Toll Bros. lost the first battle for San Diego’s sports arena site. Now it’s mounting a comeback

A rendering of Midway Village+
A rendering of Midway Village+ depicts an expansive project with apartment and commercial buildings lining the periphery of the site, a new sports arena in the center and a 12-acre public park. On the western edge, on a separate parcel, the development team would build a new home for the San Diego Loyal soccer team.
(Courtesy of AVRP Studios)
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The developer and partners are back with Midway Village+, a redevelopment plan that includes homes for people of all income levels, a 12-acre center park and a privately financed arena.

The do-over opportunity to redevelop one of the largest masses of available real estate in San Diego is shaping up to be the must-watch sporting event of the season as rival teams beef up their rosters and craft better playbooks. The game, a city-run competition for 48 acres around the sports arena in the Midway District, is going to be a long one — but that’s not stopping competitors from trying to elicit some early noise from the crowd.

Luxury housing builder Toll Bros. and partners have mounted a campaign for the freshly branded Midway Village+ plan.

The new strategy, which seeks to turn last year’s losing Toll Bros. bid into a winning one, is centered around homes for people of varying income levels, a large park and a forever facility for the San Diego Loyal soccer team. It’s amplified by the addition of a ringer in the entertainment realm that has promised to build a new arena on its own dime.

The Oct. 17 reveal came less than two weeks after the city of San Diego advertised that the sports arena parcels were back on the lease market and days after Brookfield Properties said it was ready to make an offer.

“We’re aspiring to do something that can be emblematic of where the city is going,” said David Malmuth, a San Diego-based development consultant and Midway Village+ project executive. “The Midway District is a blighted area. ... It sort of became the dumping ground for all the things that couldn’t go anyplace else — the strip clubs, the big box [stores] and the fast food. It’s one of the few places in San Diego where it feels like it could be Anywhere USA. Now there’s an opportunity to set a new standard.”

Conceptual drawings and a site plan depict an expansive project in six phases extending beyond the perimeter of the 48 acres currently on the market. It would cost untold billions and probably require a lot of luck to bring to life. Unlike last time, housing is at the heart of the plan.

The Midway Village+ park
The Midway Village+ development team envisions a 12-acre central park with a skate park, walking and biking baths and a stream.
(Courtesy of McCullough Landscape Architecture and AVRP Studios)

There will be a “substantial increase” in the proposed number of housing units, Malmuth said, though he did not disclose the exact number because he doesn’t want the competition to know the breakdown yet.

Last year, Toll Bros. tried to win the site with a vision of a sports and entertainment district that included 1,400 housing units. The proposal ultimately was bested by a bid from Brookfield, which promised 2,100 units and won over city officials.

The 2020 match-up turned out to be more of a scrimmage.

The city’s process, a conventional request-for-proposal solicitation, was invalidated by California’s Department of Housing and Community Development. The agency, tasked with enforcing a newly revised Surplus Land Act, said San Diego should have, among other things, given affordable-housing builders the right of first refusal.

The city’s second attempt to unload its real estate holdings started Oct. 4, when it published a notice of availability alerting affordable-housing developers registered with the state that it’s ready to lease out its parcels at 3500, 3250, 3220 and 3240 Sports Arena Blvd.

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Interested bidders must this time propose a redevelopment plan that sets aside at least 25 percent of proposed housing units for lower-income families.

The Toll Bros. team will meet the threshold with help from Midway Village+ master developer Bridge Housing, which is working alongside social services provider MAAC. The duo is responsible for the project’s affordable units, reserved for families making 30 percent to 80 percent of the area’s median income. New team member Waterford Property Co., which specializes in middle-income housing, has signed on to produce apartments for households earning 80 percent to 120 percent of the median income. Their collective contributions will make up more than half of all units on the site, Malmuth said.

The balance will be market-rate apartments. Toll Bros. is eyeing a cohesive neighborhood with buildings of varying size, shape and style around the periphery of the site.

“At the start of the project, the plan is viewed as one large project, but as you move forward the plan becomes a mosaic of different pieces, including the market-rate housing,” said Michael McCann, who leads development and acquisition for Toll Bros.’ Southern California division. “We’ll ensure that the design and execution is specific to subparts of this project and therefore appealing to a broad range of people. In other words, we will avoid at all cost one homogeneous set of market-rate apartments.”

A rendering of the Midway Village+ arena
A rendering of Midway Village+ shows the main entryway to the project’s proposed arena, which would be built and financed by Oak View Group. A separate event center and hotel are pictured in the background.
(Courtesy of McCullough Landscape Architecture and AVRP Studios)

In the center of Midway Village+, newly added master developer Oak View Group would build — and pay for — a $450 million-plus sports arena with 15,000 to 17,000 seats where the Los Angeles-based firm plans to book A-list entertainment acts year-round.

The company, started six years ago by ex-AEG Chief Executive Tim Leiweke and music mogul Irving Azoff, has already spent more than $5.5 billion in private capital on arena projects to date. Its first gamble, Climate Pledge Arena in Seattle, is set to open Friday, Oct. 22, and serve as the home of the National Hockey League’s newest expansion team, the Seattle Kraken.

“Our interest is really simple; we want to bring a new arena to San Diego. We don’t need any public subsidies. We’ll 100 percent privately finance it,” said Francesca Bodie, Oak View’s president of business development. “We will be carbon-neutral from Day 1. San Diego deserves a new world-class arena that can drive the kind of content that the community would love to see on a regular basis.”

The plan also calls for a hotel, shops, restaurants, office space, a skate park, biking and pedestrian paths and neighborhood schools. It even provides both a temporary and long-term home for the Loyal, San Diego’s team in the USL Championship soccer league. The club would start with a modular 12,000- to 15,000-seat stadium in Phase 1 and later move into a 20,000-seat venue on an adjacent city-owned parcel that the Toll Bros. group also would like to lease.

“We view what we’re doing as having the opportunity, really the responsibility, to try to not just become an economic catalyst [for the Midway District] but to demonstrate how to do density in a way that creates beautiful public spaces and a mix of uses that is much more pedestrian-friendly,” Malmuth said.

Toll Bros., Bridge and Oak View plan to finance their respective portions of the project and split costs associated with public amenities.

The Dec. 3 date to respond to the city’s notice of availability is more of a starting point than a finish line; the city is required to negotiate for three months with all qualified responders.

San Diego officials have said they plan to take proposals before the City Council next year before selecting a winner. That means Toll Bros. and Brookfield would duel once again.

The latter also is back with a reworked concept called Discover Midway that calls for a range of housing types, active parks and green space and a reimagined arena.

Another entity led by The ConAm Group, an apartment builder and property management company, also has entered the fray, though the specifics of its plan are not yet known.

Right now, there’s no scorecard that San Diego will use to evaluate proposals. The city must give priority to teams offering the greatest number of affordable units at the lowest average affordability level, and it has said it will consider only proposals with a new or refurbished arena.