The city of San Diego will soon alert a state-approved list of affordable home builders – and the development community as a whole – that it intends to lease the 48 acres it owns near Pechanga Arena in the District of Midway for redevelopment.
The act, which is expected to occur within the next two weeks, will officially reignite the city’s efforts to remake the devastated area – this time prioritizing teams who pledge to reserve a substantial number of future homes for families in low income.
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On Tuesday, city council members voted unanimously to declare the site “surplus land,” meaning it is not necessary for city use. The resolution replaces the body’s August 3 statement, which incorrectly stated that future development must include the renovation or replacement of the existing sports arena. The new statement does not include the condition because the California Department of Housing and Community Development, or HCD, has informed the city that conditions cannot be imposed on the surplus land.
However, San Diego can still impose the requirement of a sports arena in documents that are distributed to the state’s interest list, said Penny Maus, the city’s director of property and airport management.
“HCD agreed that the development condition proposed by the city to preserve the current use of regional entertainment venues is reasonable,” Maus said in an interview with the Union-Tribune. “So we worked together (with HCD), cleaned up the element and now the resolution has been approved. … This puts us in a position to issue the availability notice in the next two weeks.
The cleanup element is part of San Diego’s painstaking efforts to strictly follow the state’s new rulebook for offloading surplus government-owned land, as required by the Surplus Land Act, after the city has already violated the requirements.
“Since receiving HCD’s feedback on the process, under this administration we have worked closely and closely with their staff. We are both determined to achieve the same end result, which is ultimately to provide more affordable housing in the area, ”said Maus.
In February 2020, the city first sought developer interest in redesigning the Midway District site, located north of San Diego International Airport, south of Mission Bay and bounded by Kurtz Street to the north and Sports Arena Boulevard to the south. The property includes Pechanga Arena San Diego, which has long been the home of the San Diego Gulls and San Diego Sockers. The 16,000-seat hall opened in 1966; it hosted around 145 sporting and entertainment events a year before the pandemic.
San Diego initially chose Brookfield Properties to redo the site. The developer’s plan included a brand new sports arena, housing, parks and retail, but no formal commitments to subsidized units. However, that redevelopment effort was scrapped in June after HCD said the city should have offered the site to builders of affordable housing first.
Now, the city will distribute what is called an “availability notice” to a list of affordable housing developers registered with the state. The notice will specify that interested teams must respond with a plan that reserves at least 25 percent of the housing units offered for low-income families. The notice will also be posted at city real estate service web page, which makes it more widely available, although all responses must comply with the Surplus Land Act guidelines and the notice of availability of development conditions, Maus said.
Development teams will have 60 days to respond to the notification. The city is then required to enter into a 90-day “good faith” negotiation period with all interested parties. In accordance with state requirements, the assessment process will favor teams that offer the most affordable units at the lowest average affordability level.
At least three groups are preparing to respond.
Brookfield has assembled a team that includes an affordable housing partner and is working on a new plan. And Toll Brothers, who also participated in the city’s previous solicitation process, is back with a rebranded vision that he plans to unveil at an event on October 17. The group, now known as Midway Village +, has expanded to include affordable housing developer BRIDGE Oak View Group, a housing and arena developer-operator. A third group led by The ConAm Group, an apartment builder and property management company, is also in the mix.
Last week, each team made a brief presentation at the Midway-Pacific Highway Community Planning Group meeting, said Dike Anyiwo, group vice president.
“I’m super optimistic now that we’re in compliance with state law,” he said. “As much as I am frustrated with the delay, I am a big advocate of affordable housing and I think the end product will be better under the Surplus Land Act.
City staff will review all relevant proposals and make recommendations first to the land use and housing committee and then to the entire city council, possibly in the spring of 2022, Maus said. The board could recommend additional due diligence and public comment on the teams and their proposals, she said, which means the selection process could extend into the summer and fall of next year.
Alternatively, if no one responds to the notice or if a deal cannot be reached after the negotiation window, the city can solicit interest through a more standard RFP process that has fewer restrictions.