Sports Arena Redevelopment Scrapped, Gloria to Restart Bidding

The state concluded the city of San Diego may be in violation of the SLA because it did not properly follow the act's declaration and noticing procedures

sports arena area redevelopment
ASM Global

San Diego's long-in-the-works redevelopment of the Sports Arena area in the Midway District is back to square one after the city was told it may be out of compliance with California law.

The city received notice from the state that the proposed development is likely in violation of the Surplus Land Act, prompting Mayor Todd Gloria to announce Thursday that he intends to begin a new bid process for the site prioritizing affordable housing and complying with the law.

In a statement issued Thursday, Gloria blamed the previous mayoral administration for the "flawed real estate deal" that left San Diegans "with little to show for a significant investment of time and resources."

Then-mayor Kevin Faulconer announced last August that Brookfield Housing and ASM Global were chosen to build an entertainment district in the Midway area -- including a new arena, thousands of housing units, park space and retail businesses, a $1 billion job.

Aimee Faucett, Faulconer's former chief of staff, said government regulations were at fault for the plan's failure -- as did the mayor's former communications manager in a thread on Twitter.

"All decisions made by Mayor Faulconer's administration on the arena's redevelopment were done in direct consultation with the city attorney’s office. This is another example of California's state government regulations making it harder for communities to undertake major developments," Faucett said in a written statement sent to NBC 7. "The state released its guidelines for the Surplus Land Act in November 2020, after the invitation to redevelop the Sports Arena site, after a winning bidder was selected and after Measure E was passed, lifting the height limit. San Diego deserves a world-class sports arena along with all of the economic benefits that come with it."

The SLA was updated in 2019 via an executive order signed by Gov. Gavin Newsom to ensure that developments on excess state land included affordable housing. The law took effect in January 2020, with draft guidelines issued in the months prior alerting local agencies that they must submit notices of their surplus land, according to the state.

In April 2021, the state department of housing and community development finalized its guidelines for the Surplus Land Act. That's when the city now led by Gloria -- requested a review of the Sports Arena development plan. HCD concluded the city may be in violation of the SLA because it did not properly follow the act's declaration and noticing procedures.

"I am committed to work quickly to restart this process in compliance with the Surplus Land Act,'' Gloria said. "It is critical that we do not squander this once-in-a-generation opportunity to build a modern arena through a process that prioritizes the affordable housing our region desperately needs."

Gloria intends to bring an item before the city council next month to restart the process.

The Sports Arena redevelopment area encompasses about 48 acres in the Midway-Pacific Highway Community area. In 2010, the city and local community members began updating the Midway-Pacific Highway Community Plan, which serves as a blueprint for the future development of the neighborhood. The plan envisioned is the Sports Arena Community Village, which would incorporate a mix of entertainment, office, retail, residential, public and park uses.

Brookfield Housing developed and operate venues like Staples Center in Los Angeles and The O2 in London. ASM Global is the venue management company that currently operates Pechanga Arena San Diego (formerly known as the Sports Arena).

The redevelopment was to include a 5-acre park and public recreation space with transit links to local beaches and neighborhoods, at least 2,100 residential units, nearly 600,000 square feet of commercial and retail space and the addition of 1,800-2,100 parking spaces for residential/mixed use and 3,000-5,400 spaces for commercial/arena use.

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