It’s official: San Diego needs to re-start its effort to redevelop the Sports Arena area because its process last year likely violated state law.
The law in question – the Surplus Lands Act – is decades old, but in 2019 it was tweaked.
The goal of the change: to increase the chance that publicly owned land included sufficient low-income housing whenever it was redeveloped.
That tweak meant San Diego should have told other public agencies and affordable housing developers that the 48 acres around the Sports Arena was available before it solicited private developers to put together bids to lease the land and revamp it, the state’s Housing and Community Development office confirmed this week in a letter it sent the city . That’s true even though the city planned to lease the land, not sell it, a distinction clarified in the 2019 change to the law.
In March, we broke the news  that the wonky state law threatened the project – one of the final major initiatives of former Mayor Kevin Faulconer’s administration before he left office. City officials ran headlong into the problem, but their counterparts at the Metropolitan Transit System (the board of which includes city leaders) and the city of Chula Vista were well aware last year of the threat the state law posed to redevelopment efforts that were underway, and took steps to comply with the law .
Now: Mayor Todd Gloria now says he’ll start the process. He blamed the error on his predecessor. His administration had been holding off on announcing a change in direction while it waited final word from the state that it needed to.
There had been some hope that there would be a way to save the deal – the city selected Brookfield Properties’ bid to build more than 2,000 homes (without a low-income housing commitment), five acres of public parks, an entertainment district and a rehabilitated arena – without starting over, but the state’s letter pretty much closed the door on that possibility.
I Declare Surplus Land: Instead, the state said the new effort needs to begin by formally declaring the Sports Arena property “surplus land” – basically, saying the city itself no longer needs the property as it’s currently used – by July 16. If it doesn’t, the state could begin issuing fines. The mayor’s office said the City Council will take it up right away, but that would mean the Council’s land use committee could declare the property surplus at its July 23 meeting, and the full Council doing the same by Aug. 3.
After that, the city will need to send out a notice to other public agencies and affordable housing developers in the region, letting them know the land is available. They’ll have 60 days to respond. If anyone responds, they’ll get 90 days to negotiate a deal with the city.
If not, the city can once again ask developers for their plans to rebuild the property – but any proposal would, by law, reserve at least 15 percent of its total homes for low-income residents.
If that’s still confusing, we’ve obtained a visual aid. That’s right: we’ve got a Surplus Lands Act Process Flow Diagram. The Politics Report knows how to party. (You’ll need to click on it to really get down.)
What’s next? The city could in just a few months be in a position to once again ask private developers for their plans to redevelop the Sports Arena. If that happens, Gloria and his staff will be able to craft their own request for bids. Faulconer’s proposal was pretty bare bones – it didn’t obligate developers to a certain amount of low-income housing, obviously, but it also could have spelled out demands for public parks, specific expenditures on the Sports Arena, other amenities or labor terms. It didn’t.
Would the Gloria administration, given the chance, set its sights a little higher?
“We will not repeat the mistakes of the past administration,” said Nick Serrano, Gloria’s deputy chief of staff. “All options are on the table and we will take a thoughtful approach to the development of a competitive process.”
It’s an enticing opportunity for Gloria. As with the franchise agreement the city just inked with SDG&E, Faulconer left office with a concrete proposal he negotiated, available for all the public to see. If Gloria can secure commitments for the city beyond what Faulconer was able to win, it’s not a reach for Gloria to tout that improvement as a political win – as he did with the franchise agreement.
Gloria will have one other big advantage over Faulconer. Voters passed Measure E last year, lifting the 30-foot coastal height limit in the entire Midway area. When Brookfield’s bid won, it wasn’t all that clear voters would agree to do so – and it was commonly accepted that the winning bidder would also win the right to make significant donations to the Measure E campaign.
This time around, any would-be developers will already know that the height limit is gone, and they won’t need to cut a check to any campaign to help make it happen.
Measure E and the Sports Arena Project Were Not the Same Thing
We’ve seen a few responses to the news about the Sports Arena project suggesting that the collapse of Brookfield’s redevelopment suggests Measure E was a lie.
It’s true that initiative proponents used the Sports Arena redevelopment to sell Measure E. The height limit made a dense urban development like it infeasible, the argument went, so building a new arena and revitalizing the surrounding area required a yes vote. If you want to argue that it was a bait and switch, fair enough. What are politics without arguments?
But officially, voters did not make any decision about Brookfield’s development when they approved Measure E. That measure lifted the height limit for the entire Midway area, which includes the Sports Arena, but many other areas that could now see more development as well. When city staff chose Brookfield as the winning project before the election, that still wasn’t final approval for a deal. Even without the problem with state law, the city and the developer still needed to negotiate terms for a long-term lease, and the City Council needed to approve it. The developer could have walked away from those negotiations, and the Council could have rejected those terms.
So yeah, the campaign to approve the measure sort of tried to have it both ways – using the promise of a new Sports Arena to persuade voters to approve Measure E. But the measure never actually guaranteed the project. The ballot went out of its way to say area “includes the Sports Arena,” but it also said it “does not approve any specific project.”
Gloria Has it Both Ways on Faulconer Admin’s Final Acts
Early Thursday morning, Andrew Bowen at KPBS published a story  on a new, 100-home project in Bankers Hill that is the city’s first to use the so-called Complete Communities program . It includes no parking, seven homes for very low-income people and four more for those with moderate incomes.
In the story, Gloria said the project was an example of his vision for an urban, affordable city.
“One of my top priorities is to increase production of homes, close to transit stations and job centers, for low- and middle-income families and individuals — so, it’s fantastic to see the first development under our Complete Communities program break ground,” he told Bowen.
It’s just that, the Complete Communities program was one of the last policy pushes from Faulconer’s final year in office, and the City Council approved it after Election Day, but before Gloria and the newly elected Council took office.
A few hours later, the U-T broke the news that the Sports Arena deal was, indeed, off. That deal, too, was a last-minute policy push by Faulconer. This time, Gloria decided to point that out.
“This is yet another example of a flawed real estate deal from the previous administration where San Diegans are now left with little to show for a significant investment of time and resources,” Gloria said in a press release. “I am committed to work quickly to restart this process in compliance with the Surplus Land Act.”
It’s good to be a new mayor. One of the last acts of the old mayor blows up? His fault. One of the last acts of the old mayor blossoms? You’re welcome. It even works if they both happen in the same morning.
No lies detected: The San Diego Housing Federation honored Voice of San Diego’s Lisa Halverstadt this week. We’re always a bit wary when groups with specific interests in public affairs give us awards but there are no lies in their statement  of why she did the best journalism coverage of affordable housing issues: “She is a staff writer for the @voiceofsandiego and has fundamentally changed the public discourse regarding housing and homelessness for the better.”
We have a presser for that: Lisa had been working for a couple weeks on a story about how bad homelessness was getting. Then, Thursday, Mayor Todd Gloria announced a big press conference was going to happen Friday with him, County Supervisor Nathan Fletcher and others, including the head of the Downtown Partnership, Betsy Brennan. They would outline his plans and spending to address how bad homelessness was getting. We got her story  up Friday afternoon. Homelessness downtown is “nearing a crisis level.”
County budget, explained: The county of San Diego is in its final stretch of public feedback and approval of its annual spending plan. Our civic education team pulled together a quick explainer  of the county budget and how it’s different than other municipalities. Share it with your normal friends.
Hang with celebs, give away money: That’s the governor’s anti-recall campaign. “Fueled by record tax revenues, business connections and celebrity friends, the governor is demonstrating how he’ll use his official perch this summer to drive his campaign narrative,” writes Politico’s Carla Marinucci . The recall vote may come as soon as September. It remains relatively easy to get on the ballot as a candidate should voters agree Newsom needs to go. You only need a few dozen signatures and about $5,000. But Secretary of State Shirley Weber recently decided she’d add another : Five years of tax returns must be disclosed. Former San Diego Mayor Kevin Faulconer said he’d have no trouble with that.
Independent path: On this week’s podcast , we talked about a few questions we have going forward. One of them is whether anyone with resources and name recognition will run for district attorney. That primary election is now less than a year away and we have not yet heard of anyone running. If District Attorney Summer Stephan wins re-election, she will be the first we can remember to run and win a top local elected spot as an independent candidate. She left the Republican Party a couple years ago and has adopted some more liberal positions while still trying to maintain support of law enforcement groups. She hired Dan Rottenstreich as her campaign consultant. He is now one of the most prominent Democratic consultants, having helped County Supervisor Nathan Fletcher and both the last Council president, Georgette Gomez and current one, Jen Campbell.
Where are the lines, though? We talked about redistricting again on the podcast too. We can’t do a lot of punditry about local politics without knowing where the lines are. And we won’t know for maybe up to six months or more. This won’t matter for the district attorney’s race but it will for San Diego City Council and for the local congressional delegation, which could shift a lot. And then there’s Supervisor Jim Desmond, the conservative from North County who could have to defend the seat in a district that went for President Joe Biden over former President Donald Trump. Or does it shift? Or does it get more liberal? Who knows?
Con in Congress: CNBC’s show “American Greed” featured former Rep. Duncan Hunter in an episode that premiered Monday. You can see the first 10 minutes here .
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