The cash registers start ringing at Disney's Baseball Land this week.
The Walt Disney Co. and the city of Anaheim invite you to join the grand opening celebrations at the ballpark formerly known as Anaheim Stadium. That was $117 million ago, before barbecues and beer gardens, before luxury seats and dugout suites, before exploding waterfalls and cartoonish caps that could fit atop a small planet.
With every ticket you buy, every car you park and every hot dog or cinnamon roll you eat, Disney recoups that much more of its investment in the renovation of . . . uh, Edison Field. Disney got a $28-million head start--about one-third of its share of the project cost--simply by renting the stadium name to the utility company, for 20 years at $1.4 million per year.
The cash registers will not toll, however, for the city of Anaheim. In an era when cities can spend hundreds of millions of dollars on new stadiums, Anaheim contributed $30 million toward the renovation project, promising taxpayers they would more than recover their investment with the development of land surrounding the stadium.
Disney delivered on its promise to turn an ugly multipurpose stadium into a wonderful, whimsical ballpark. Now, the city must deliver on its promise to turn a parking lot into gold.
If it fails, Anaheim taxpayers could lose $20 million on an investment city officials assured them would cost them nothing. If it succeeds, communities across America could look toward Anaheim for a new and imaginative model of suburban stadium development.
With Edison Field awaiting fans, the Anaheim City Council awaits plans for the great development next door. Within the next few weeks, City Manager James Ruth said, he will ask the council to approve a formal development agreement for Sportstown, a 40-acre site adjacent to the stadium expected to include a hotel, restaurants, shops, theaters and offices.
Ruth declined to discuss specific figures, but he said latest revenue projections surpass the $23 million the city originally expected to earn from Sportstown over the term of the Angels' 33-year stadium lease.
"Sportstown is a slam dunk," Ruth said. "It's well in excess of $23 million."
It had better be. Disney already has fulfilled its obligation to pay the city $10 million to cover lost advertising revenues, city finance director Bill Sweeney said. The city must find the other $20 million in the parking lot.
"The deal relies on the development of Sportstown to get the money back," Sweeney said. "Clearly, we have to be successful in developing the parking lot."
The proposed agreement requires Forest City, the Cleveland-based developer selected by the city, to start construction within two years. The Sportstown attractions--the businesses that would generate the tax revenue to repay the city for its stadium investment--likely would not open for business for three to four years.
Edison Field opens this week, but the city must sit with collective hands in pockets while Disney fills its pockets with revenue from admissions, parking and concessions. The city can make no money from concessions, and the Angels must surpass high thresholds for the city to collect limited revenue from admissions and parking.
For instance, while Disney pays the city $2 for each admission over 2.6 million, the Angels never have drawn that many fans during this decade. Disney optimistically hopes to attract 2.5 million to Edison Field this season, which would represent a 42% increase from last season.
"If they hit their goal, the taxpayers get zero," Anaheim City Councilman Bob Zemel said.
Zemel, one of two dissenting votes when the council approved the stadium renovation and lease agreement with Disney, said taxpayers should share in revenue generated from a city-owned stadium, including naming rights.
"We had the right to do Sportstown with or without this deal, with or without this stadium, with or without Disney," Zemel said. "That should be the bonus.
"This is the worst deal in America. We already owned the stadium and the land and the development rights around it."
The city paid $13 million to preserve rights, settling a lawsuit that otherwise could have precluded development on the Sportstown site. In addition, despite the probable absence of stadium revenue, the city must continue to make a stadium mortgage payment of nearly $1 million per year.
Ruth defends the deal he negotiated, citing the alternative of an aging stadium sitting vacant. In between the collapse and revival of talks between Disney and the city in 1996, with Disney's purchase of the team contingent on an agreement, Angel co-owner Jackie Autry threatened to move the team from Anaheim when its stadium lease expired in 2001.
In addition to securing the Angels in Anaheim and securing Disney's consent for the Sportstown development, Ruth said the deal privatized stadium operations, on which the city often lost money.
"Basically, we've got a brand new stadium," Ruth said. "The city invested $30 million, $10 million of which we got back immediately. Our out-of-pocket cash is $20 million over 30 years for a $117 million improvement.
"Most cities I know would give their right arm to cut the deal we cut. There's never been a better deal cut in major league baseball than the one we cut."
Martin Greenberg, co-author of "The Stadium Game" and a national expert on sports law and facility financing, called Anaheim's $30 million investment "a very small price to pay in this day and age," particularly considering another owner might have demanded a new stadium as the price for staying in town.
In addition, Greenberg said, the city could not have expected Disney to make such a substantial contribution without granting the company the right to manage the stadium and retain most of the revenues.
"I think the taxpayers got a damn good deal," Greenberg said. "Owners have been screaming the only way you can create a state-of-the-art facility is through new construction. I salute this creative solution. You saved between $150 and $250 million by retrofitting."
Said Mayor Tom Daly: "Once you're in the stadium business, you have to decide whether to stay in it, change the formula or get out of the business. We changed the formula, and I think the new formula is better than the old formula."
The wildly successful ballparks of the decade tend to revitalize a downtown core, as with Coors Field in Denver or Jacobs Field in Cleveland, or accent a redevelopment area, as with Camden Yards in Baltimore's Inner Harbor.
In Cleveland, where the Indians have sold out 211 consecutive games, Indians Vice President Bob DiBiasio said fans can visit close to 30 restaurants within a five-minute walk of Jacobs Field.
"They have to walk through the shops and restaurants of the neighborhood to get to the ballpark. That's why the neighborhood is so much fun now," DiBiasio said. "The thing that most people comment about is just the sheer electricity downtown because of the pedestrian traffic, starting about 4:30 for a 7 o'clock game. People are coming downtown or getting off work, and they've all got their Tribe stuff on."
In Southern California, where fans do not walk or take mass transit, the Angels play in a stadium surrounded by a parking lot. When Disney suspended negotiations with the city in 1996, Anaheim Sports president Tony Tavares explained that an expanded Sportstown project would consume too many parking spaces.
"This is not a city stadium," Greenberg said. "We don't have as many examples of successes or failures from a development standpoint."
In an attempt to imitate the lure of downtown ballparks, Disney included within Edison Field musical entertainment, interactive family attractions, merchandise stores and a variety of food and drink options, from prime rib in a dining room to picnics beneath palm trees. The Angels invite you to come early--stadium gates will open earlier this season, perhaps two hours before game time--and stay late.
"We're doing the best we can with what we've got," said Ken Wachter, the Angels' vice president of sales and marketing. "We're trying to make the ballpark a destination point."
Can Disney ultimately succeed without Sportstown?
Yes, says Tavares. In the absence of a Cleveland-like core, he counts Disneyland, the Arrowhead Pond and the restaurants, shops and theaters in two new retail developments near the Pond among people magnets.
"There's enough critical mass in the area so that you can still accomplish what you want to," Tavares said. "To the extent the city is able to pull off Sportstown, that will enhance it."
Yet Forest City, the private development company, believes Sportstown can succeed without the Angels. Orange County attracted 37 million tourists last year, according the Anaheim/Orange County Visitor and Convention Bureau. That number should jump by 2001, upon completion of expansions at Disneyland and the Anaheim Convention Center and construction of Sportstown and the City Mills shopping center in Orange, one mile from Edison Field.
"In retail and entertainment, bodies are the key. We clearly have the numbers in terms of visitor count that most cities don't have to start with," Forest City planning director Victor Grgas said. "If anything, it's probably better than a downtown location. Most downtowns don't see 30 million people a year.
"It's not just the ballpark we're counting on. We're counting on people coming to the Anaheim resort area. That number is a lot more than the number of people coming to the ballpark, on an annual basis."
The developers of Tinseltown, a Hollywood theme restaurant scheduled to open this fall in the Edison Field parking lot, also believe they can succeed without the Angels. In addition to the tourist base, seven million people live within 25 miles of the stadium, according to Urban Decision Systems.
"That's why we located where we located," Tinseltown partner Jim Garber said. "We'll get good visibility, of course, with crowds coming to the game. . . . But it's nothing where we're reliant on crowds coming to the stadium and saying, 'On our way home or on our way to the game, let's stop off at Tinseltown.' "
Anaheim perches on the edge of a new wave of stadium development. Toronto's Skydome, opened in 1990, features a hotel peering down on the outfield. The Texas Rangers included a Friday's restaurant and a four-story office building within The Ballpark in Arlington, which opened in 1994.
Sportstown extends those visions into another dimension. No longer need cities and teams confine their search for revenue to the seats and suites and spaces within the stadium.
"The ballpark itself is not the only or primary source of entertainment," Greenberg said. "The city may have a very valuable right as far as development of the surrounding areas and making them successful, using the ballpark as a center stage."
Disney may not need Sportstown to succeed, and Sportstown may not need the Angels to succeed, but the city needs both. Should Anaheim make back its investment and rake in millions more, communities and sports franchises across America will cast a longing eye in this direction, toward joint development that extends beyond stadium walls.
In Anaheim, the development eventually could extend beyond the stadium parking lot. If Sportstown succeeds, the commission currently exploring a "bullet train" from Anaheim to Las Vegas could more readily secure funding, since the train would stop at the station adjacent to Sportstown. And, if Sportstown succeeds, the clusters of tourists near State College Boulevard (Edison Field and Sportstown) and Harbor Boulevard (Disneyland and Anaheim Convention Center) could spur the redevelopment of Katella Avenue over the two miles in between.
"Some people describe that as a future Wilshire Boulevard," Ruth said.
Oh, and please don't consider Grgas heartless. If Forest City can imagine cashing in on Sportstown while Disney loses money on Edison Field, well, that's strictly business.
"The success of our project is not tied to the success or failure of the baseball stadium or the team," he said. "But I live in Orange County. I'd love to see the Angels win the World Series."