State Says Gloria’s Pick of ‘Midway Rising’ Is Legal

by on September 8, 2022 · 4 comments

in Ocean Beach

The state of California has notified the city of San Diego that Mayor Todd Gloria’s pick of Midway Rising to redevelop the sports arena area is legal.

David Zisser, the assistant deputy director of California’s Department of Housing and Community Development (HCD), has informed the city by letter that San Diego has up to now “successfully completed all applicable requirements” of the Surplus Land Act, and that the city is correctly adhering to the law.

The Surplus Land Act is to ensure that excess government-owned land is made available for affordable housing, which means San Diego is required by the statute to “give first priority” to the bidder with the highest number of affordable housing units. Zisser’s letter was received Tuesday, Sept. 6 by Penny Maus, San Diego’s real estate director.

Midway Rising was one of three final redevelopment teams initially selected this time around, and was eventually chosen by Gloria and his staff. According to the San Diego U-T, Midway Rising “is proposing to develop the city’s sports arena holdings with the most residential units deed-restricted for low- and very-low income families — or 2,000 units offered at an average affordability of 48 percent of the area median income.”

Affordable housing is defined, in this process, as units that are deed-restricted for families earning 80 percent or less of the area median income. The median income for a family of four in San Diego is $106,900, according to the state’s 2022 list of income limits for affordable housing units.

Maus and Gloria — and others — are hoping this state endorsement will tip the balance in Midway Rising’s favor come a key City Council vote on Tuesday, September 13. At that meeting, councilmembers will decide on whether to accept or reject Gloria’s recommendation that the city enter into an exclusive negotiating agreement with Midway Rising, led by its market-rate housing developer Zephyr. Brad Termini is the principal of Zephyr and was one of Gloria’s largest political contributors when he ran for mayor in 2020.

Today, Thursday, the City Council’s Land Use and Housing committee will weigh Midway Rising’s selection in advance of consideration by the full council.

In the HCD letter, Zisser stated:

“The city provided HCD with a copy and summary of the proposals … detailing the number of affordable housing units at each affordability level by area median income. According to that summary, Midway Rising … proposed to develop the greatest number of affordable housing units, as well as the greatest number of total housing units.

“As a result, the city staff is recommending selection of Midway (Rising). A review of the five proposals establishes that the city has met the requirements (of the Surplus Land Act) and HCD’s SLA guidelines.”

(The U-T’s link to the full HCD letter did not work.)

It appears HCD in making its determination that the city was following the law, relied on a “summary of  the proposals” supplied by city staff. There’s no indication that staff at the state agency performed their own evaluation. The local San Diego La Prensa reported that “insiders” at the city alleged they were not allowed to do a genuine evaluation themselves of Midway Rising and that the decision to select the group was pushed from the top.

According to Jennifer Van Grove at the U-T:

The recommendation (of Midway Rising) will be challenged by HomeTownSD and Midway Village+, which may argue that the city’s singular focus on affordable units is shortsighted and not mandated by the statute.

HomeTownSD from Monarch Group and Midway Village+ from Toll Brothers Housing have tried to boost their affordable housing numbers in recent weeks and months. The city decided to consider the unit counts that were contemplated in the financial models submitted to JLL — even though Midway Village upped its number of proposed affordable units from 1,610 to 1,780 after the 90-day “good faith” negotiating period. HomeTownSD also sought to beef up its affordable housing proposal with at least 300 units more than its submitted total of 1,726 units, but the request came too late, after JLL had finished its work, the city said.

HCD’s determination is not final. San Diego must submit an update on negotiations, as well as draft deed language for the affordable housing restrictions before it can finalize a transaction with Midway Rising, the agency said.






{ 4 comments… read them below or add one }

kh September 8, 2022 at 11:39 am

Nevermind that the proposal doesn’t comply with the Municipal Code or the Local Coastal Program (which is state law). Or the mayor’s possible violation of corruption and bribery laws.

The mayor’s staff claimed the developers also submitted alternate proposals compliant with the 30ft height limit. We need to track these down and compare them to the 100ft proposals.


Frank Gormlie September 8, 2022 at 4:00 pm

CBS 8 has also been sniffing around Zephyr and Brad Termini and has discovered more


kh September 9, 2022 at 12:04 pm

Wow, sounds like they are in over their head. Why didn’t the others gift millions to Gloria’s campaign coffers? Are they new at this?

I wonder if the contract will even hold them to the number of units and parks promised.

It’s also erroneous for anyone to use the term “selected by the mayor”. The city council is making this selection. The mayor has an official say only if its a split 5-4 vote.

But of course we know it’s already been decided by the mayor’s downtown cronies, the council meeting is just a formality. I wish they’d at least give us the respect of pretending it’s all above board.


Frank Gormlie September 9, 2022 at 10:15 am

Remember these San Diego City Council members — they make up the Land Use and Housing Committee and just voted Thursday unanimously to push Midway Rising forward: Vivian Moreno (Chair), Joe LaCava (Vice Chair), Stephen Whitburn, and Chris Cate.


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