San Diego Extends Deadline for Midway Rising

San Diego has given the Midway Rising development team a one-year extension to finalize a deal for a redo of the city’s 48-acre sports arena site into a mixed-use project, which includes 4,250 residential units.

In 2022, the city selected a partnership between market-rate housing developer Zephyr, affordable housing builder Chelsea Investment Corp. and sports-and-entertainment venue operator Legends to redevelop the Midway District site that features the aging Pechanga Arena San Diego.

The Kroenke Group, a real estate firm owned Stan Kroenke, the billionaire owner of the LA Rams NFL franchise, in June 2023 acquired a 90% ownership stake in the development, known as Midway Rising.

The developers have pledged to designate 2,000 housing units in the project as affordable for households earning 80% or less than the area’s median income. In addition to new housing, the Midway Rising plans include a 16,000-seat replacement arena and 130K SF of commercial space flanked by parks, plazas and public space.

The exclusive negotiation agreement (ENA) for Midway Rising, originally set to expire in this December, has been extended for another year until Dec. 5, 2025, at the request of the developers, the city disclosed this month, the San Diego Union-Tribune reported.

The one-year extension will give the parties extra time to negotiate a long-term ground lease and complete an environmental assessment required by California’s Environmental Quality Act (CEQA), the report said.

The city is taking steps to establish an Enhanced Infrastructure Financing District (EIFD) in the Midway District including the city-owned property on Sports Arena Boulevard. An EIFD facilitates the financing of public infrastructure by allowing borrowing against the tax revenue a project eventually will generate.

The City Council voted in March to explore the formation of an EIFD. This summer, the city hired real estate adviser Keyser Marston Associates (KMA) to study the special district proposal. KMA also served as the city’s financial advisor during the formation of the Otay Mesa EIFD in 2017.

Regarding the one-year extension of the ENA negotiations for Midway Rising, Christina Bibler, who oversees the city’s real estate division, told the Union-Tribune that “there are delays on both sides in terms of going through our various processes.”

“Ours was procurement and contracting for getting our consultant on board [to analyze the EIFD] and theirs was finalizing their specific plan and going through development services for certainty as to the development footprint,” she said.

Bibler said she expects the parties to finalize a negotiated agreement for Midway Rising by the end of June 2025, when it will be presented to the City Council for approval.