Risky Path for Anaheim : Caution Needed on Shaky Plan for Sports Complex

Anaheim’s precarious status as a sports center seems always poised on the verge of something really exciting or really disappointing. No modest dreams need apply.

This is a period of flux in the sports scene for the professional baseball and hockey teams and the proposed Sportstown complex. The city government is committed for a lot of money there, and much more downtown for infrastructure improvements related to the Anaheim Convention Center expansion and the new Walt Disney Co. attraction. It must be a player itself in shaping the city’s future as suitors come and go. Now that it’s on the hook, it must find ways to bring in tax revenue from new hotels and other development to meet its substantial financial obligations.

Anaheim has enjoyed a respite during the years of Walt Disney Co. association with the Angels and Mighty Ducks, but now that the sports interests are for sale, once again the future holds only the likelihood of change. Because the big money players--those who invest in sports franchises and dream of indoor surfing and snowboarding for projects like the 40-acre Sportstown--control much of the real decision-making power, the city’s exposure for its previous gambles once again is glaringly apparent.

The city got lucky when part of its public investment in the Arrowhead Pond arena was covered by the fortuitous arrival of a professional hockey team, with Disney as benefactor, well into the planning and construction. We now know from recent comments by Disney Chairman Michael Eisner that the company came to see itself in the role of stabilizing Anaheim’s sports environment with the sports franchises in order to protect downtown investments.

Now that Disney is talking about moving on from the sports teams, there are no guarantees that the city will get lucky again for its commitments over the vast acreage designated for an extreme-sports, retail and restaurant complex called Sportstown.

What happens in the parking lot and environs of Anaheim Stadium long has been as much a problem as an opportunity for the city. The city got caught in the middle of flying footballs and baseballs when the Angels balked at the city’s agreement to let the Rams put office buildings in the parking lot as part of an effort to sweeten a move south from Los Angeles in 1980. The Rams eventually left town; a settlement cost the city $13 million, but it did preserve rights to the lot--rights that now come into play as new potential owners gather on the horizon for the sports teams and as developers plan the Gotcha Glacier, the $105-million indoor extreme-sports park.

Because the city had earlier troubles with the Sportstown dream--no money and no tenants--it agreed to a substantial reduction in the size of the project to make room for Angels parking. The reduction in size was itself not necessarily a problem, but who would occupy the project has become more of a concern. That happened as potential tenants signed on with the Block at Orange and as Disney developed its own plans for the Downtown Disney zone--and as the Pointe Anaheim project, a planned $500-million entertainment center, was proposed.

The bottom line for City Hall is that Anaheim needs revenue from Sportstown for its math to pencil out on the $20-million investment it made up front in Edison International Field.

It also would help if it could get new bed tax revenue from proposed nearby hotels, because somehow it must come up with its huge obligation to pay principal and interest on a $518-million bond offering for downtown improvements.

It might be desirable for the sports teams and the Sportstown complex to come under one ownership so that the city could focus more easily. However, Glacier developer Henry T. Nicholas III, co-founder of Broadcom Corp., recently said his interest was restricted to acquiring broadcast rights for potential Internet ventures, and that he was not looking to become a major investor in the baseball and hockey franchises.

The problem for the city is that it has made its bets up front and essentially has been rolling the dice through the 1990s. The notion that if you commit to something they will come is risky. Moreover, many municipalities are finding little political support for public investment that goes directly to private developers. In the political environment of the late 1990s, there are demands that help with infrastructure be of benefit to surrounding communities.

Since theme park entertainment and sports are such key franchises to Anaheim’s sense of place, it probably gets cut more slack in this area than in some other cities.

But Anaheim has plenty of work to do to make good on its pledges and should be cautious about what promises it makes with public investment in the future.