(Pictured: University of Texas at Austin's Moody Center.)
By Arturo Castañares
Editor-at-Large
San Diego State University officials received a proposal in 2022 to build a new sports arena within the Mission Valley development at no cost to the public but have kept the offer under wraps even as the City of San Diego is currently negotiating to develop a similar facility at the existing Sports Arena site.
SDSU President Adela de la Torre, the University’s Athletic Director, and several prominent San Diegans flew to Texas on a private jet in May 2022 to tour the Moody Center at the University of Texas at Austin (UTA) at the invitation of the company that led the development project.
Sources confirmed to La Prensa San Diego that SDSU received the proposal from Oak View Group, a Denver-based venue operator that bills itself as “the largest developer of sports and entertainment venues in the world.”
But sometime after the May 2022 trip, SDSU officials decided to keep the offer secret.
Others who participated in the trip to Austin included CSU Trustees Jack McGrory and Adam Day, local business leader David Malcolm, and SDSU’s Vice-President for University Relations and Development, Adrienne Vargas.
Oak View Group developed Austin’s 15,000-seat Moody Center through a partnership with UTA where the developer assumed all of the cost and risk of construction and management of the arena and the venue became the home of the University’s basketball team without any investment by UTA.
“Can you imagine having an arena for f, r, double e?” UTA Athletic Director Chris Del Conte said about the deal.
The Moody Center, which cost $380 million to build, became the most expensive college basketball facility in US history when it opened in May 2022.
“I’ve never been this happy to give this much money away,” Oak View Group Founder and CEO Tim Leiweke said when the arena was opened.
The Austin deal is a 35-year operating agreement for OVG to run the facility and keep 100% of the revenues for ten years to recoup their investment, then, beginning in the 11th year, revenues will be split 50/50 with UTA.
SDSU has not publicized the details of the proposal or any descriptions of how an arena could fit within the University’s Mission Valley site where Snapdragon Stadium now sits as the anchor of a mixed-use complex of educational, residential, commercial, and sports uses, in addition to the 34-acre River Park recreation area.
La Prensa San Diego submitted several California Public Records Act requests for documents related to the offer, but SDSU has not yet responded to those requests.
The proposal for a new sports arena in Mission Valley would be competitive -if not fatal- to the Midway Rising redevelopment proposal for the existing Sports Arena site currently being negotiated by the City of San Diego as a mixed-use residential, commercial, and entertainment complex that includes a 16,000-seat arena.
Development experts maintain that two sports arenas would not be built to compete against each other in such proximity between the Midway area and Mission Valley.
The Midway Rising proposal has been controversial since the City selected the developer, Brad Termini, in late 2022.
Brad Termini, whose company, Zephyr, leads the proposal team, and his family gave a total of more than $100,000 in campaign contributions to Todd Gloria’s 2020 election campaign.
Sources within City staff claimed Mayor Gloria’s office was pushing for the selection of Termini’s group without properly vetting their proposal and financial viability.
Weeks after Termini’s group was selected it was discovered that they had paid over $200,000 to political consultant Dan Rottenstreich, the husband of Brigette Browning, the leader of the powerful San Diego-Imperial Counties Labor Council and president of the local hotel employees union.
Termini's group failed to file lobbying forms with the City to disclose Rottenstreich's involvement before the Council voted to select his group. Some of the disclosure forms were up to 226 days late but were only filed hours after the Council's vote.
Browning spoke in favor of selecting the Midway Rising team at the City Council’s Land Use Committee, but she failed to disclose her conflict-of-interest after her husband had been paid by the team. Browning also failed to filed a require Department of Labor disclosure when a union leader has a financial conflict-of-interest and failed to recuse herself from the project which had paid her husband.
The following year, Termini eliminated 250 middle-income affordable units and a unionized 200-room hotel from their plan, but Browning never complained about the loss of hundreds of jobs for her union.
Last week, the Midway Rising team supported a City Council resolution to study the creation of a public bond subsidy for the project through the implementation of an Enhanced Infrastructure Financing District, or EIFD, to capture new property tax revenues and use them to pay back millions of dollars in bonds over 35 years.
Although a staff report outlining the three Sports Arena development bidders mentioned the possibility of the winning bidder using property tax increment financing to help build the affordable housing component of the project, neither City staff nor the Midway Rising team mentioned additional public financing during the selection process or in the year and a half since the team entered an exclusive negotiating period with the City.
It now appears that the Oak View Group offer came before the City of San Diego selected the Midway Rising group from among three competing finalists for the project.
It is unclear what, if any, impact the existence of an offer for a free arena would have had on the bidding process at the City of San Diego.
A deal similar to the Austin development with OVG would relieve either the City or SDSU from having to fund or facilitate financing for a new arena.
The environmental review process for the Midway proposal would require the City to study potential alternative sites to ensure that the new project does not create more negative impacts than other locations, including traffic and smog impacts of increased trips into a congested area.
The Midway Rising project not only includes a new 16,000-seat area, but also 4,250 residential units, up to 145,000 square feet of commercial space, and a yet unspecified number of acres of parks, plazas, and public spaces.
Midway Rising is headed by Termini’s Zephyr development company which partnered with the Kroenke Group after it entered into negotiations with the City. The Kroenke Group is owned by Stan Kroenke, the billionaire owner of the Los Angeles Rams and LA’s Sofi Stadium who is married to Walmart heiress Ann Walton Kroenke.
Termini’s group also includes sports management company Legends owned by Dallas Cowboy’s billionaire owner Jerry Jones.
La Prensa San Diego reached out to Oak View Group for comment but did not receive any response.
