The comprehensive land-use plan behind the $3.9-billion Midway Rising project proposing to remake San Diego’s 49.2-acre sports arena site with thousands of apartments, a replacement arena and new shops is slated for its penultimate review.
Thursday, the city of San Diego’s Planning Commission will weigh whether to recommend to City Council adoption of the Midway Rising Specific Plan, certification of the associated environment impact report and approval of a development agreement. City staff are recommending approval of the proposed actions, which also include a general plan amendment, community plan amendment and rezone to residential mixed-use.
The proposed changes would allow building heights that max out at 250 feet for a portion of the site and support a total of 4,254 residential units, or 2,088 more units than what is allowed under the existing community plan, according to agenda materials prepared for the Planning Commission.
The Planning Commission’s decision is expected to tee up final consideration of the land-use documents by City Council later this year.
The package on the table does not include, however, a proposed lease agreement with the city for the property, as the commission does not have authority over real estate transactions. The transaction documents will be made public ahead of an anticipated October hearing at the city’s Land Use and Housing Commission, a Midway Rising spokesperson said.
“After many years of hard work, the Midway Rising team is proud to bring the Midway community’s vision for a vibrant, pedestrian- and transit-oriented landmark entertainment destination forward for consideration by the San Diego Planning Commission and City Council this fall, and we hope to break ground on this world-class redevelopment late next year,” Shelby Jordan, the project director for Midway Rising, said in a statement.
The Planning Commission hearing, nearly four years in the making, lays the foundation for San Diego to make one of its most consequential real estate deals in recent memory.
In October 2021, the city put its sprawling property at 3220, 3240, 3250 and 3500 Sports Arena Blvd. back on the market. At the time, the city was forced to re-offer the site for lease according to California’s recently amended Surplus Land Act, which requires developers to set aside 25% of proposed housing units for low-income families.
In September 2022, San Diego City Council members selected Midway Rising because of the development team’s commitment to build a replacement arena and construct 2,000 residential units for households earning 80% or less of the area median income, or what’s referred to as affordable housing in the state law.
Midway Rising is composed of market-rate housing developer Zephyr, affordable housing builder Chelsea Investment Corp., and sports-and-entertainment venue operator Legends. The Kroenke Group, a subsidiary of billionaire Stan Kroenke’s real estate firm, is the entity’s lead investor and limited partner. The city and the development team are tied together in an exclusive negotiation agreement that runs through Dec. 4, 2025, although it can be administratively extended by staff for another year.
In December 2023, San Diego commenced its analysis of what’s known as the Midway Rising Specific Plan as a supplement to the environmental work completed in 2018 for the Midway-Pacific Highway Community Plan. The city released the draft subsequent environmental impact report and associated technical studies in March. The city received 58 comment letters on the draft from various agencies, organizations and individuals. The final documents were published with minor edits earlier this month.
The specific plan includes 4,254 total residential units, a 16,000-seat replacement arena, 130,000 square feet of commercial space, 8.1 acres of parks, and another 6.4 acres of plazas and public space on 49.2 acres of land. The project includes a 250-foot tall residential high-rise, several 105-foot tall mixed-use buildings with residential units, and a 165-foot tall entertainment center.
The plan calls for two new, public streets — Frontier Drive and Kemper Street — to allow traffic to cross the expansive site between Kurtz Street to the north and Sports Arena Boulevard to the south. Frontier Drive is also envisioned as the project’s main street and will be lined with shops and restaurants. It is also meant to provide pedestrian connections to the project’s two public parks, directing people west to a resident-centric park called The Green or leading them east to an arena-adjacent park and plaza space called The Square.
The project, according to its environmental analysis, will have 7,040 total parking spaces that are spread across multiple structures within residential and mixed-use buildings. There are 4,550 spaces allocated for residents, 2,100 spaces for entertainment center visitors and 390 spaces for store and restaurant patrons. As a result, Midway Rising will need to use off-site, overflow parking lots when events draw crowds greater than 7,500 people.
In addition, the plan incorporates changes to off-site roads and intersections to ideally improve traffic flow and better promote walking, biking and transit. Most notably, Sports Arena Boulevard will be reconfigured with four lanes for cars — compared to six lanes currently — and two bus-only lanes. The reconfiguration includes a wide promenade with a multi-use path fronting the project site.
The project will result in 22,514 additional daily car trips at build-out for all use types — entertainment, commercial and residential — during a typical sports event or concert, according to a local mobility analysis prepared by engineering consulting firm Kimley Horn. But only the vehicle miles traveled associated with 40,000 square feet of regionally serving restaurant space is considered a significant and unavoidable impact, according to the final environment analysis.
Vehicle miles traveled is a measurement that looks at the total miles driven by all vehicles within a specific area, and was studied separately for each of the project’s land uses. It is distinct from daily trips. At build-out, there will be a regional net change in vehicle miles traveled per year of 24,981 miles for commercial use, the environmental report states.
As a result, the Midway Rising development team is required to provide a shuttle service between Frontier Drive and the Old Town Transit Center daily, between 12 p.m. and 10 p.m., as soon as the first eatery is ready to open.
By comparison, the vehicle miles traveled per resident for the residential portion of the project is said to be a less than significant transportation impact. The analysis estimates residents will travel 11.3 miles per day when phase one opens, 8.6 miles per day at build-out and 10.6 miles per day in 2050, with the miles-per-resident falling below a significance threshold of 85% of the regional average of 16.1 miles.
Several comment letters submitted in response to the draft report and included in the final document identified concerns with the traffic analysis, arguing that the mitigation measures are insufficient to combat congestion in and around an already traffic-plagued area. The Peninsula Community Planning Board noted, for instance, that the projected vehicle miles traveled associated with the arena — 839,145 additional vehicle miles traveled per year — will worsen conditions.
“The Sports Arena Boulevard/Rosecrans corridor is already one of the most congested areas in the city, often gridlocked during peak hours or events,” the planning group’s letter states. “The future estimated utilization of the entertainment center assumes 158 events a year, which translates to over 40% of the year of unmitigated traffic congestion. Adding this volume of traffic will exacerbate congestion, leading to longer idling times (hence more air pollution) and frustrating delays for residents in Midway, Point Loma and Ocean Beach.”
Otherwise, the final environmental analysis determined that, even after mitigation, three other impacts — land use, historical and tribal cultural resources, and noise — will be significant and unavoidable. The impacts are linked to the demolition of the existing sports arena, which is a designated historical resource, and noise levels that exceed limits during special events in outdoor public areas.
A development agreement laying out the terms for implementing the specific plan is also included in the package of documents up for consideration this week.
The agreement identifies $1.2 billion in extraordinary benefits provided to the city. The calculation assigns $547.6 million in value to the number of low-income residential units that the developer is building above what is required by the Surplus Land Act, or 936 affordable units. The new arena is also considered an extraordinary benefit with an assigned value of $520.5 million. Other benefits include ongoing park maintenance and security, and off-site road work.
In exchange for the benefits, the Midway Rising team will be granted special rights, including the ability to construct the low-income housing units at any time within the project’s phasing plan, so long as certain conditions are met. For instance, at least 10% of the project’s total units must be constructed as affordable units in the first phase of development. The agreement also allows the developer to satisfy the city’s developer impact fee requirements related to parks and mobility with infrastructure improvements instead of cash payments.
The development is anticipated to be built in two phases over a 10-year period, starting with the eastern portion of the site, according to the environmental analysis. The initial phase will open with a new, 380,550-square-foot entertainment center, 90,888 square feet of retail, and the nearly 3-acre The Square park. The first phase also includes 875 residential units in buildings east of the new Frontier Drive.