California Construction News staff writer
A $4.2-billion redevelopment of San Diego’s Sports Arena site is heading to the full City Council next month for consideration after receiving unanimous support from the Land Use and Housing Committee.
The Midway Rising proposal would transform the 48.5-acre site into a mixed-use neighbourhood with 4,250 homes, a 16,000-seat entertainment centre, 14.5 acres of parks and public spaces, and 130,000 sq. ft.of shops and restaurants.
The project includes 2,000 affordable homes, with an average affordability level not exceeding 60 per cent of area median income, including at least 200 permanent supportive housing units. Another approximately 2,250 apartments would be offered at market rates.
If approved, it would be the largest affordable housing project in California history, according to the city. Construction would take place in multiple phases over several years.
The proposal includes $460 million in on and off-site public infrastructure improvements, including roads, utilities, stormwater infrastructure, bicycle paths and transit facilities. The improvements would be provided at no upfront cost to the city.
“Today’s advancement of Midway Rising brings us one step closer to delivering a vibrant and revitalized Midway region with significant public benefit to the City of San Diego, two thousand units of new affordable housing, upfront public infrastructure investments, thousands of local jobs, and over $1 billion of potential future revenues, all while retaining public land,” said Land Use and Housing Committee Chair Kent Lee.
The proposal includes a Disposition and Development Agreement establishing the framework for the redevelopment, along with plans to create an Enhanced Infrastructure Financing District to help fund public infrastructure.
Rather than relying on a single agreement for the entire project, the city is proposing a combination of leases and transactions to establish financial, legal and operational requirements. The arrangements are intended to provide long-term municipal oversight and ensure development obligations and milestones are met.
The development team includes Chelsea Investment Corporation, an affordable housing developer; Legends, a sports venue developer and operator; Zephyr, a market-rate housing developer; and equity investor The Kroenke Group.
Midway Rising was selected in 2022 from five competing proposals after offering the largest number of affordable homes and demonstrating development experience and financial capabilities.
The new entertainment centre would replace the existing Pechanga Arena, which seats approximately 12,000 people. Demolition of the current arena would not begin until the replacement facility is built and ready to open, allowing scheduled events to continue without interruption.
The development team has held more than 70 outreach events and meetings, including workshops in each council district, to gather public input.
The full City Council is expected to consider the proposal in early November. Recent state legislation signed by Gov. Gavin Newsom is intended to facilitate redevelopment of the site while preserving environmental review under the California Environmental Quality Act.
