Anaheim won’t be selling Angel Stadium in the near future, after the City Council voted late Tuesday to cancel the sale to Angel’s owner Arte Moreno’s company, which had plans to develop thousands of homes, shops, hotels and offices on the 150-acre site.

It took more than two years to put the deal together, but it collapsed in a matter of days when it became public that Anaheim Mayor Harry Sidhu – who resigned from office Monday – is under federal investigation for alleged corruption, part of it in connection with the stadium negotiations he spearheaded.

Before they met Tuesday, council members were under pressure from the buyer, Moreno’s SRB Management, whose lawyer sent a letter late last week demanding the city close escrow on the sale by June 14.

Last night, they listened to a parade of dozens of residents urging them to cancel the “tainted” sale, to launch independent investigations of council members and staff to learn who knew what, and to review any contracts with council campaign donors, including the Anaheim Chamber of Commerce, whose former CEO was arrested last week in an investigation that appears tied to the FBI’s probe of Sidhu and paints a picture of a cabal of business and political leaders that’s been influential in Anaheim politics.

One speaker called the $320 million deal “one of the biggest giveaways of public land to a luxury developer in our city’s history,” and another said, “I don’t see how you could possibly move forward” with the deal after the recent revelations.

Council members seemed to agree the stadium sale was no longer viable in its current form.

If the city does “a do-over,” Councilman Steve Faessel said it should be after current council members are no longer in office.

The residents he’s heard wanted the city to exit the deal, and it’s “going to be litigated for the next several years anyway,” Faessel said. “I think we all need to consider that this needs a fresh start by fresh faces.”

Some in the community, including Councilman Jose Moreno – whom the crowd cheered as a hero Tuesday night – have raised questions and objections from the start about whether the deal was slanted toward the buyer’s interests at the expense of city taxpayers.

But city leaders insisted the sale was fairly negotiated and would greatly benefit Anaheim, and it seemed on track to completion – until news of the Sidhu investigation broke. In an affidavit filed with the court, an FBI agent said based on recorded conversations, emails and interviews with witnesses, he believed Sidhu tried to pass confidential city information to Angels representatives to help them in negotiations, and he hoped in return to get at least $1 million to support his reelection.

Sidhu has not been charged with a crime, and his attorney issued a statement Monday saying that a fair investigation would prove Sidhu didn’t leak secret information and “never asked for a political campaign contribution that was linked in any way to the negotiation process.”

The affidavit says the FBI has no information confirming that Sidhu solicited an (unnamed) Angels representative for campaign contributions, but city officials will be looking closely at what occurred for any legal grounds to void the deal and minimize the city’s liability.

Councilman Avelino Valencia, who wasn’t on the council when it made the decision to sell, said Tuesday that he didn’t appreciate the buyer’s demand that the city finish the deal, particularly since he has a responsibility to do what’s in the best interest of Anaheim residents.

“This deal in my opinion just can’t move forward,” he said.

SRB Management spokeswoman Marie Garvey said Wednesday morning, “We are disappointed by Anaheim City Council’s action last night regarding the stadium land sale.

“Since the beginning we have negotiated in good faith which resulted in a fair deal,” she said. “We are currently exploring all of our options.”

City spokesman Mike Lyster said Wednesday the city will ask a court to rule on whether the city has grounds to void the deal and not have to potentially pay SRB a penalty of up to $5 million, as the sale agreement provides if the seller defaults.

“In light of the concerns raised,” he said, “it is our position that it should just be voided or basically annulled.”

Please check back later today as we develop this story further.

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