Trivia Question: How many acres approximately is Chavez Ravine?
Trivia Question: Does Frank McCourt still own 130 acres?
Former Dodger owner Frank McCourt still owns ½ of the parking lot at Dodger Stadium. He retained the land when he sold the Dodgers, the Stadium and the other 130 acres to Magic Johnson and Guggenheim Baseball.
Yes, after the 2 billion dollar sale for the team and stadium and $150 million dollar sale for ½ of the parking lot, he still owns 130 acres of the 260 or so acre facility. How can this be you ask? Because he hired some smart lawyers who understand Proposition 13.
Most people know Prop. 13 as the Prop that keeps their property tax base pretty low provided there is no change in ownership. Well, in the Dodger’s case, Frank McCourt was permitted to keep 50% of the property because by doing so, property taxes would remain real low. No change in ownership would occur that would trigger a property tax reassessment. The reason no change in ownership occurred is because the transfer of interest did not rise above 50%. So, the Dodgers pay property taxes based on 2004 trended values not 2012.
So, half of the value of the real estate in 2004 when McCourt purchased was $20.5 million. He sold half in 2012 for $150 million. We could get more detailed here, but basically, by allowing McCourt to stay on board, the new Dodger’s ownership saves approximately $2,000,000 a year in property taxes while not having to come up with an additional $150,000,000 to purchase the Dodgers. Considering they only came in with $375,000,000 down, that additional $150 million was probably a big factor.
McCourt is now in a joint venture with the group who purchased the Dodgers. He manages the parking lots and is paid 1% of the JV assets ($600,000,000???) to do so. In addition, he makes about $7 million a year renting his half of the lot to the Dodgers. He also enjoys a free luxury suite as long as Guggenheim is an investor.
If that is not enough, he has the right to sell his 130 acres to Guggenheim for $150 million or he can buy back part of the land to build a sports venue on it. (I got these last bits from a Forbes article written by Mike Ozanian if you want to read more.)