San Diego Land Use & Housing Committee Selects Midway Rising for Sports Arena Site (Sept 8, 2022)
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Land Use and Housing Committee Special Meeting – September 8, 2022
The Land Use and Housing Committee held a special meeting on Thursday, September 8, 2022, to consider the selection of a development team for the Midway Sports Arena site (approximately 48.5 acres in Council District 2). Vice Chair Joel LaCava chaired the meeting in Chair Moreno’s absence. The committee heard staff presentations, public testimony, and deliberations on the staff recommendation to select Midway Rising and authorize exclusive negotiations.
Consent Calendar
- The committee unanimously approved (3-0) the committee actions from August 3, 2022.
Public Comments & Testimony
- In-person and virtual speakers offered a range of positions. Many speakers expressed support for the mayor’s recommendation of Midway Rising, citing its 2,000 affordable housing units, privately financed 16,000-seat arena, 20+ acres of parks, job creation, and transparent process. Supporters included labor unions (IATSE Local 122, LiUNA Local 89, carpenters), community organizations (YMCA, Asian Pacific Islander Initiative, BayPack), affordable housing advocates (Chelsea Investment Corporation, Serving Seniors, San Diego Regional Center), and local residents and business owners.
- Opponents raised concerns about the lack of community outreach, potential conflicts of interest (campaign contributions), past lawsuits and liens against Midway Rising or its partners, the project’s consistency with the existing community plan and zoning (height and density exceedances), and the need for more thorough due diligence before moving forward. Speakers also noted the lack of an inclement weather shelter during the hurricane.
- Several speakers from other teams (Hometown SD, Midway Village Plus) urged the committee to not limit consideration to the number of affordable units alone, but to also evaluate viability, track record, and community fit.
Discussion Items
Midway Site Selection and Exclusive Negotiating Agreement
- Staff presentation (Jay Goldstone, Penny Moss, Lucy Contreras) outlined the process: a Notice of Availability (NOA) issued Oct 2021, five responses received, a 90-day good faith negotiation period, and shortlisting to three teams in April 2022. The city engaged JLL for financial analysis. Staff recommended Midway Rising because it proposed the most affordable units (2,000) at the close of the good-faith period, consistently maintained its proposal, and demonstrated capacity through reference checks and legal review. JLL’s Matt Doe confirmed the financial assumptions and strategies were reasonable at this conceptual stage, though significant unknowns remain.
- Midway Rising (Chelsea Investment Corp., Legends, Zephyr) presented a plan with 2,000 affordable units (largest of any proposer), average unit size 849 sq ft, a 16,000-seat arena, 20+ acres parks, and a community benefits framework. The team committed to a full project labor agreement and union labor.
- Hometown SD (Monarch Group, Essex, Eden Housing, JMI Sports) offered up to 1,475 affordable units after the good-faith period and later offered an additional 300, but these were not considered as they came after the deadline. Hometown SD emphasized its track record and resilience.
- Midway Village Plus (Bridge Housing, MAC, Toll Brothers, Revitate) proposed 1,500 affordable units with a faster delivery schedule and a focus on BIPOC-led developers and community integration.
- Committee questions focused on due diligence, past lawsuits, labor agreements, and project viability. Vice Chair LaCava pressed Midway Rising on its past business model, the role of Legends, and allegations regarding worker treatment. Chelsea and Legends responded, reaffirming commitments to union labor and project completion. JLL stated that no red flags were found regarding the team’s ability to deliver.
- Councilmember Kate noted the importance of consistency from start to finish and supported the staff recommendation. Councilmember Whitburn emphasized four essential components: 200 permanent supportive housing units, 2,000 affordable units, early phasing of affordable housing, and robust labor standards. He received confirmation that the council will have quarterly updates and a final vote after CEQA.
Key Outcomes
- Motion by Vice Chair LaCava to approve the staff recommendation (select Midway Rising and authorize exclusive negotiations) with the additional requirement that city staff provide quarterly informational updates to the city council. The motion was seconded by Councilmember Kate and passed 3-0 (Whitburn, Kate, LaCava).
- The vote is a recommendation to the full City Council, which will consider final approval on Tuesday, September 13, 2022. If approved, the city will enter a two-year exclusive negotiating agreement (ENA) with up to two one-year extensions at the city’s discretion. The ENA will not grant property rights; a development agreement and ground lease will be negotiated and brought back for council approval after CEQA.
- The committee noted that if the project’s components change during negotiations, the council’s assessment could change, and the city retains the right to walk away.
Meeting Transcript
To provide testimony via a call-in or internet-based service option, must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first. This will allow for better meeting management between the two platforms and ensure the council is able to manage and conduct city business. We appreciate the public's cooperation. I will now call the special meeting of the land use and housing committee of Thursday, September 8th, 2022 to order. Let me call the roll. Councilmember Whitburn. Here. Councilmember Kate. Chair Moreno, as you may see, is not present. I am Councilmember Joel Lacava, Vice Chair of Land Use and Housing Committee, and I'm honored to chair today's meeting in Chair Moreno's absence. We also have in attendance Jessica Lawrence with the mayor's office, Corinne Newfer with the City Attorney's Office, Jillian Cassie with the Independent Budget Analyst Office, and Kevin Smith, the land use and housing committee consultant. I want to thank my council colleagues, the mayor's office, and the city staff for participating in the special meeting of the committee. Mr. Smith will now go over some details regarding how the public can participate in this meeting. Thank you, Vice Chair Lakava. If you are attending in person and wish to speak on any items, please complete a speaker slip located at the entrance of the chambers and place it in the box indicated at the speaker's lectern at the front of the room. Please do so in a timely manner to ensure proper meeting management. Members of the public can join the webinar by computer, tablet, or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's web page. The link to join the committee meeting webinar by computer tablet or smartphone is listed on the agenda. To join the Zoom webinar by telephone, please dial 1669-254-5252. When prompted, input webinar ID 161-042-5337 pound. This information is also available on the agenda and will appear on the screen during the public comment period for each agenda item. Members of the public who wish to provide testimony via a call-in or an internet-based service option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first. Please note that if you are watching via City TV 24 or online, there may be a delay. Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. When the item you would like to comment on is introduced, please raise your hand by either tapping the raise your hand button on your computer, tablet or smartphone, or by pressing star nine on your phone. You'll be taken in the order in which you raise your hand. You may only speak once on a particular item. When I indicate it is your turn to speak, I will call you by your name as it appears on the Zoom webinar attendee list, or I will read out the last four digits of your phone number if you have called into the meeting. That is how you will know it is your turn to speak. If you are in person, please come up to the reserve seats at the front of the room when your name is called and be prepared to come up to the lectern in the order called. If you have joined the webinar by computer, tablet, or smartphone, you will receive a pop-up notice to select to unmute your device. If you have called into the meeting by cell phone or landline, press star six on the phone to unmute yourself. We will we will review these instructions briefly again when the public comment period on an item is open. Please wait until the item you wish to speak to has been called before raising your hand to speak. If you raise your hand during a non-comment period, your hand will be lowered. When you are announced as the next speaker, please unmute yourself and offer your comments. Also, please mute the volume on your TV or computer before you begin to speak. Thank you, Ms. Smith. A quorum is now present. We will now take up the approval of the committee actions of August 3rd, 2022. Mr. Smith, please proceed with public comment on this item. Thank you, Vice Chair Lakava. The public comment period for this item is now open. If you are attending in person, please be sure to have your speaker slips submitted and come up to the reserve seats at the front of the room when your name is called and be prepared to come up to the lectern in the order called. Members of the public who wish to provide testimony via a call-in or an internet-based service option must enter the virtual speaking queue within five minutes after the conclusion of an in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first. If you have already joined the Zoom webinar online or by phone, please raise your hand if you wish to speak. If you are watching on City TV or the live stream online and would like to call into the meeting to speak, please call 1669-254-5252 when prompted.
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