San Diego forced to end plans for new arena

San Diego Mayor Todd Gloria has hit out at the administration led by his predecessor, Kevin Faulconer, after being forced to scrap plans for a new arena.

Gloria announced yesterday (Thursday) that the City of San Diego received notice from the State of California that the proposed sports arena development is likely in violation of the Surplus Land Act (SLA).

Gloria said he has now committed to expeditiously beginning a new bid process for the sports arena site that prioritises affordable housing and complies with state law. He added in a statement: “This is yet another example of a flawed real estate deal from the previous administration where San Diegans are now left with little to show for a significant investment of time and resources.

“I am committed to work quickly to restart this process in compliance with the Surplus Land Act. It is critical that we do not squander this once-in-a-generation opportunity to build a modern arena through a process that prioritises the affordable housing our region desperately needs.”

In August, the City of San Diego selected real estate company Brookfield Properties and venue management and services firm ASM Global to develop a multi-use district anchored by a new sports arena.

The project was set to see Pechanga Arena, which first opened in 1966, replaced by the new venue, accompanied by a mix of entertainment, housing, parks, and office and retail. The announcement came after a selection committee reviewed and scored two responsive bids to a Request for Proposals (RFP) that was issued in February 2020.

The rival proposal came from a development team led by Toll Brothers Housing. That project envisioned the development of an ampitheatre, a new stadium for United Soccer League (USL) club San Diego Loyal and a large public park.

After the State Department of Housing and Community Development (HCD) released its final guidelines for the SLA in April, the City of San Diego requested a review of the sports arena development plan. HCD’s letter stated that it had concluded that the City may be in violation of the SLA because it did not properly follow the act’s declaration and noticing procedures.

In the letter delivered to the city, and obtained by the San Diego Union-Tribune, HCD highlighted three areas where San Diego failed to comply with state law. These were that the City did not make a formal declaration as to whether the property was surplus land or exempt surplus land, and it did not properly advertise the availability of the property. The proposed project also did not include enough affordable housing units.

“Brookfield Properties has expended significant time and efforts in good faith on this opportunity, so this latest development is disappointing, but we are looking ahead to the next steps,” said Ted Lohman, vice-president of mixed-use development at Brookfield Properties.

Aimee Faucett, Faulconer’s former Chief of Staff, told local broadcaster NBC 7 that government regulations were at fault for the plan’s failure. Faucett said: “All decisions made by Mayor Faulconer’s administration on the arena’s redevelopment were done in direct consultation with the city attorney’s office.

“This is another example of California’s state government regulations making it harder for communities to undertake major developments. The state released its guidelines for the Surplus Land Act in November 2020, after the invitation to redevelop the sports arena site, after a winning bidder was selected and after Measure E was passed, lifting the height limit. San Diego deserves a world-class sports arena along with all of the economic benefits that come with it.”

Gloria said he intends to bring an item before the City Council next month to restart the process. The sports arena redevelopment site encompasses approximately 48 acres in the Midway-Pacific Highway Community area.

In 2010, the City and local community members began updating the Midway-Pacific Highway Community Plan, which serves as a blueprint for the future development of the neighbourhood. The plan envisions the Sports Arena Community Village, which would incorporate a mix of entertainment, office, retail, residential, public and park uses.

Image: Brookfield Properties