San Diego Mayor Todd Gloria on Monday announced his preferred redevelopment plan for the city-owned 48-acre Sports Arena property: Midway Rising.
The announcement was not a surprise, given that Midway Rising ranked first among five contenders when city staff last updated the City Council on the project in the spring. Officials credit the development team with offering the most low-income affordable housing, which state law requires the city to prioritize when redeveloping public land.
“After a transparent process in accordance with state regulations, I am confident Midway Rising will deliver on my vision of creating thousands of new affordable and middle-income homes, good-paying local jobs, and a new world-class arena and entertainment district, Gloria said in a statement. “This project represents big-city energy and I look forward to getting this done for the Midway community and our city.”
Midway Rising would build 4,250 apartments — 2,000 of them with restricted rents affordable to low-income households. Another 250 homes would be affordable to middle-income households while the remaining 2,000 would charge the market rate.
Also included in the plan are a new arena with capacity for up to 16,500 people, a 200-room hotel, 250,000 square feet of retail space and 20 acres of parks and open space.
Gloria plans on presenting his recommendation to the council’s Land Use and Housing Committee on Sept. 8, followed by a vote of the full council on Sept. 13. He pledged to release “all supporting documents” relating to the redevelopment plan by Friday.
If the council approves Midway Rising, city officials will still have to negotiate more details with the development team led by Encinitas-based Zephyr. Also on the team are affordable-housing developer Chelsea Investment Corp. and Legends, which built the SoFi Stadium home to the Los Angeles Rams and Chargers.
Key details yet to be determined include how much revenue the city will gain from the project and how the affordable housing will be financed. Some council members expressed a desire to see the development team shoulder the cost of building the affordable housing, although that would likely require the city to forgo revenue resulting from the property’s ground lease.
State officials last year forced the city to scrap a previous redevelopment plan selected by former Mayor Kevin Faulconer because the city did not follow the Surplus Land Act. That law, updated in 2019, requires local governments to offer surplus land to affordable housing developers first. It also requires cities to prioritize projects with the most affordable housing, although cities can still reject those projects if they can’t provide fair market value for the land.
Hanging over the redevelopment plans is the city’s 30-foot height limit on new buildings outside of downtown and west of the Interstate 5 freeway. None of the proposals would be feasible under the height limit.
San Diegans voted to exempt the Midway District from the height limit in 2020, but the measure has been tied up in a lawsuit. A revote on the height limit exemption is set to appear on the November ballot as Measure C.