Politics Report: The Arena Buzz

The San Diego City Council’s initial endorsement of the idea to create an Enhanced Infrastructure Financing District around the new Midway redevelopment project has triggered a kind of panic among some boosters of San Diego State University.

It could mean the beginning of the end of a hope that a new arena could arise at SDSU’s Mission Valley site. And the worry is spilling out into the public.

“SDSU Hides Proposal for Free Sports Arena in Mission Valley” was the headline La Prensa blasted out last week. The story put a few more details into a two-year-old story the Union-Tribune’s Jenn Van Grove first broke. In short, stadium developer Oak View Group had offered the university a deal in which it would build an arena at the site for no cost (other than the land SDSU bought and now has set aside for an Innovation District).

The vision would have the new arena take the place of Viejas Arena, which is on campus. That could then become student housing or other uses and the new arena would not be needed in Midway.

Jack McGrory, a trustee with the California State University system and a founding father of the SDSU Mission Valley development, acknowledged that worries flared this month.

“Everyone is concerned about the bait and switch going on with the Midway Rising group and they’re concerned they’re not going to build an arena so the pressure would fall on SDSU to do it in Mission Valley,” McGrory told me. But, crucially, he also clarified he supported the arena plans for Midway and not Mission Valley.

What’s really going on: Behind the scenes, a pretty significant battle seems to be going on among the most powerful people in the SDSU orbit. It comes only a few years after they were united when they thwarted a group of private investors who wanted to build a soccer stadium and then successfully led a public ballot initiative and campaign to help the university buy and develop the Mission Valley stadium land that once housed Qualcomm Stadium.

On the one side is JMI Sports, founded by former Padres owner John Moores and David Malcolm, a businessman and philanthropist who helped coordinate the trip he and SDSU President Adela de la Torre took to Texas to inspect a similar arena Oak View Group had overseen in Austin.

JMI Sports was part of a team that lost to Midway Rising in the city’s contest for redeveloping its nearly 50 acres of land at the Sports Arena site. JMI proposed replacing the Sports Arena in Midway with a much smaller, 10,000-seat venue focused on performing arts.

JMI Sports’ CEO Erik Judson had always said the Midway neighborhood was not the place for a large arena.

“The idea of putting 15,000 seats without the infrastructure to support that kind of traffic and activity does not equate in my mind. That’s not the location for an arena larger than what we’re envisioning,” Judson told me in 2022.  

Perhaps he had a different location in mind. Judson did not respond to my request for comment.

SDSU isn’t interested: On the other side, is the university itself, led by de la Torre. She wants nothing to do with a new arena on the still-undeveloped plots in Mission Valley. The university is pushing toward becoming an R1 doctoral research university and the Innovation District planned for the land is too important to de la Torre and faculty leaders to jeopardize.

A university spokesperson sent me a written statement about the issue and said it can be attributed to the university. (We usually prefer to attribute statements to individual people but hey, I’ll let the vastly diverse, community known as SDSU speak as one voice here).

“As reported in 2022, there were no plans to move forward with an arena and there are still no plans to do so, in part because such a venue in SDSU Mission Valley was not in the original vision and site plans and would require a significant and costly revision to the site’s master plan and environmental impact report. SDSU remains focused on the site’s current planned developments, to include the Innovation District, which will support our long-standing vision for research and our educational mission, and will continue to drive economic growth for the region.

“SDSU never received a formal proposal, but did evaluate the concept of locating an arena at SDSU Mission Valley, and ultimately determined that it was not in the best interest of the university. SDSU has not advocated for nor is the university in support of the addition of an arena in SDSU Mission Valley, and university officials have made it clear that there was no interest in moving forward with an arena. Those multiple earlier, public-facing statements dating back to 2022 have not changed.”

And the Midway guys: The Midway Rising team didn’t get an actual deal yet. They won the right to negotiate with city staff. After the lead partner in the group, Zephyr, and its CEO Brad Termini got their foot in the door, billionaire Stan Kroenke came in and took a 90 percent stake in the enterprise.

Then the team announced it could not deliver a promised hotel or several dozen middle-income housing units. Whether that’s a “bait and switch” as McGrory and others have called it, is up to you.

But the group remains committed to an arena – a big one too, up to 16,000 seats developed by Legends, a rival to Oak View Group.

Legends sent me a written statement, this one attributed to Shelby Jordan II, project director for Legends.

“The Midway Rising team is excited and encouraged by the progress that we are making with the City to deliver the largest affordable housing project in California’s history, along with a world-class entertainment complex. With recent unanimous approvals from the Midway-Pacific Highway Community Planning Group, San Diego City Council and Planning Commission, we are continuing to build momentum and support behind all aspects of this once-in-a-generation project that will revitalize the entire Midway community.”

The Midway Rising team was not willing to lay out its sequence of construction. Would the arena go first, for example? They wouldn’t say.

But it probably would. The city’s preliminary endorsement of the idea to create an Enhanced Infrastructure Financing District means a line would be drawn around the Midway development area and a baseline of property taxes collected in it would be set. Any new or increased property taxes above that would be used for the development and infrastructure for the whole area instead of flowing to the rest of the city or the county, if the county agrees to participate.

If development is approved, Kroenke and his banking partners would have to put up the money to start construction on an arena and all the surrounding development and related infrastructure. When the arena started operating, property taxes would start to be assessed and only then could they start to pay off or pay back whatever loans the investors took out to build all that related infrastructure.

Notes

Fletcher strikes back: We reported Friday morning that former County Supervisor Nathan Fletcher’s lawyers mentioned in court he had sued his accuser, Grecia Figueroa of defamation. That filing is now public. Here’s a KPBS summary. In short, he still admits to their encounters but says Figueroa knew her allegations that they were assaults and harassment were untrue when she made the claims and it caused damages he now wants to recover.

New City Hall saga: Michael Smolens has a good update on the long slog toward a new City Hall for San Diego.

If you have any feedback or ideas for the Politics Report, send them to scott.lewis@voiceofsandiego.org.