The timeline for San Diego’s highly anticipated Midway Rising arena development has been extended by another year, allowing the development team and the city more time to finalize the deal. Initially set to expire on December 5, 2024, the exclusive negotiation agreement (ENA) has now been extended until December 5, 2025. This extension provides additional time to negotiate the long-term ground lease and complete the environmental review of the 48-acre Midway Rising project.
Midway Rising, selected in 2022 to revitalize the city’s sports arena site, envisions a massive redevelopment, including 4,250 residential units, a 16,000-seat replacement arena, and 130,000 square feet of commercial space. The project also includes plans for public parks, plazas, and open spaces. A significant portion of the housing units—2,000—are designated as affordable housing for low-income households.
The extension of the ENA comes as both the city and the development team face delays in moving through the necessary processes. Christina Bibler, who oversees the city’s real estate division, cited delays related to procurement, contracting, and finalizing development plans, according to a report in The San Diego Union-Tribune. She characterized the delay as a six-month slowdown, with a goal to present a negotiated deal to the City Council before the end of June 2025.
In addition to development negotiations, there have been slowdowns in the project’s environmental review process. The California Environmental Quality Act mandates a thorough analysis of the project’s impact on traffic, air quality, and neighborhood character. The environmental review, which began in December, is expected to outline these impacts in detail once released.
Another factor in the delay is the city’s ongoing review of a proposed subsidy to make affordable housing feasible for the project. The Midway Rising team is working on plans to secure the necessary subsidies for the affordable housing component, which relies on local, state, and federal funds to offset construction costs and maintain lower rental rates.
The development team behind Midway Rising includes market-rate developer Zephyr, affordable housing builder Chelsea Investment Corp., and entertainment venue operator Legends, with the Kroenke Group serving as the lead investor. Legends recently completed its $2.3 billion purchase of ASM Global, which manages the Pechanga Arena San Diego, but the firm was involved in legal proceedings after the U.S. Department of Justice filed a lawsuit alleging antitrust violations related to the timing of the acquisition. Legends settled the case for $3.5 million without admitting wrongdoing, the report added.
Despite legal hurdles, Legends took over operations of the Pechanga Arena in August under an interim lease agreement. Midway Rising is required to invest $1 million in improvements to the arena within the first 30 months of the lease, with an increased share of gross revenue and ticket sales benefiting the city. Operational continuity has been assured, with the same staff overseeing daily activities, and Midway Rising has promised to enhance the arena experience with new investments and an upgraded food and beverage program.
With the project now extended, San Diegans can expect continued negotiations and development updates in the coming year as both sides work to bring the ambitious Midway Rising project to life.
