Midway Plan Swaps in New Developer
SAN DIEGO UNION-TRIBUNE
The Midway Village+ team will submit a bid for San Diego’s sports arena site with a substitute taking over arena development.
BY JENNIFER VAN GROVE
DEC. 3, 2021 5:30 AM PT
A splashy sports arena proposal for the city-owned land currently home to Pechanga Arena in the Midway District has been edited following the exit of a big-name player.
The Midway Village+ team will today submit its bid for San Diego’s sports arena site with a substitute in place. Los Angeles-based Oak View Group is out and Newport Beach-based Revitate is now listed as the group’s arena district developer.
The former partner, the well-capitalized developer behind Climate Pledge Arena in Seattle, had promised to build a $450 million, carbon-neutral arena on its own dime. Revitate, which has ties to the Sacramento Kings NBA franchise and Golden 1 Center, is also committing to a new arena, although the exact financing plan remains to be determined.
“For the project as a whole, it’s the same vision. This is a master plan that’s anchored around housing for everybody. It’s anchored around multiple, dynamic entertainment and sports venues. It’s about a central park. It’s about new office space,” Kunal Merchant, co-founder and chief operating officer of Revitate, told the Union-Tribune. “In terms of the vision of what the arena needs to deliver for the people of San Diego, it’s the same thing, which is a premier, world-class venue that’s going to deliver sports, music, entertainment and cultural programming.”
The revised bid — from master developers and luxury housing builder Toll Brothers, affordable housing developer Bridge Housing and now private equity investor Revitate — will be submitted alongside at least four others for San Diego’s 48-acre property. The city will today close the books on the first chapter of a second attempt to lease the site for redevelopment. Qualified applicants will have 90 days, starting Saturday, to negotiate with the city before presenting their plans to the City Council next year.
The Midway Village+ latest proposal includes apartments for a variety of income levels, with the group now disclosing that it will build more than 1,000 units for low- and middle-income residents, meaning people making between 30 percent and 120 percent of the area median income, as defined by the Department of Housing and Urban Development.
Altogether, the plan calls for “thousands” of housing units alongside commercial buildings that line the periphery of the site. A new, 15,000-seat arena, which could be expanded, will sit in the center of the project and feed into a 12-acre public park, a hotel and a 3,500-seat event center. On the western edge, located on a parcel not included in the city’s solicitation, the development team would also like to build a 20,000-seat home for the San Diego Loyal soccer team.
A conceptual rendering of Midway Village+ depicts an expansive project with apartment and commercial buildings lining the periphery of the site, a new sports arena in the center and a 12-acre public park. (Courtesy, AVRP Studios)
Revitate is a new division of RAJ Capital, which was founded in 2006. The privately held investment group’s sports division was established to target team ownership opportunities and consider sports-anchored real estate projects. On the Midway Village+ project, the firm will work alongside development management firm SPD Sports, stadium design firm MANICA Architecture, consulting company Biederman Redevelopment Ventures and arena promoter Live Nation.
The swap in arena partners could be viewed by rival bidders as a welcome setback in a competition where prime real estate is on the line and little is known about the city’s selection process.
Oak View’s exit was an unexpected blow, said David Malmuth, a San Diego-based development consultant and Midway Village+ project executive. However, the team regrouped and was, within days, sitting down for a “taco summit” with its future partner.
“I picked my jaw off the floor. ... It was a bad day, for sure,” Malmuth said of receiving the Nov. 4 phone call from Oak View Co-Founder Tim Leiweke. Leiweke told Malmuth the group would be pulling out of the bid because of regulatory concerns related to its purchase of venue management company Spectra, the operator of the in-construction Aztec Stadium in Mission Valley. “But I woke up the next day and got to work.”
By Nov. 9, Malmuth was lunching with Merchant and Revitate Executive Chairman Alex Bhathal, whose family business is a principal co-owner in the Sacramento Kings franchise.
“There aren’t many companies that are in a position to step up and make the commitment that Oak View made,” Malmuth said. “Period. New paragraph. Revitate brings some new strengths to this. They have very on-point experience with the Golden 1 Center in Sacramento.”
The 17,500-seat Golden 1 Center in downtown Sacramento, which opened in 2016, was the result of a public-private partnership between the city and the Kings. The city contributed $223 million to the project and another $32 million worth of land in a deal that kept the franchise from leaving town, and also resulted in construction of the Sawyer Hotel and the Downtown Commons entertainment district. At the time, Merchant was the mayor’s chief of staff and played a role in the arena’s early development process. He then closed the loop as an executive with the Kings.
“From the first drawings to the first basket at Golden 1 Center, I was part of all aspects,” Merchant said. “Alex and the (Bhathal) family were investor-developers.”
The group also has experience developing privately financed areas. Midway Village+ team member SPD Sports oversaw pre-construction activities for the $1 billion Chase Center in San Francisco that was paid for by the NBA’s Golden State Warriors.
“We look forward to conversations with the city and community before fully finalizing our plan,” Merchant said. “With that said, we have zero expectation of a public subsidy like the Golden 1 Center.”
At least five teams are vying to redevelop San Diego’s sports arena holdings, which have been on and off the market since February 2020. In the current process, teams must put forward a redevelopment plan that includes at least 25 percent of proposed housing units set aside for lower-income families, and commit to renovating or replacing the existing sports arena.