The investment firm once helmed by local financier and former Union-Tribune owner “Papa” Doug Manchester is considering building what could be California’s largest AI data center right next door to downtown San Diego, our MacKenzie Elmer reveals.
Emails obtained by Elmer show Manchester Financial Group is in talks with the Navy and local power officials about a proposal to build a 400-megawatt data center at the site of the Naval Information Warfare Systems Command near Old Town.
The data center would be part of a larger overhaul of the 70-acre site that would include a new headquarters for the command center along with housing, hotels, retail and other amenities.
If built, the data center could be the state’s largest. By comparison, a controversial data center proposed in Imperial County would be 330 megawatts.
Ted Eldredge, Manchester Financial’s President and CEO, said the data center is just one of several proposals for the naval site and might never get built at all.
“No final project has been approved,” company representative Matt Awbrey said in a statement.
Elo-Rivera Demands Transparency Around Data Center Costs
Since breaking the news about the data center proposal on Thursday, Voice also has learned that the developer engaged in talks with the city’s energy grid builder, San Diego Gas and Electric, and the city’s power buyer, San Diego Community Power, before local elected leaders knew about the project.
After learning about the proposal, San Diego City Councilmember Sean Elo-Rivera said he had some questions for SDG&E. He asked whether the grid has enough capacity to add 400 megawatts of continuous power demand from a data center.
SDG&E officials said no matter where the demand is coming from, be it a data center or a new hospital, they will update the grid to meet it.
“If we’re being told that customers would absorb that cost, it’s incredibly alarming and SDG&E owes a response to the public about it,” Elo-Rivera said. “The idea that we’d be adding costs so a billionaire could build a data center is something we’d all find offensive.”
Midway Rising’s Final Snag
During yearslong negotiations over the Midway Rising project, San Diego city officials insisted the developer be required to build 2,000 “net new” affordable homes – meaning the new homes would actually be new, not just homes initially slated for other projects and tacked onto Midway Rising.
Our Scott Lewis learned that may not happen. Meaning Midway Rising might not increase its neighborhood’s total supply of affordable housing as much as proponents hoped.
The final deal outlining requirements for the project, slated for initial City Council review at a committee hearing Friday, no longer includes the “net new” homes requirement.
Instead, the developer would be allowed to absorb affordable housing units initially slated for other projects within a three-mile radius of Midway Rising.
In practical terms, that means developers of other projects could pay Midway Rising to build the affordable housing the city otherwise would require the developers to build.
The units would still get built. But there would have been even more affordable units in the neighborhood if all developers, including Midway Rising, built their full complement of affordable housing instead of trading them around.
Midway Rising representatives said insisting on the “net new” requirement would remove crucial flexibility that often enables developers to build affordable housing without losing money.
“It’s important to explore all available tools to expedite…affordable housing,” said Charles Schmid of Chelsea Investment Corp., an affordable housing builder in the Midway Rising partnership..
Mayor Todd Gloria Picks New COO
Mayor Todd Gloria on Thursday appointed Bethany Bezak, who currently serves on the mayor’s executive team, to be the city’s new chief operating officer and oversee the city’s day-to-day operations.
Bezak has served as chief performance and logistics officer since December 2025, overseeing several city departments, including transportation, purchasing and contracting, and general services.
Gloria fired the city’s last COO in February 2025 and filled the role himself. Councilmembers and others pushed multiple times for him to rehire a COO, after what they perceived as management failures.
“This was both a budget reduction as well as a desire to be fully accountable for the difficult decisions that are gonna need to be made in order to put the city on a stronger footing,” he told Voice of San Diego on Thursday.
Read more about the mayor’s appointment here.
Latest State Reports Show Growth, Declines at San Diego Unified
New student performance metrics from the state show quite a few bright spots for San Diego Unified — but also some worrying declines.
Reporter Jakob McWhinney breaks down how the district fared.
The district outperforms other large urban districts: The district’s graduation rate showed a marked increase, likely helped along by officials’ creation of new graduation pathways. The percentage of graduates who qualified as “prepared” under the state’s career and college indicator metric also increased.
Good declines: The district’s suspension rate and the number of students who were chronically absent declined.
Post-pandemic, chronic absenteeism reached crisis levels for districts across the country. Despite the declines, the district still hasn’t erased the pandemic-era increase.
Room for improvement: And while student math performance continued to inch up, performance declined in two important areas – students’ scores on English standardized tests and the percentage of English language learners who were making progress toward proficiency.
South County Leaders Rally Opposition to Voter ID Initiative
A group of local elected officials and community activists is seeking to alert South County voters to what they say is an existential threat to basic voting rights in California elections.
The group, including state Assemblymember David Alvarez and San Diego County Supervisor Monica Montgomery Steppe, urged local voters this week to oppose Prop. 39, a state ballot measure that would require voters to prove their identity and U.S. citizenship before voting in California elections.
The ballot measure, conceived by San Diego Republican state Assemblymember Carl DeMaio, mirrors similar voter ID laws in other states and is backed by a prominent out-of-state billionaire aligned with President Donald Trump.
Alvarez and other opponents of the measure said it will disproportionately impact voters in South County. Studies of similar measures in other states show they lead to higher rates of ballot rejection for Latino, Black, Asian American, older and disabled voters.
“Under Prop. 39, simple errors like a single wrong ID digit could result in valid ballots being rejected,” Alvarez said at a Tuesday No on Prop. 39 event in Barrio Logan.
Read The South County Report Here.
In Other News
- The Metropolitan Transit System board on Thursday voted to approve a new administrative process for addressing its tickets championed by County Supervisor Monica Montgomery Steppe that aims to help low-income riders bypass the court system and avoid steep, punishing fines. MTS expects to implement the new system, which limits fees to $125 a citation, by early 2029 after securing equipment, technology and support to make the changes.
- La Mesa’s City Council voted 4-1 to raise the city’s cannabis business tax to 5 percent. (Union-Tribune)
- KPBS spoke to our Jakob McWhinney about the best dive bars in San Diego.
The Morning Report was written by Jim Hinch, MacKenzie Elmer, Mariana Martínez Barba and Jakob McWhinney. It was edited by Andrea Lopez-Villafaña.