New Group Emerges to Bid on Sports Arena Redevelopment

by on December 2, 2021 · 6 comments

in Ocean Beach, San Diego

By Jennifer Van Grove / San Diego Union-Tribune / Dec. 2, 2021

A new team emphasizing strong ties to San Diego has surfaced in the do-over competition to remake the 48 acres of city-owned land near Pechanga Arena San Diego in the Midway District.
Developer Zephyr Partners has partnered with sports-and-entertainment venue operator Legends and affordable-housing builder Chelsea Investment Corp. to submit a bid for the property’ that includes more than 1,000 subsidized units, 29 acres of parks and public space, and a new arena.

The three partners are calling themselves Midway Rising and have formed a limited liability company with the same name, in a nod to the project’s aim to make over a blighted part of town and uplift the community.

“This local team that’s come together… is really sitting in a unique spot, because the vision for this project was born at a couple of local coffee shops. We had the benefit of watching the previous (request-for-proposal) process as community members, not as participants,” Brad Termini, co-CEO of Zephyr Partners, told the Union-Tribune. ‘We’ve been discussing this informally as a team for some time. But it wasn’t until the city came out with the (solicitation) 60 days ago that we really saw that the city’s core principles and goals really aligned with our coffee shop conversations that we decided to formally submit.”

Although project specifics were not disclosed, the Midway Rising vision reflects the city’s expectation for its sports arena holdings at 3500,3250,3220 and 3240 Sports Arena Blvd., meaning the plan is focused on producing affordable housing and creating a destination arena.

The team’s pitch will be submitted alongside at least four other bids for the property, due Friday, as the city puts to bed the first phase of a second solicitation process — this time following rules prescribed by the state of California.

The group’s early plan, as designed by project architect Safdie Rabines, envisions a roughly 16,000-seat, privately financed arena on the eastern edge of the property that flows into an urban public square. Here anyone can gather to watch games or concerts on the arena’s exterior video board, or patronize the project’s 250,000 square feet of shops and restaurants.

On the western side, an unknown mix of affordable units, middle-income apartments and market-rate housing are spread across mid-rise towers that open onto a central paseo. A series of rooftop parks, which cover above-ground parking garages, and elevated walkways connect residents and visitors to the sports complex. Midway Rising also calls for a hotel near the arena.
The team is, of course, emphasizing its affordable housing promise.

The product type is a highly regulated category of housing that is typically distinct from market-rate units in for-rent 01 for-sale price only. Specialized real estate developers use state and federal government subsidies to lower overall project costs. As a result, the developers are required to rent the units to people making 80 percent or less of the area median income at discounted rental rates, with income limits defined by the Department of Housing and Urban Development. Currently, the median income for a family of four in San Diego is $95,100.

Chelsea Investment Group, a for-profit company, is spearheading Midway Rising’s affordable component, with the firn aiming to produce the highest number of rent-restricted units on the sports arena site.

“It’s transformative,” said Jim Schmid, who is the founder and CEO of Chelsea Investment. “We want to produce a lot of affordable housing. We want the types, whether it’s for families or seniors, or disabled people or veterans; we want i1 to mirror the needs of the community’.”

Midway Rising is also banking on its San Diego-stacked roster making an impression on city’ officials.

Encinitas-based Zephyr has built luxury homes and apartments across the county, including The Park condo building in Bankers Hill. Chelsea Investment, based in Carlsbad, was started 35 years ago by Schmid and is a prolific builder of affordable units in town. And Legends, which oversaw the construction of SoFi Stadium in Inglewood, isn’t based here, but CEO Shervin

Mirashemi is a UC San Diego alumnus who recently moved back to town.

Formed in 2008, Legends’ ownership group includes the Dallas Cowboys and New York Yankees. It was recently valued in a transaction at $1.3 billion including debt, according to The Wall Street Journal. The hospitality’ group plans to pay for, develop and operate the San Diego arena with an eye toward booking big acts year-round, Mirashemi said.

SDU-T continued.

{ 6 comments… read them below or add one }

Lyle December 4, 2021 at 8:52 am

If you google “Bacal measure E”, you will see that two competing news sources are reporting on yesterday’s tentative ruling that says the city should have done an EIR. I would quote these sources but I’m unsure of the legality/ethicality of doing so without asking them first.


Frank Gormlie December 4, 2021 at 11:38 am

Today in the U-T: A San Diego Superior Court judge has signaled that she may invalidate a voter-approved ballot measure that sought to strike the Midway District from the city’s coastal zone, remove the 30-foot budding height limit and serve as a catalyst for neighborhood revitalization.
On Thursday,Superior Court Judge Katherine Bacal issued a tentative ruling, agreeing with petitioner Save Our Access that the city’ should be barred from implementing Measure E. The city’, she wrote, improperly placed the measure on the November 2020 ballot because it did not study the environmental impacts of taller buildings. In a Friday afternoon hearing, Bacal considered the city’s rebuttal but did not make a final determination.
“I think the judge understands the case very well,” Everett DeLano III, a lawyer representing Save Our Access, told the Union-Tribune after the hearing. “I feel very good that the judge is getting what we’ve been saying, and that indeed, at the end of the day, (the city’) should have done an environmental review before they went down this path.”


Local December 4, 2021 at 1:12 pm

So one person, the judge, can override the will of hundreds of thousands of people? Ballot measure now need studies?


Frank Gormlie December 4, 2021 at 2:17 pm

That’s what courts do – rule on the legalities of measures. That’s why we have 3 branches of government, my friend. The legislative branch, the city council, should never have placed it on the ballot in its immature state.


sealintheSelkirks December 4, 2021 at 3:14 pm

Bet La Cava isn’t all that happy with this ruling!



laplayaheritage December 5, 2021 at 4:17 pm

I am glad there will be more competition on how many new affordable units will be created in the Midway district..

In theory the City of San Diego should pick the bid that creates the “greatest number of units” for affordable housing according to Government Code Section 54220-54234 Surplus Land. Currently any development is required to “restricts at least 25% of the units to lower-income households.”

Government Code Section 54227. (a) In the event that any local agency disposing of surplus land receives a notice of interest to purchase or lease that land from more than one of the entities to which notice of available surplus land was given pursuant to this article, the local agency shall give first priority to the entity or entities that agree to use the site for housing that meets the requirements of Section 54222.5. If the local agency receives offers from more than one entity that agrees to meet the requirements of Section 54222.5, then the local agency shall give priority to the entity that proposes to provide the greatest number of units that meet the requirements of Section 54222.5. In the event that more than one entity proposes the same number of units that meet the requirements of Section 54222.5, priority shall be given to the entity that proposes the deepest average level of affordability for the affordable units. A local agency may negotiate concurrently with all entities that provide notice of interest for the purpose of developing affordable housing that meets the requirements of Section 54222.5.
(Amended by Stats. 2019, Ch. 664, Sec. 8. (AB 1486) Effective January 1, 2020.)


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