Decision on Midway Rising real estate deal delayed

Promised for May and then June, the city of San Diego’s decision on the Midway Rising project slated to remake the city’s sports arena property in the Midway District with thousands of apartments and a new entertainment venue has quietly been pushed back to an unknown date later in the year.

The proposed real estate transaction, which would see the city enter into a long-term ground lease with the Midway Rising development team for the 49.2-acre site that includes the existing sports arena, remains unscheduled.

“The city continues to review and process the remaining documents associated with the Midway Rising project. At this time, there are no confirmed dates for committee or City Council consideration,” said Joya Patel, who is the communications director for San Diego Mayor Todd Gloria.

The City Council’s Land Use & Housing Committee is not slated to hear the item before the council’s summer legislative recess, Councilmember Kent Lee, who chairs the committee, told the Union-Tribune.

The committee hearing is required before the full council can consider final approval of the deal. The earliest possible committee hearing date is in September, marking four years since council members initially selected Midway Rising over competitors in a competition to lease and redevelop the city’s property at 3220, 3240, 3250 and 3500 Sports Arena Blvd.

“We've made significant progress in partnership with the city to advance this transformational project. As the largest affordable housing development in California history, Midway Rising is an ambitious undertaking, and working through the final details requires thoughtful coordination,” said Jeff Meyer, a spokesperson for the Midway Rising development team. “We remain fully committed to delivering on this vision and are encouraged by the momentum to date. We look forward to bringing the project before the City Council in the near future.”

The unexplained delay appears to be largely bureaucratic in nature, as the city continues to navigate the aftermath of a court order reinstating the 30-foot height limit in the Midway District.

The project, with the approval of California’s primary housing agency, intends to apply state density bonus law to breach the local regulation. But the undefined timeline suggests that finalizing the transaction with the developer is proving more complicated than Gloria anticipated when he proclaimed at the beginning of the year that the deal would be ready for public hearings in the spring.

As it stands, the city and the developer remain on the last leg of a lengthy negotiating process that is expected to culminate with a long-term ground lease, although deal terms have not been made public.

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 development plan includes 4,254 residential units, a 16,000-seat replacement arena, 130,000 square feet of commercial space, 8.1 acres of parks, and an additional 6.4 acres of plazas and public space. The land-use plan, known as the Midway Rising Specific Plan, calls for several 105-foot-tall mixed-use buildings with residential units and a 165-foot-tall entertainment center. It also memorializes the team's commitment to build 2,000 residential units for households earning 80% or less of the area median income, or what's considered affordable housing.

The city and the developer were marching toward a council decision last year until a state appellate court invalidated the ballot measure that lifted the height limit in the Midway District, halting forward momentum. The mayor, however, was adamant that he would get the deal done, promising in his January State of the City address to bring the project forward for a vote in the spring. A few months later, Gloria said the real estate deal was scheduled to go to the Land Use & Housing Committee in mid-May. More recently, his office said it was targeting a June hearing date.

In the interim, California's Department of Housing and Community Development has confirmed that the project can invoke state housing law to build above the neighborhood height limit.

The city is simultaneously leaning on the state Legislature to help insulate the project from legal challenges associated with state environmental law. Senate Bill 958 would, if signed into law, prohibit the environmental impacts associated with increased building height from being considered significant impacts under CEQA. The bill, authored by state Sen. Akilah Weber Pierson, D-La Mesa, and sponsored by Gloria, passed out of the Senate at the end of May and is moving through the Assembly.

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This story was originally published June 16, 2026 at 1:11 PM.