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The Los Angeles Angels of ... Tustin?

What happens when a local mayor calls an entitled sports team owner's bluff in stadium negotiations? We're about to find out.

by Neil deMause
Oct 3 2014, 10:40am

Photo by Kirby Lee/USA TODAY Sports

Tustin. Let's all say it together: "Tustin." It sounds vaguely exotic, vaguely familiar. Obscure place name* from the Star Wars universe? Something involving milk reviews? Not quite.

As it so happens, Tustin is the possible new home of the Los Angeles Angels. Tustin, for those of you not up on your California geography, is a small city of 78,000 in Orange County with a vacant air force base and a dream. It is not, technically speaking, Tustin's dream. Rather, the dream belongs to Angels owner Arte Moreno, who last week celebrated his team's impending American League Division Series appearance by declaring that he was sick of negotiating with the city of Anaheim, where the Angels have played since 1966, and henceforth would have nothing to do with discussing a new lease there.

Moreno would, however, consider talks with other local municipalities, like that one a few miles down I-5 that had a closed-door council meeting coming up to discuss possible uses for its 1500 acres of idle land. What was it called? Oh, right: Tustin.

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Baseball owners, of course, have a long tradition of playing footsie with other cities, even—or especially—during the postseason, when fans and politicians alike can be expected to freak out over the prospect of their team possibly leaving town. (It's no coincidence that the Seattle Mariners got Safeco Field approved by the state legislature, overturning a narrow defeat in a city referendum, in 1995 during the team's first playoff run; nor that the Padres used their outfield walls during the 1998 World Series to advertise their upcoming referendum on funding what would become Petco Park.)

In extreme circumstances, owners will even hop on a plane to tour other cities in order to kick recalcitrant elected officials in the ass: Years after White Sox owner Jerry Reinsdorf spent 24 hours in pre-Rays Tampa Bay while the Illinois legislature debated building him a new stadium, he famously explained the trip by saying that "a savvy negotiator creates leverage."

But that's where the Tustin dalliance differs from the norm. Moreno's threat increasingly appears less like merely creating leverage, and more like a cry of desperation. It's all because Moreno has run into something he didn't expect to: the word "no."

Let's backtrack to last fall, when things seemed bright for Moreno indeed. Faced with a decision whether to extend his lease at the 47-year-old but much-renovated Angel Stadium or to exercise his opt-out clause at a time when his only other option was to make Mike Trout go play in the street, the billboard magnate managed to find a third option. He convinced the Anaheim city council to give him three more years of opt-outs. And better yet, the council offered Moreno a deal: If he'd agree to stay in Anaheim and spend about $150 million of his own money on yet another round of renovations, the city would hand over the rights to develop 155 acres in the Angel Stadium parking lot in exchange for the sum of one dollar.

It's the kind of offer that's becoming more common, especially in California, where actual public cash for development projects has become increasingly tough to come by. The right to put up acres of housing, though, is a reasonable substitute, and Moreno likely would have taken it, but for the intervention of Anaheim Mayor Tom Tait.

Tait asked a simple question: How much would that gift of $1 land be worth, exactly? One appraisal later, the answer came back: Between $245 million and $325 million, or about double the amount of money Moreno would be putting up toward renovations.

Tait had a counteroffer: How about cutting the city in on some of the redevelopment boodle? Moreno's response was to open talks with Tustin, as local sports columnists called up Google Maps to see how many other Southern California cities could be spitballed as possible new homes for the Angels.

The question, as always with sports move threats, is whether Moreno is serious or just, in the tradition of Reinsdorf, creating leverage. The Angels owner has been saying for months that he's willing to foot the bill for a new stadium if necessary, but baseball stadiums, let's not forget, are insanely expensive: the estimated price tag on a new stadium for the Angels starts at $700 million, not including land costs. If Moreno was indeed investing $700 million in a shiny new ballpark, it would need to provide around $40 million a year in new revenue just for him to break even. 

New stadiums, of course, do generate lots of revenue. But then, the Angels are already generating lots of revenue: According to Forbes' annual estimates, they're the eleventh-highest revenue team in baseball, raking in $253 million per annum. To generate another $40 million a year—which would just mean breaking even, mind you —a new stadium would have to launch them all the way up to 4th, behind only the Yankees, Red Sox, and Giants, and tied with the Dodgers.

A hangar and some open space in Tustin. Via Wikimedia Commons. 

That's certainly conceivable, if everything breaks right, and corporations keep throwing money at naming rights against their better judgment. But it's not the kind of gamble that makes anyone run for their checkbook. Which is why Moreno undoubtedly hoped that Tustin would do for the Angels what Cobb County, Georgia did for the Atlanta Braves, swooping in with a lucrative stadium deal after Atlanta Mayor Kasim Reed declared that the Braves' demands for renovations to their 17-year-old stadium were too rich for his blood. (Before you start awarding Reed any medals, however, consider that he happily funneled close to half a billion dollars to the Falcons for a new stadium to replace their 21-year-old one, and has offered $150 million from the sale of Turner Field to the Hawks just in case they ever threaten to move anywhere.)

But about that: On Tuesday night, after the latest closed-door council session, the Tustin city manager emerged to say that his city would also like to be paid fair value for any stadium land, thank you very much:

In Anaheim, an appraiser valued the land in question at $225 million. Parker said the Tustin land could be worth a similar amount and said the city would expect to make back that amount on any land provided to the Angels, most likely from lease payments or a share of development profits.

"We want to protect that $200 million," Parker said. "We want a rate of return on that land value."

While it may seem strange to see two neighboring cities playing hot potato with a pro baseball team, it actually makes some sense from a purely economic perspective: Whichever city ends up without the Angels gets to use the land for something more lucrative than a stadium that's dark most of the year, while residents still get to cheer on the Angels, albeit a few miles away. The "winner," meanwhile, gets stuck with the bills, and in the Angels' case, doesn't even get the glory of seeing their name on the telly. (Yes, there are some new taxes that flow from having a sports team in your town, but they pale in comparison to a nine-digit land giveaway.)

What happens next is a bit unclear. While Moreno has played most of his cards for now, he can always wait for someone to change their mind, or for another suitor to show up. While it would be crazy to abandon an MLB-approved slice of the nation's second-biggest market—especially one that just gifted him with a $3 billion cable deal—there could always be more Tustins where Tustin came from. Or Moreno could try another time-honored gambit: waiting it out until a more amenable government comes into office. After all, Tait isn't going to be mayor forever—in fact, he may not be mayor past January if he loses the upcoming election to council member Lucille Kring, who last week publicly accused Tait of risking a repeat of the Dodgers leaving Brooklyn in order to "make a quick buck on more generic development."

For now, though, it's Moreno's turn at bat, and he's down 0-2. Turns out that savvy negotiators can play for either side.

*The original version of this article referred to a planet, not a place name in the Star Wars Universe. In fact, Fort Tusken, which sounds like Tustin, is located on Tatooine, Luke Skywalker's home planet. VICE Sports regrets this error. All staff editors take full responsibility and will re-watch Star Wars this weekend to ensure such errors are never repeated.

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