2024-128 City of Anaheim’s Lease Agreement with Angels Ownership
Unclear Terms Have Hindered the City From Ensuring That Its Own Stadium Is Properly Maintained, While Revenue Sharing Provides Limited Funding
Published: March 27, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
City of Anaheim
Recommendation 1
To protect its interests in the future, Anaheim should ensure that future lease agreements regarding a city-owned stadium include clear language in the following areas:
- Anaheim’s right to inspect the stadium periodically for any reason.
- The party responsible for maintenance and repairs, the specific systems covered and exempt, what constitutes normal wear and tear, and what condition Anaheim expects the stadium to be in at the end of the lease.
- Treatment of any funds spent in excess of the capital reserve fund at the end of the lease.
It may also be in Anaheim’s best interest to include the following in its future agreements:
- No option for the tenant to terminate the lease early without cause.
- A continuation of base rent for the duration of the lease, including extension periods.
- A requirement for periodic stadium inspection reports by an independent third party.
- The city’s right to use the stadium for its own events.
Agency response status:
pending
Recommendation 2
To ensure that the stadium is in good condition and repair, and that Angels ownership is completing required maintenance and repair tasks, Anaheim should do the following:
- Negotiate with Angels ownership or seek to obtain a court order allowing it to perform physical inspections of the stadium on an annual or bi-annual basis to verify its condition and to verify the maintenance Angels ownership has performed or needs to perform. Anaheim should post on its public website the results of such inspections to the extent the reports are not privileged or otherwise confidential.
Agency response status:
pending
Recommendation 3
To ensure that Anaheim is receiving the revenue to which it is entitled, it should use its right to audit Angels ownership to obtain and review ownership’s records every year . At a minimum, the review should include verifying key information used to calculate revenue from ticket sales, parking, and other events. The review should also include verifying, through physical inspections, if possible, that claimed work was performed. Anaheim should supplement these basic reviews with a complete audit of Angels ownership’s compliance with the lease agreement every three to four years. If Anaheim’s internal audit department is unable to perform the reviews at this frequency, Anaheim should contract with an external party to perform them.
Agency response status:
pending
Recommendation 4
To ensure that it is aware of how the stadium is being used, and to better track annual revenue, Anaheim should obtain from Angels ownership, or other sources, if necessary, a list of non-baseball events happening at the stadium and their anticipated attendance, parking, and revenue. It should use this information to inform its reviews of revenue that Angels ownership provides each year.
Agency response status:
pending
