San Diego State University’s 135-acre Mission Valley campus, already home to the in-progress 35,000-capacity Snapdragon Stadium, has been considered in recent months as a potential location for a second major sports and entertainment venue — this time with a well-heeled facility developer ready to fork over the cash to privately finance the project.
School affiliates have studied at a high level the feasibility of — and even approached the mayor about — placing a sports arena just south of the stadium, the Union-Tribune has learned.
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The Mission Valley arena conversations, which are said to have fizzled out, were loud enough to reach some of the teams currently competing to lease the city’s real estate around Pechanga Arena in the Midway District, adding a new wrinkle of uncertainty around a process that has been mired by state interference and legal complications.
“We’ve been approached by three different groups over the last four years about an arena potentially in Mission Valley,” said Jack McGrory, who is a California State University trustee and was a driving force behind the Friends of SDSU ballot measure that led to the school’s purchase of the Mission Valley property. “We were approached. We looked at it. We don’t think it can work.”
McGrory said that the most recent site review, conducted in collaboration with JMI Realty and JMI Sports, was initiated when an unnamed developer offered in December to finance entirely a new, 15,000-seat arena on a portion of the Mission Valley campus known as the Innovation District.
The talks, which included Padres co-owner and university adviser Ron Fowler, were aborted last week because parking limitations, event scheduling conflicts and other constraints associated with the campus masterplan proved insurmountable, McGrory said.
In August 2020, San Diego State purchased the city’s former Mission Valley stadium site along Friars Road for a satellite campus. The school, which paid $88 million for the expansive site, is in the process of erecting a $310 million mixed-use stadium that is on schedule to be completed later this year. Stadium development is being managed by JMI Sports in partnership with Legends. Snapdragon Stadium’s operator is Spectra, which was recently acquired by Los Angeles-based arena developer and entertainment venue operator Oak View Group.
The entire campus project, known as SDSU Mission Valley, calls for 4,600 residential units, 80 acres of parks and open space, 1.6 million square feet of office and research space in an Innovation District, 400 hotel rooms and 95,000 square feet of campus shops. It is anticipated to be finished by 2037 at a total cost of $3.5 billion.
The school is actively working to secure developers for some of the site’s first market-rate apartment buildings, affordable housing units and retail stores. The university is also having early conversations with potential partners on the Innovation District and may solicit developer interest to construct one of the district’s parcels later this year, said Gina Jacobs, an SDSU executive managing campus development.
The institution is also seeking to distance itself entirely from the discussion around placing a sports arena on the campus.
“Any suggestion that the university had at some point or is currently advocating for its inclusion is simply false,” Jacobs said. “An arena would not complement the site, would not fit in with the development of our Innovation District, and would require a major revision (to the site’s environmental impact report).”
McGrory, who chairs a CSU Board of Trustees committee that oversees the Mission Valley project but is not a university employee, scheduled a Jan. 6 meeting with San Diego Mayor Todd Gloria and the mayor’s Chief of Staff Paola Avila to discuss a potential arena. McGrory said he also informed SDSU President Adela de la Torre of JMI’s preliminary work, which included evaluating the Mission Valley campus masterplan and looking at scheduling challenges associated with side-by-side sports and entertainment venues.
“I said (to the mayor), ‘Before I spend any time looking at this thing, I want to know whether this is a nonstarter for you. I don’t want to do anything that looks like we’re competing with you or upstaging whatever you’re going to do on the existing sports arena site.’ We kind of agreed, we would look at it and they (the city) would look at it in terms of the responses they were getting from the (sports arena site) bidders,” McGrory said. “About a week ago, I called Paola (Avila) and said, ‘I don’t think it’s going to work for us.’ So you’re on your own.”
McGrory’s Zoom meeting with the mayor was confirmed by Rachel Laing, the mayor’s communications director. In the call, McGrory also mentioned Oak View Group as one of the three groups that approached the university, Laing said.
Oak View Group, which was started by ex-AEG CEO Tim Leiweke and music mogul Irving Azoff, was previously attached to the Midway Village+ sports arena plan, but backed out in November, citing antitrust concerns.
“We aren’t in conversations with SDSU at this time but have much respect for the university and continue to believe that San Diego is a great market for a new arena,” said Francesca Bodie, who is Oak View’s president of business development.
San Diego’s sports arena site at 3500, 3250, 3220 and 3240 Sports Arena Blvd. has been on and off the market since February 2020, with an initial attempt to offload the property scuttled by the state.
In the midst of a do-over attempt, city officials are currently evaluating five proposals to lease and remake the Midway District real estate, this time following by the book a state-prescribed method for offloading surplus land. Teams are proposing dense, master-planned communities with housing, retail, office and park space. They are also required to set aside at least 25 percent of housing units for lower-income families and deliver a new or substantially renovated sports arena.
The process was complicated by a December court order invalidating a voter-approved ballot measure that sought to lift building height restrictions in the Midway District. That means the city will need to return to voters to allow buildings higher than 30 feet in the region and throws into limbo the sports arena site proposals. Talk of an alternative arena site, which has circulated amongst the bidding teams, could undermine confidence in the city’s process or pose a challenge for teams seeking financing commitments from lenders.
To assuage concerns, the city recently addressed the matter with each of the five competing teams and reaffirmed its commitment to the Midway District process, Laing said.
“We remain committed to the terms laid out in the Notice of Availability, which requires a significant amount of affordable housing along with a world-class sports-and-entertainment venue,” Mayor Gloria said in a statement to the Union-Tribune. “The progress in negotiations with the bidding teams gives us confidence that the site will act as a catalyst for the revitalization of the Midway neighborhood.”
Whether McGrory’s assertion that the Mission Valley arena idea has been deemed infeasible alleviates fears or creates new questions remains to be determined.
At least one of the bidding teams seems to benefit from the prospect of two arenas. HomeTownSD, which is proposing the most affordable homes for the 48-acre site, calls for a scaled-down, 10,000-capacity arena tailored to the current venue’s minor league tenants. The arena vision has been characterized by HomeTownSD member JMI Sports as the “right size” for the property.
Erik Judson, who is CEO of JMI Sports, did not respond to a request for comment.
A larger arena on the SDSU Mission Valley campus would be anchored by the university’s successful basketball program, which currently plays in Viejas Arena. Opened in 1997, Viejas Arena has 12,414 seats and was financed with 30-year bonds. It is owned and operated by the Associated Students of San Diego State, and generated $936,880 in revenue in the fiscal year ending June 30, 2021, financial reports show. The sum, impacted by the pandemic, is down from $5.9 million in revenue generated in the previous fiscal year.
The frequency of men’s and women’s basketball games at a Mission Valley arena, when combined with football, soccer, rugby and lacrosse games taking place at the adjacent Snapdragon Stadium, would create too many scheduling and parking problems, McGrory said. A tally of games scheduled for current and upcoming sports seasons show a combined total of 70 home games, with 28 scheduled to take place on Saturdays.
The university would also need to formally study the environmental impacts of an arena, since one was not analyzed in the report approved for the site, and secure approval from the CSU Board of Trustees.
“I’d love to hear more about it,” said Adam Day, who is a current trustee and was chair of the board when San Diego State’s Mission Valley campus was approved. Day said he was not privy to Mission Valley arena conversations before being contacted by the Union-Tribune. “Our fiduciary responsibility is to the system and the campus. If the athletic department and the resources that (a privately financed arena) spins off for the academic offerings that we have there, those are at the core of what we do and our responsibility. But there are a number of issues and hurdles that would need to be discussed and overcome.”
Day and McGrory both noted another potential obstacle: An arena was not contemplated in the SDSU West ballot measure passed by city voters in November 2018. The successful campaign cleared the way for the school to purchase the Mission Valley property.
