San Diego’s City Council on Monday night approved the $4.2 billion Midway Rising redevelopment, clearing the final local hurdle for a project that has consumed more than eight years of planning, two invalidated ballot measures and special legislation to shield it from litigation. The plan reimagines the nearly 50 acres of city-owned land around the Pechanga Arena site in the Midway District with a new 16,000-seat arena, more than 4,000 housing units and new parks, commercial and retail space.
Roughly 2,000 of the units will be income-restricted affordable housing, and the council strengthened that commitment before voting. An earlier version of the agreement would have allowed the development to serve as a “receiver” site absorbing affordable units from other projects instead of building them fresh — a practice known as off-siting. Councilmember Kent Lee amended the deal to require net-new affordable units, along with provisions protecting the city’s interest in any project refinancing. “It preserves the city’s ownership of the land. It now includes stronger protections to deliver new affordable housing,” Lee said during the meeting.
The financing architecture is as significant as the buildings. The council approved an Enhanced Infrastructure Financing District that will dedicate a portion of future property tax revenue generated by the development to reimburse developers for eligible infrastructure costs, pending county approval. The city’s independent budget analyst estimates developers will spend roughly $460 million upfront on roads, sidewalks, lighting, parks and bike lanes, and could recoup about $378 million of that through the district. Over agreements expected to run about a century, the city is projected to collect between $884 million and $1.23 billion in ticket fees and rental revenues.
The project’s arithmetic depends on the arena acting as an anchor. Developers plan to build it on the current Dixieline Lumber site, betting that its proximity to the Old Town Transit Center will create a walkable corridor whose private investment — hotels, restaurants, housing — pays for public infrastructure through incremental tax growth. The city stopped signing long-term leases with businesses on the land back in 2018 under Mayor Kevin Faulconer to assemble the site, and Mayor Todd Gloria inherited and advanced the process through a four-year negotiation with the selected development partner.
For San Diego’s business community, the approval marks one of the largest public-private developments in the region’s history and a template that will be studied for the NAVWAR site a few miles south, where a similar in-kind federal land deal is being negotiated. It also ends a chapter in which Midway’s future was defined by litigation risk; state lawmakers and the governor granted the project special protection from lawsuits last year, an extraordinary step that acknowledged how easily redevelopment at this scale had died before. Construction staging is now the next test, with the arena, housing phases and infrastructure works expected to roll out over the next decade.
