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Losing developer in battle to transform sports arena area criticizes selection process

A rendering depicts a new arena that could be part of redevelopment plans for San Diego's Midway District.
(Courtesy)

Toll Bros. and the San Diego Loyal soccer team question the transparency and consideration of public feedback. The city defends the process.

The battle between developers seeking to create an entertainment district on San Diego’s 48-acre sports arena site took a new turn this week when the losing development team raised concerns about how the city chose the winning team two weeks ago.

The losing team — which includes Toll Bros. housing developers and the San Diego Loyal soccer team — said the city’s process lacked transparency and didn’t give enough consideration to public feedback strongly favoring its proposal.

Mayor says the goal is a completely new arena to anchor a planned entertainment district.

The Toll Bros. team said it has no plans to file a formal protest or take legal action. But it said a lack of integrity by the city raised concerns that the process was designed with a certain outcome in mind.

City officials defended the process that led them to select Brookfield Properties and ASM Global, a development team with experience creating entertainment districts around arenas in Los Angeles, London and Berlin.

They said there is no merit to the losing team’s concerns about transparency or about the winning developer being predetermined. They also contended that public feedback was a factor in the city’s decision.

The city said this week that Brookfield narrowly outscored Toll Bros., 93.67 to 90.83, based on six criteria.

Brookfield outscored Toll Bros. on experience, finances and oral presentations. Toll Bros. scored higher for its proposed operating plan, responsiveness to the city’s request and the amount its proposal would serve the community, city officials said.

The Toll Bros. team complained shortly after the scores were revealed Sept. 9 that public feedback should have been a factor.

At a city-sponsored online open house this summer, 64 percent of people preferred the Toll Bros. proposal, 18 percent preferred Brookfield and 18 percent were undecided.

“They asked the public, ‘Tell us what you think,’ so when you ask that, I feel like you have a responsibility to listen,” said Warren Smith, president of the San Diego Loyal.

“I just assumed, and I think we all assumed, that public feedback was going to be included. For them to not use it is quite frustrating.”

He said that if public feedback had been even a small factor, it could have wiped out the scoring gap of just under three points, potentially giving Toll Bros. the edge.

While public feedback is not one of the six criteria listed in the scoring matrix, the city’s selection committee was made aware of the responses gathered at the online open house, said Erik Caldwell, a city deputy chief operating officer.

Caldwell also said that a section of the scoring matrix focused on how much each proposal would serve the community — which accounted for 10 percent of each development team’s score — was partly based on public feedback.

The Toll Bros. team said the description of that section indicates otherwise. The description says those points are based on “the proposer’s overall ability to best serve the needs of the public by providing the most benefits which are accessible to all community members and the general public, ” with no mention of community feedback.

The Toll Bros. team also raised concerns about the timing of the city’s release of the scores.

Before the scores were released, city officials rejected multiple requests from Toll Bros. to release them, citing public records laws and contending the city had no legal obligation.

The city then released them Sept. 9 — one day after the 10-day window closed to file a protest, Smith said.

“To release it the day after the 10-day period was up just doesn’t feel right,” he said, emphasizing that his team’s motive for seeking the scores was not to launch a protest.

“We would have had a really good conversation with them,” he said. “Sure, we would have challenged them and questioned them, but their decision is already made.”

Caldwell did not address the timing but said the city was not obligated to release the documents at all.

He cited a City Council policy that doesn’t require the documents to be released until after negotiations with the selected developer conclude. He also cited a state government code and a court ruling.

But he said Mayor Kevin Faulconer ultimately decided to release the documents.

“The mayor felt in this case it best to release the scoring and community feedback in the interest of full transparency,” Caldwell said.

Smith said a key reason his team would not have protested is Measure E, a November ballot measure that proposes to lift San Diego’s 30-foot height limit in a targeted area around the arena in the Midway District.

San Diego voters will get a chance in November to lift the city’s coastal 30-foot height limit for a relatively small swath of land that surrounds the aging sports arena property in the Midway District.

Smith said protesting the city’s selection of Brookfield could damage the prospects for the measure, which his team thinks is more important than the outcome of the battle between developers. The measure, if approved by a majority of voters, would allow construction of a completely new sports arena.

The greater public support for the Toll Bros. proposal was based primarily on it featuring more public amenities, including an amphitheater, a soccer stadium and a 12-acre public park.

Rival developers are proposing contrasting visions for the future of San Diego’s 48-acre sports arena property in an area that city officials hope to transform into a thriving entertainment district with dense housing projects.

But city officials have said the proposals were essentially rough drafts, with the details to be worked out during months of negotiations after a developer was chosen.

That process is now beginning with Brookfield and is expected to continue for about six months, with a final deal expected to be approved by a new mayor and a new City Council in early 2021.

“The city’s selection committee, including outside real estate experts, reviewed the bids and scored them based on who could deliver the best project for San Diego taxpayers,” Faulconer said Sept. 11. “This was a very competitive process, and both proposal teams should be commended for their efforts to breathe life into the Midway District.”

The Brookfield team declined to address the concerns raised by the Toll Bros. team.

“We are committed to a community-driven, collaborative process that reimagines and revitalizes this important property,” said Zach Adams, Brookfield’s vice president of development.


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