City Plays Ball With Disney on Big A Fix-Up

With the Walt Disney Co. threatening to abandon plans to buy the California Angels, the City Council reluctantly has agreed to contribute $30 million of taxpayer funds toward the renovation of Anaheim Stadium.

A majority of the council last week had balked at Disney’s proposal that the city pay $30 million of the proposed $100-million renovation of the Big A, with Disney paying the rest. City officials made a counteroffer, which Disney rejected. On Monday afternoon, in a special closed meeting, the council relented, sources said Tuesday.

City officials said they believe the $30 million could come from reserves and/or income from Sportstown Anaheim, the city’s sports, entertainment and retail complex that has been proposed for property around the Big A.

“At this point, I support the concept,” Councilman Lou Lopez said of the 70-30 cost split. “I’m pleased that the city is moving forward with keeping major league baseball in Anaheim. We’re optimistic that we will keep the Angels here for another 30 years.”

The deal would include a new 30-year lease for the Angels and conversion of the Big A from a multi-sport stadium to a more intimate, baseball-only venue. Disney also would operate the stadium in an arrangement similar to that at the Pond, which is owned by the city but run by a private contractor.

But the council’s decision was not unanimous.

“I just believe that our job is going to be a lot harder by giving away too much upfront,” Councilman Bob Zemel said. “I could not support turning over the stadium for 30 years to a private enterprise. Without some kind of revenue stream, it seems like more than an investment, it seems like a gift.”

The deal could be finalized in two weeks, culminating several weeks of intense negotiations. Disney had threatened to walk away from buying the Angels if the two sides could not agree on stadium renovations by March 17.

If the two sides can out iron out details in the coming days, City Manager James D. Ruth said, the council could take a final vote on March 19.

“I think it’s doable in a couple of weeks,” Ruth said. “But there is no deal until all of the deal points are resolved. We need to agree on all of the issues.”

Disney officials continued to be silent on the negotiations Tuesday.

“We’re still speaking to each other and negotiating,” said Bill Robertson, spokesman for Disney Sports Enterprises. “Beyond that, I can’t comment on the negotiations.”

The major stumbling block in the negotiations has not been the division of renovation costs as much as the division of profits from the stadium’s various revenue sources.

Under the current lease, the Angels and the city split parking revenue 50-50, and the Angels receive 60% of concession revenue. The city charges the Angels 7.5% of gate receipts for the first 2 million fans and 10% of gate revenue after that.

It was still unclear Tuesday how this money would be divided under a new lease. But sources said that under the current proposal, the city would receive smaller percentages of attendance and parking revenue.

The city apparently would be able to make back its investment through the development of Sportstown Anaheim. Because of damage to the stadium from the Jan. 17, 1994, Northridge earthquake, the city was able to designate the stadium and parking lot a “redevelopment project.” This enables the city to use any increases in tax revenue to help pay for stadium improvements and developments such as the Sportstown project.

The proposed complex has no known investors at this point and would have to be paid for with private money, city officials said. The agreement with Disney apparently would not include the company’s participation in the project, sources said.

Zemel said he had been told that the city could make up to $41 million over the next 45 years in redevelopment funds that could be used to pay back its $30-million stadium investment. The councilman said he is unhappy with this scenario.

“The future development of Sportstown should not be used to offset the $30 million,” Zemel said. “It’s a huge gamble. I don’t fault Disney. I think they have cut a shrewd deal, and they are extremely important to the city of Anaheim. I just can’t support this kind of subsidy.”

Ruth said that details over the revenue sources are still being negotiated and said he hoped that the council would be in total agreement on the issue when it comes before them for a formal vote.

“We’d like to have all five members consent to whatever we agree to,” Ruth said. “These deals are always tough. You have to be respectful of each other’s issues and understand where everyone is coming from.”

Zemel also expressed dismay over the likelihood that the city would initially have to dip into its reserve fund to pay for its share of the renovations.

“We are using city reserves to make this deal happen,” Zemel said. “These are the same precious reserves that I’ve been told we can’t dip into to put more police on the street. It’s shocking to me that we can use these reserves that aren’t available for more cops but that they can be used instead in derivatives and Disney.”

Last June, the council approved a lean $133-million general fund budget, which included money for nine new police officers but eliminated 31 positions in other departments.

The city’s already tight budget suffered further when the county declared bankruptcy. The city had $167 million in the collapsed county investment pool and is still $17 million short from that.

But the city’s saving grace has been its healthy reserve fund that has grown steadily from $79.9 million in 1990 to more than $100 million. Some of that money could be tapped, Finance Director William G. Sweeney said, but it would have to be repaid. In addition, the city has another $5.1 million of general fund reserves with no liabilities attached, he said Tuesday.

The final agreement also is expected to clearly spell out rights to the land around the stadium. This is considered a critical element with the possibility of a National Football League franchise returning to Anaheim and construction of Sportstown Anaheim.

This would be done to avoid a repeat of a 12-year legal battle over development rights to a portion of the stadium’s parking lot. The conflict involved the city, the Angels and the stadium’s former tenant, the Los Angeles Rams, who moved to St. Louis. Last December, the city agreed to pay $13 million to end the dispute.

If Disney and the city do finalize a deal, the 26-year-old stadium would undergo a major transformation.

Preliminary designs commissioned by Disney call for the Big A to be transformed from a 67,000-seat multipurpose stadium to a baseball-only facility with about 20,000 fewer seats.

The stadium’s Big A scoreboard, moved to the parking lot when the stadium was expanded for the Rams in 1980, would be moved back into its original place beyond the outfield, sources said.