LA Angels face trouble at home after state audit reveals imbalance in stadium lease with Anaheim

SACRAMENTO, Calif. (CN) — The L.A. Angels could face legal action after a report by the California State Auditor Thursday revealed multiple inequalities in the baseball team’s stadium lease with the City of Anaheim — inequalities that the city is considering taking to court.

After an urgent audit, the state concluded that though the team’s ownership didn’t violate the terms of its lease agreement with the city, the agreement lacks several important features common to other MLB teams’ leases, including the right of the city to inspect its own stadium for maintenance reasons.

“We found that the lease agreement does not clearly provide Anaheim with a right to inspect its publicly-owned stadium to verify its upkeep and maintenance, and the terms do not require any public reporting of the stadium’s physical condition or deferred maintenance,” California state auditor Grant Parks said in the report released on baseball’s Opening Day.

The state similarly criticized the lease’s revenue-sharing provisions for parking and ticket sales, which have netted the city only $415,000 over the last 28 years.

Parks also detailed squabbles between the city and the team over its owners’ use of a shared repairs and improvement fund; the team has overspent by $35.6 million.

The owners claims that the city will owe them any excess spending at the end of their lease, but the city called the notion “meritless.”

“If Angels ownership continues to make these claims, Anaheim will need to negotiate an agreement to address them, or face the possibility of litigation,” Parks said.

Anaheim City Manager Jim Vanderpool in a letter agreed with the state auditor’s recommendation that the city should have access to the stadium for periodic inspections “either via negotiation or court order.”

When asked if it was prepared for possible litigation by the city, a spokesperson for the Angels offered a vague statement.

“The Angels have and will continue to invest millions in the stadium to enhance the fan experience,” L.A. Angels Spokeswoman Marie Garvey told Courthouse News via email.

Angel Stadium has been home to the Angels since it opened in 1966. The city of Anaheim owns the ballpark and leases the stadium and land around it to the team.

Under a 1996 lease, the Angels were responsible for keeping the stadium in “good condition and repair” and ensuring it remained “at least equal to first class professional baseball stadiums” at the team’s expense. The city would also chip in $700,000 annually and receive a portion of ticket sales.

During the original negotiations, generating revenue for the state was not a priority, according to Anaheim officials.

The lease audit came at the request of Gregg Hart, a Los Angeles Democrat and chair of the Joint Legislative Audit Committee, and upon the recommendation of other lawmakers.

“There is deep concern, that the Angels have not been faithful or compliant to their end of the agreement and have been taking steps to shirk responsibility in maintenance,” said California Senator Thomas J. Umberg and Assemblymember Avelino Valencia in a public letter to Hart last August.

Anaheim has had problems in recent years accessing the stadium for maintenance. The report states the city regularly spends months negotiating an access agreement with Angels ownership each time it wants to inspect the stadium, creating incredible barriers for check-ups. In coming up with their recommendations, auditors compared the Angels’ lease agreement with Anaheim to the ones between San Diego and the Padres; San Francisco and the Giants; and Santa Clara and the 49ers.

Negotiating a new lease agreement could prove tricky for Anaheim, however. Neither party has the power to terminate the lease without cause until 2032. Anaheim also can’t refuse any lease renewals, should the Angels’ owners choose to exercise them, unless the team violates its lease.

According to the report, Vanderpool, the city manager, said no negotiations are underway for a new lease agreement. The state recommended that the city start the process — or get a court order allowing it to inspect the stadium for regular upkeep. State auditors also said Anaheim should exercise its right to conduct an annual audit of the ownership’s records to make sure it is receiving “the appropriate revenue.”

The Angels could stay in the stadium until 2038 under their current lease: It expires in 2029, but the team has the option to extend it for up to three terms of three years each. In February 2025, the team extended the term through 2032. It has until Dec. 31, 2031, to notify Anaheim if it wants to extend the lease for a second three-year term.