Will Avalanche of Questions Stall Gloria’s Steamrolling of Midway Rising?

The question now is whether the avalanche of questions being raised will stall Mayor Gloria’s steamrolling of Midway Rising for council approval?

Over the weekend, the San Diego Union-Tribune joined a chorus of media and other voices in raising tantalizing questions and revelations about the redevelopment team led by Brad Termini  of Zephry Partners. For starters, reporter Jeff McDonald repeated the main claim (originally made by La Prensa and echoed by the OB Rag):

Before being selected to build a new sports arena and thousands of housing units in the Midway District, a developer and his wife made the two single largest personal donations to a political committee dedicated to electing Todd Gloria mayor of San Diego, records show.

Brad Termini and his wife, Stefanie, each contributed $50,000 to San Diegans from Every Community in Support of Todd Gloria for Mayor 2020, an independent expenditure committee sponsored by the Laborers International Union of North America, Local 89.

They also together gave at least $4,500 directly to Gloria’s mayoral campaign.

So, San Diego’s mothership of newspapers has now joined La Prensa and CBS 8 in continuing to question whether Midway Rising is the proper choice to lead the Sports Arena area development.

Here are some of the allegations, claims, and facts against developer Termini and Midway Rising, raised in Saturday’s U-T article:

• Terminis’ political contributions were made in 2019 and 2020, months before Termini’s company, Zephyr Partners LLC, began preparing its bid;
• Termini, an Encinitas businessman, is one of the biggest marijuana entrepreneurs in western New York and has been sued more than a dozen times for breach of contract and other claims;
• He is the subject of a tax lien that has since been settled, and at least one persisting civil judgment.
• In its disclosure to the city consultant, Termini’s firm acknowledged a prior “partnership dispute” but did not identify the case. According to San Diego Superior Court records, Termini and Zephyr Partners have been sued more than a dozen times.
• Opponents of the mayor’s decision say the city did not perform adequate background checks on Termini and his company;
• Plus they say Gloria was improperly influenced by the campaign donations and rushed the process;
• Public confidence in the city’s real estate dealmaking has been marred by the several recent missteps, most notably the acquisition of the 101 Ash St. office tower.
• Termini‘s company was selected as a partner even though it has never built a project as large and complex as Midway Rising; it has built smaller housing projects of a few hundred units;
• the company has a history of selling its development rights to other builders once entitlements have been secured from local planning officials;
• employees in the city’s real estate department say they have been sidelined in the sports arena redevelopment effort, and that the internal analysis had been dictated entirely by director Penny Maus and her top assistant, Lucy Contreras, who recommended Midway Rising to the city land use committee;
• partners in the team, Chelsea and Legendsm disclosed past litigation in their filings but Zephyr Partners appears to have omitted some civil complaints filed against the firm;

The U-T quoted one city employee who wished to remain anonymous out of fear of retaliation:

“Seems incredible to me that they haven’t done much background searching on the successful bidder. That is a huge red flag. And where is that due diligence?”

During the public comment period at the most recent city Land Use and Housing committee, speakers opposed the choice and complained that the process was rushed and lacked sufficient due diligence. Lori Saldaña stated:

”This is looking more and more like slot-machine development. You put $100,000 in, and you get millions back in development deals. San Diego is better than that.”

The committee voted unanimously to push the Midway Rising proposal to the full Council, which will meet on it Tuesday, September 13. If approved, the city would begin exclusive negotiations with the group to work out a detailed development plan for the next two years. Any agreement reached by the parties would return to the council for a follow-up approval.

If city officials move forward with Midway Rising, the parties would then negotiate a long-term ground lease for the 48 acres that would return to the council for consideration next year or in 2024.

Yet, so many questions have been raised — even a U-T editorial advising a slower process — that the city council will be well advised to carefully move through the next steps of the process.

Gloria obviously wants this — the redevelopment of the sports arena area — to be part of his legacy as mayor, but if the councilmembers don’t stumble in their stampede to rubber stamp his choice, then it will be part of their legacy too.