current lease was negotiated 30 years ago when the team was owned by the Walt Disney Company.
“We appreciate the work of your team on this matter, and we look forward to implementing many of the suggestions made,” City Manager Jim Vanderpool said in the city’s official response letter.
Lawmakers last summer approved the emergency audit of the team’s 1996 lease agreement with the city. The California State Auditor’s Office was directed to see if the team had shirked its responsibility and if it had denied the city any revenue that should have been shared. The city has not said the team wasn’t meeting its requirements under the lease.
The lease requires the Angels to maintain the stadium to be “at least equal to (a) first-class professional baseball stadium, such as … Kansas City and Dodger stadiums.” Those stadiums are the closest in age to Angel Stadium, which opened in 1966.
The audit criticizes the lease for having vague language and not adequately defining the Angels’ responsibility for paying toward maintenance and repairs of the stadium and warns that it could cost the city down the line.
Other publicly owned baseball stadiums that auditors looked at in California, including San Diego’s Petco Park and San Francisco’s Oracle Park, have clearer terms for allowing access to monitor maintenance and additional means to share revenue.
State Sen. Tom Umberg and Assemblymember Avelino Valencia made the initial audit request that a joint legislative committee then approved. They quoted past estimates the stadium requires nearly $150 million in maintenance and said the team has demanded the city help cover the expense.
That $150 million figure comes from a 2013 report initiated by the Angels that said the stadium needed that level of spending over 20 years. The city never received a copy of that report, according to the state audit, and it’s unclear how those projected costs were determined.
Nevertheless, city officials have acknowledged that the 58-year-old stadium likely needs work.
The state audit criticized the city for not knowing the stadium’s exact condition and taking little action until recently to conduct an assessment of the aging stadium’s condition, looking at what repairs might be needed.
Anaheim and Angels ownership disagree over the city’s right to access the stadium for inspections, according to the report.
City officials are finalizing an agreement this week with the Angels to allow access to the stadium to conduct the second phase of that assessment, officials said. The City Council first approved the work in November 2022.
Mike Lyster, a spokesperson for Anaheim, said the second assessment phase may involve bringing in equipment and scaffolding in places to look at the condition of things such as concrete, ventilation and escalators. The city has to work around the stadium’s event schedule and negotiate with the Angels for access, he said.
Valencia said in a statement that the audit’s findings are “deeply alarming and frustrating” and the city needs to ensure issues like access to the stadium for maintenance oversight are addressed immediately.
Another disagreement highlighted in the report stems from what the Angels have already contributed toward the stadium’s capital reserve fund, which both the team and the city pay into annually for stadium improvements.
Throughout the lease, the Angels have spent $35.6 million more for stadium repairs and improvements than what was required. The team has said that excess money must be repaid by the city once the lease is over, which City Attorney Robert Fabela has said is a meritless claim.
The auditors warned the two sides must work through the disagreement or face the possibility of litigation once the lease is over.
The Angels share revenue with the city once certain benchmarks are hit yearly. For example, the city gets $2 for every ticket after the first 2.6 million are sold for a baseball season. The city also gets a quarter of the parking revenue once it surpasses $8.1 million a year.
The Angels provide annual letters to the city indicating stadium revenue, but they do not include supporting documentation. Auditors found that in the nearly 30 years since the lease was agreed to, Anaheim has netted $415,000 from the stadium over that time. That amount excludes the $76 million in base rent the team paid in 1997 that the city later returned to Angels ownership to pay for renovations, and it doesn’t include the additional $20 million the city kicked in.
“That was really striking to me,” Umberg said, “is how little the residents of Anaheim have gained in revenue over the last 30 years.”
Umberg, who represents the area, said the audit confirms the Angels have a sweetheart deal that hasn’t benefitted Anaheim residents.
“The clearest message is the lease that exists is incredibly one-sided to the detriment of Anaheim taxpayers,” Umberg said. “And at the very least, the city of Anaheim needs to have the right to inspect the stadium for the health and welfare for those who attend events at the stadium.”
Umberg added it was “unconscionable” the city would owe the Angels more than $30 million once the lease expires for the extra money they put into the stadium’s capital reserve fund.
Future lease agreements should require rent throughout the lease and any extensions and mandate periodic stadium inspections by an independent third party, auditors recommend in their report.
City officials told auditors that generating revenue from the lease agreement was not a priority during the initial negotiations. The city’s goals then were to keep the Angels in Anaheim, overhaul the stadium at minimal cost to the city and shift operating risk, according to the report.
Valencia is a former Anaheim councilmember and was on the council that voted to cancel a prior deal to sell the stadium to a business partnership of team owner Arte Moreno following revelations former Mayor Harry Sidhu was being investigated by the FBI, in part because of his actions in the negotiations.
Sdihu later admitted to providing confidential pricing information about the stadium to a consultant working for the Angels so the team could buy the stadium on favorable terms. He has pleaded guilty to federal corruption charges and is set to be sentenced on Friday.
In February, the Angels exercised the first of three options to extend their stay at Angel Stadium by three years to 2032. The team can use two more options to keep playing at the stadium through 2038.
That same month, Moreno told MLB.com that the team puts about $5 million to $7 million into the stadium each year, but isn’t willing to spend big to do a major redevelopment for a stadium the city owns.
“But I’m not going to put $200 or $300 million into a stadium that a city owns without any of their participation,” Moreno said. “Maybe we’ll get a new mayor and council that want us to stay.”
The last major stadium renovation was 25 years ago.
City and team officials have said no talks to either enter a new lease or sell the stadium have resumed since the $320 million deal – it would have allowed Moreno and his business partnership to develop the parking lots with housing, offices and retail and resulted in either a new or revamped stadium – was canceled in 2023.
The audit found that previous appraisals the city obtained on the value of the stadium and the 153 acres it sits on were supported by detailed analyses. The 2019 appraisal put the value of the stadium at $320 million if the Angels purchased it and the surrounding land, but the auditor noted the city should have made the appraiser obtain more supporting details for the value.
The audit’s release coincided with MLB’s opening day on Thursday. The Angels are in Chicago to face the White Sox for a three-game series.
