Anaheim Offer Would Put Arena on Jail Site

Anaheim has offered the county $8 million for land to build an $85-million sports arena on a site that is also being considered for a new county jail, a critical element of the effort to relieve jail overcrowding.

The offer, capping months of talks, leaves county supervisors with the difficult choice of blocking the sports arena site or losing an important option in their efforts to end the overcrowding that has led to court-ordered limits on population in the County Jail.

Anaheim officials said the proposal is the most significant step yet in a 3-year campaign to bring another professional sports franchise to Orange County.

Two county supervisors said Wednesday that they endorse the idea of scrapping plans for a jail and selling the property if the price is right.

If the county accepts, private developers and city negotiators say that a 20,000-seat arena could be built within 2 years, with the prospect of drawing a first-ever National Basketball Assn. team or hockey franchise to Orange County.

But the parcel, 7.6 acres near Anaheim Stadium, is still listed by the county as the site for a 10-story maximum-security jail. The only other jail site under consideration is in Gypsum Canyon, just south of the Riverside Freeway and east of Anaheim Hills. Both proposed jail sites have been highly controversial, spawning lawsuits, intense local opposition and dividing the Board of Supervisors.

The stadium deal would provide a cash inducement for the financially strapped county and fulfill Anaheim’s twin goals of drawing another professional sports team and scuttling any further discussions of building a jail.

“Everything is falling into place,” said Anaheim Mayor Fred Hunter. “Having an arena benefits all of Orange County, not just Anaheim. People come for Angels and Rams games from all over.”

Hunter said an arena also makes more economic sense for the county than a jail. “This is some of the highest-priced real estate in Orange County,” Hunter said. “If there’s going to be a jail, you sure don’t want to put it on a million-dollar-plus-an-acre site.”

Question Need for Jail

Both Supervisors Don R. Roth and Thomas F. Riley on Wednesday questioned the need for the Katella-Douglass jail and said they supported the sale of the property if the price was right.

“That has about as much chance of being a jail site as I have of being a brain surgeon,” quipped Roth, whose district includes Anaheim. Roth has also long opposed the construction of a jail at the Anaheim site.

Riley said: “I don’t know why we need to keep that place for (a jail), especially when we can get something that we would benefit from tax-wise and get some entertainment. . . .”

The other three supervisors could not be reached for comment, including Gaddi H. Vasquez, whose district includes the Gypsum Canyon site.

Despite the fact that Roth and Riley appeared to be leaning toward the sports arena, other county government officials Wednesday questioned the adequacy of Anaheim’s offer.

Bob Love, an analyst with the County General Services Agency, said the county has done its own appraisal of the property and found it to be worth more than the $8 million offered by Anaheim. He would not disclose the county’s appraisal.

Anaheim originally had considered more than half a dozen possible arena sites. The latest offer narrows that choice to one, and a 15-acre backup site remains an alternative if the plan collapses, city officials said.

Plans for the sports arena show that it would be built on about 5 acres of land, recessed into the ground. Its maximum height would be about 70 feet. It would feature 80 luxury suites set halfway up the seating area with private dining areas for entertaining. It would also have two restaurants, public and private, along with food concessions.

The offer to purchase the land near Anaheim Stadium at Douglass Road and Katella Avenue came after many delays and months of negotiations between the city and county.

“We’re close now,” said Jim Ruth, Anaheim’s assistant city manager and lead negotiator. “We feel we can wrap this thing up.”

The Anaheim City Council unanimously approved the 20-page offer in a closed session late Tuesday.

The offer included a proposal for the city to lease nearby county parcels of 17 acres and 5 acres for parking. But cost details of the leasing plan must still be negotiated. About 3,000 parking spaces of the 7,000 needed for the arena will have to be shared with the Rams and Angels, city officials said.

Discussions With Teams

Serious discussions with at least three basketball franchises and National Hockey League teams have taken place, according to Neil Papiano, a Los Angeles lawyer who heads a partnership of the Nederlander Organization and Ogden Foods, which wants to develop and operate the arena.

“We feel very confident that we will have a team,” Papiano said Wednesday. “The arena will be ready for the 1991 basketball season.”

The Board of Supervisors could vote on the offer and agree to sell the land by the end of the month. The Anaheim council must then approve the deal as well as agreements with Papiano’s group.

County Administrative Officer Larry Parrish said he had received a formal offer from Anaheim in the mail, but that he returned the letter Wednesday because the offer did not mention how much the city was willing to pay to lease the second two parcels.

Anaheim negotiators said they would return with a lease agreement, including pricing, as early as today.

If the city responds promptly to his letter, Parrish said the question could be set for a meeting of the supervisors within 2 to 3 weeks. He also said that he is likely to present the issue to the supervisors without making a recommendation.

The so-called Katella-Douglass jail site is one of three proposals by the county to relieve its overcrowded jails over the next 20 years. The others include the expansion of the Theo Lacy Branch Jail in Orange, which is the subject of lawsuits, and the 6,000-bed jail planned for Gypsum Canyon.

County officials and supervisors have publicly questioned whether they need to build the Katella-Douglass jail. But its importance is largely contingent on whether the county has a major problem in building the Gypsum Canyon jail.

“If plans in that direction were to materialize in a timely way, then it would minimize” the need for the Katella-Douglass jail site, Parrish said. “If that would all fall apart, then clearly we’re going to have to have sites where we can build some sort of correctional facility.”

Last year, the county lost a lawsuit filed by Anaheim over the construction of the Katella-Douglass jail. A judge agreed with the city that the county’s environmental impact report did not adequately deal with the surrounding area.

Recently, the supervisors voted to spend $60,000 to redo the EIR.

Parrish also said the board will have to consider a policy that it adopted last year in which it decided not to sell its surplus property but to seek ways to produce continuing revenue for the government. So, Parrish said, the supervisors could offer to allow the sports arena development, with the county maintaining an interest or some of its ownership.

Another factor in the county’s decision is how much the $8 million might help its bleak financial situation.

But, Parrish said, “It would be a godsend to have $8 million or $10 million drop in our lap. On the other hand, in terms of good policy, if that property generated $40 million in the future . . . you could be losing a resource and getting one-time money.”

Ruth, Anaheim’s lead negotiator, said the site’s $8-million price tag came from an independent appraiser hired by the city with the county staff’s approval. Ruth ruled out any form of future revenue-sharing from the arena’s operations.

Times staff writer Kenneth L. Reich, in Los Angeles, contributed to this story.