San Diego’s sports arena site in Midway District is back on the market
Notice of availability starts the clock on a 60-day window for interested bidders to propose a redevelopment plan that sets aside at least 25 percent of proposed housing units for lower-income families.
The 48 acres of city-owned land near Pechanga Arena in the Midway District is again being advertised to would-be takers, albeit with the state now watching to ensure that San Diego adheres to a newly prescribed process for disposing of what’s considered surplus land.
The city published what’s called a notice of availability on Oct. 4, alerting affordable-housing developers registered with the state that the city is ready to lease out its parcels at 3500, 3250, 3220 and 3240 Sports Arena Blvd.
The action marks the official start of a second solicitation process. It also starts a 60-day countdown for interested bidders who must this time propose a redevelopment plan that sets aside at least 25 percent of proposed housing units for lower-income families.
“Issuing the notice of availability is an important first step as we restart this process to redevelop the Midway District and bring more affordable housing units online for San Diegans,” said Penny Maus, the city’s director of real estate and airport management.
The sports arena site is north of San Diego International Airport, south of Mission Bay and bounded by Kurtz Street on the north and Sports Arena Boulevard on the south. The property includes Pechanga Arena, the longtime home of the American Hockey League’s San Diego Gulls and the Major Arena Soccer League’s San
Diego Sockers. The 16,000-seat venue, which opened in 1966, hosted about 145 sports and entertainment events per year before the COVID-19 pandemic.
The site has been on and off the market since February 2020, when the city first went down a more traditional solicitation process that culminated with Brookfield Properties being picked to remake the property. The developer pitched an all-new sports arena, housing, parks and retail but made no formal commitment to build subsidized units.
Brookfield’s proposal was scrapped in June after California’s Department of Housing and Community Development said the city should have first offered the site to affordable-housing builders. The agency is charged with enforcing a recently amended Surplus Land Act, and, earlier this year, finalized its rule book for how to offload excess government-owned land that is offered for sale or lease.
The notice of availability is light on details and primarily highlights that the property is on the market with a few restrictions.
“The city of San Diego is providing notification that the city intends to lease the surplus property ... on the condition that future development of the property includes renovation or replacement of the city’s existing and operational current sports arena,” the three-page letter states. “The city encourages entities to incorporate development of as much affordable housing as possible in their proposals to the city.”
Otherwise, the document includes a table with high-level zoning information. The site allows for a total of 2,112 units, though a developer would be eligible to build double that amount, or 4,224, if the plan includes affordable units that are 600 to 800 square feet. It also states that building height requirements in the Midway District, which were eased by voters last year to allow for buildings taller than 30 feet, are being challenged in court.
Prospective bidders have 60 days to respond to the notice, meaning they have through Friday, Dec. 3, to submit a letter of interest. Then the city will negotiate during a 90-day period, likely starting Dec. 6, with parties that meet the notice’s requirements.
The state’s rubric for evaluating multiple proposals is open-ended, though the city must give priority to teams offering the greatest number of affordable units at the lowest average affordability level.
The selection process is expected to extend into the second half of 2022, as the city’s Land Use and Housing Committee and the full City Council are expected to weigh in on multiple proposals and recommend additional due diligence or public outreach.
Alternatively, if no deal can be reached, the city can solicit interest through a more standard request-for-proposals process that has fewer restrictions.