Jobs for Orange County. Taxes for the city of Anaheim. Profits for the Los Angeles Rams.
The 1978 deal that lured the Rams to Anaheim Stadium appeared to be a win-win-win proposition, centered on the Rams’ ability to put up money-making office buildings in the stadium parking lot.
The Angels, the original tenants of Anaheim Stadium, filed suit. The ensuing legal war still raged in 1995, when the Rams fled Anaheim for St. Louis.
As prospective buyers of the Dodgers prepare to submit opening bids for the team next week, the Anaheim experience serves as a cautionary tale. Frank McCourt has the option to sell the Dodgers but keep the surrounding parking lots, and his interests as landlord and potential developer might not coincide with those of the new owner.
“You want to make the experience at the ballpark the most pleasant experience you possibly can,” former Angels president Richard Brown said. “You’re not going to be able to do that unless you have control.”
The Dodgers are in bankruptcy, but the McCourt entity that controls the Dodger Stadium parking lots is not. In order to get McCourt to sell the team without a round of litigation over the parking lots, Major League Baseball agreed to grant him “sole and absolute discretion” over whether to keep or sell the land.
The agreement stipulates that prospective buyers “may submit bids that include the purchase of the parking lots.”
If the lots are not sold with the team, the new owner would lease them from McCourt for $14 million a year. The annual lease payment would rise in 2015, and every five years thereafter.
Dodgers spokesman Robert Siegfried declined to discuss what factors — financial or otherwise — McCourt might consider in his decision.
Most bidders are expected to ask McCourt to include the land in the sale, according to multiple people familiar with the process but not authorized to discuss it.
“It’s a negotiating tactic,” said a person involved in one of the bids. “It’s just a way to extract more money from the buyer.”
Marc Ganis, president of Chicago-based Sportscorp Ltd., said a buyer might well pay a premium now to eliminate the risk of a future lawsuit against McCourt over development of the property. McCourt has been in court against his ex-wife, his former law firm, MLB and Fox Sports over the last three years.
“He’s shown himself to be very contentious and litigious,” Ganis said. “That is never a good situation to walk into. I suspect he will use that reputation to command a higher price.”
However, McCourt could try to develop the land in a way that could rehabilitate his battered civic image.
“There is no doubt in my mind he wants to hold on to the property,” said a person familiar with McCourt’s thinking. “L.A. is his home. It will remain his home.”
The NFL has long coveted the Dodger Stadium site, and league officials acknowledged two meetings with McCourt representatives in 2005. In an internal memo obtained by the Boston Herald that year, McCourt was advised that he could bask in the “psychic benefits of being the guy that brought football to L.A.”
Under the 2005 plan, and in the “Next 50" plan he proposed in 2008, McCourt envisioned shops and restaurants outside Dodger Stadium.
In a 2005 story in The Times, Los Angeles developer Rick Caruso imagined residences on the outskirts of the parking lots.
“I think you could build a little community that could be pretty spectacular,” he said.
The Dodgers bid of Caruso and former Dodgers manager Joe Torre focuses on the team rather than the property, said Charles Sipkins, a spokesman for Caruso. “There are no plans to develop the surrounding area,” Sipkins said.
In order to compensate for whatever parking spaces might be lost to development — to stores, restaurants, residences, a football stadium or anything else — the Dodgers could build parking structures. McCourt proposed two such structures as part of the “Next 50" plan, and the parking lot lease would allow them.
The possibility of parking structures at Anaheim Stadium prompted the Angels to file suit all those years ago. The Angels’ lease guaranteed them a certain number of parking spaces on flat ground, and the proposed office buildings would have eaten up so much of the parking lot that structures would have been required.
The Angels objected, claiming fans would be stuck in jams getting out of a parking structure after games. The city of Anaheim disputed the assertion, citing plans for exit ramps on every level and perhaps a direct ramp onto the 57 Freeway.
Eventually, the Angels secured their ground-level spaces, and the development was scaled back, but not before the legal bills on all sides topped $20 million.
Parking structures might not be the only issue for discussion between McCourt and a new team owner.
For instance, when the Walt Disney Co. agreed in 1997 to buy the Angels and renovate their stadium, the company insisted that fast-food restaurants be restricted from opening in the adjacent parking lot, in order to protect ballpark concession sales.
Greg Smith, the executive who oversaw Anaheim Stadium on behalf of the city, said the new Dodgers owner cannot afford to buy the team without negotiating with McCourt on the future of the parking lots.
“Obviously, the ideal situation is whoever has the team controls the parking,” Smith said. “If that can’t happen, the buyer needs to make sure it is very specific about what can happen in the parking lots. If they don’t want development, it’s got to be stipulated in the agreement.”
Brown, who as Angels president once negotiated against Smith, heartily agrees. However, with more than a dozen publicly identified bidders for the Dodgers, Brown warned that a prospective owner cannot count on McCourt’s including the land in a sale, no matter how high the price.
“Chances are, somebody will come in and say, ‘We’ll take it the way it is,’ ” Brown said. “If your bid is conditioned on the fact that you’re getting the land, you may not get the winning bid.”