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Midway Rising stands to win race to rebuild San Diego sports arena site

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A major real estate race involving San Diego’s 48-acre sports arena site is nearing the finish line as city representatives signal their intent to crown the development team that proposes the most affordable housing unit as the winner .

On Thursday, the San Diego City Council Land Use and Housing Commission announced a staff proposal to select Midway Rising over challenger Hometown SD and Midway Village+ to rent and redo properties in the Midway area. voted unanimously in favor of

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Preliminary action began on Tuesday with market-value housing developer Zephyr, sports and entertainment operator Legend, and affordable home builder Chelsea. Decide whether to move forward exclusively with the development team, which includes Investment Corp. .

The final decision to go ahead with Midway Rising concludes a nearly year-long contest, giving the city and developers two years to develop the site and refine the terms of its lease.

Midway Rising, one of three finalists, is proposing to develop the city’s sports arena property. Residential units are restricted to low and ultra-low income residents. That means 2,000 units at an average affordable price of 48% of the regional median income. .

“A lot is at stake. And for me, it’s about choosing partners for this ambitious plan and fostering public confidence that the city can and will do real estate transactions.” said Joe LaCaba, vice chairman of the committee.

After encouraging the executives and staff of real estate consultant Jones Lange LaSalle, LaCava created a motion to accept staff endorsements that constitute endorsements from Mayor Todd Gloria. A Midway Rising representative who asked a series of questions he characterized as “uncomfortable”. Council members have alluded to media reports and behind-closed-door conversations that suggest Zephyr is incapable of building his 2,000 market-rate units of the project and may stay away from past lawsuits. rice field. Allegations related to Chelsea’s labor practices and treatment of construction workers were also discussed.

“The mayor, mayor’s office, and consultants JLL have done their job at this stage of the game. Claims made by various resources turned out to be unsubstantiated,” LaCava said. I’m here.

But members of the council said that if developers pulled the “bait and switch,” they wouldn’t hesitate to “pull the plug.” His motion to approve the recommendations also included a warning that the staff would return quarterly updates on the negotiations to the committee.

In addition to affordable units, Midway Rising plans also call for 250 middle-income units, 2,000 market-rate units, a brand-new 16,000-seat arena, 200-room hotel, and 4,500 parking spaces. . The project includes 20 acres of open space and park space, including a 4.2-acre rooftop park.

The cost of the project is not disclosed, but the group is seeking minimal financial assistance from the city, according to an evaluation conducted by the city’s real estate consultant JLL.

“Midway Rising has voted to move forward based on a recommendation of city officials for consideration by Mayor Gloria and the City Council,” Shelby Jordan, project manager for Legend, said in a statement. Thank you to the Commission.”We have 2,000 affordable homes, 20+ acres of new parks, 8,500 jobs for working families, and modern sports for all San Diegans.” We are committed to providing an inclusive and economically vibrant community, including the arena.”

Affordable housing has played a huge role in the competition. This is by design, with the newly amended Surplus Land Act and the state’s interest in making excess government-owned land available for affordable housing.

San Diego was forced to drop its first attempt to dispose of lands at 3220, 3240, 3250, and 3500 Sports Arena Blvd. After learning that the process, a more traditional soliciting process, was against the law.

The city has 90 days of “good faith” negotiations with responding applicants, beginning with formally declaring a “surplus” of land and including warning state-registered affordable home builders. We are required by law to follow a prescribed disposal process, which requires a period of time. San Diego must also “first prioritize” bidders with the highest number of affordable housing units per the statutes and guidelines produced by the oversight agency, the California Department of Housing and Community Development.

The city’s second attempt to dispose of the sports arena grounds so far has followed adequately the state’s surplus land disposal process, state officials said this week.

Penny Mouse, who runs the city’s real estate department, said, “We are pleased that the Land Use and Housing Commission unanimously proposed on Tuesday that the staff’s recommendations be submitted to the city council.” (the Surplus Land Act) and has demonstrated a deep understanding of the city’s priorities in creating more affordable housing since the inception of this process, and has demonstrated that it will be an excellent partner in this exciting project. I have.”

Critics of the current process say the city puts too much emphasis on one factor.

“Obviously, the focus is solely on[affordable housing]. That’s not the way to build a new development that takes up so much space in a very important part of San Diego.” Ocean The Beach Planning Commission said in public testimony, citing unknowns related to traffic and transport impacts. We urge the City Council to take a more holistic approach when making decisions.”

Others have questioned the city’s due diligence and warned of future implications.

Matt Wallstrom, chairman of the Uptown Planners Group, told committee members in public testimony, “This proposal is worse than 101 Ash Street because it “So the question you need to ask yourself today is, ‘Which side of the fan do you want to be on when your excrement hits it?’ “about it.”

San Diego Chief Operating Officer Jay Goldstone has tried to silence criticism of Midway Rising principals.

“I think I have heard several teams say negative things about the competition or raise certain allegations, ranging from previous or current lawsuits to their ability to execute. “It’s possible,” Goldstone told the committee. I’ve heard similar things with many other development deals I’ve been involved with throughout my career, and they rarely succeed,” he said. “That said, the allegations and allegations made to the staff were followed up and nothing was learned that raised the level of concern leading the staff to change their recommendations.”

With affordable housing being the deciding factor, Monarch Group’s HomeTownSD and Toll Brothers Housing’s Midway Village+ have tried to increase that number in recent weeks and months. Midway Village+ has increased the number of proposed affordable units from 1,610 to 1,780 after a 90-day “good faith” negotiation period. HomeTownSD also sought to add at least 300 more affordable units to the total of 1,726 units submitted, but the request came too late after JLL finished its work, the city said.

The City Council will consider the staff’s proposal and will select Midway Rising to lease the sports arena site and start over on September 13th.