By Arturo Castañares
Publisher
The details of a controversial redevelopment proposal for the current San Diego Sports Arena site continue to morph from bad to worse as the team now seeks public financing for their $1 billion project, but it's not the first time the developer shrunk a proposal and sought public freebies.
The Midway Rising team, headed by developer Brad Termini, was selected in late 2022 by Mayor Todd Gloria and a compliant City Council from among three competitive proposals seeking to rebuild the 48-acre site into a new housing, commercial, and recreation complex.
La Prensa San Diego broke the story that Termini had the inside track after he and his family had given more than $100,000 to Gloria’s 2020 election campaign. Sources within the City had complained that they were not allowed to properly review Termini’s proposal and financial projections because the Mayor’s office was pushing his favored developer.
During Termini’s presentation before the City Council’s Land Use Committee in 2022, staff argued that the main driver for choosing among the three teams was the total number of affordable units included in the proposals.
Termini’s initial proposal was for 4,250 total units, including 2,000 affordable units, 250 middle-income units, and 2,000 market-rate units, in addition to a 16,000 seat arena with 4,000 parking spots, and a 200 room hotel.
Critics argued that Termini’s unrealistic proposal could not even fit on the site, but staff and public speakers supported Termini’s proposal anyways.
One of the most influential supporters was Brigette Browning, the leader of the San Diego-Imperial Counties Labor Council of unions and also President of the local hotel and restaurant union, HERE Local 30.
During Browning’s testimony before the City Council's Land Use Committee she admitted that her group supported all three final proposals because they all committed to project labor agreements to use unionized labor during construction, but she said Termini’s proposal was the best one because it would leave hundreds of permanent union jobs through its proposed hotel.
Weeks later, the public found out that Termini’s group had paid over $200,000 to Browning’s husband, local political consultant Dan Rottenstreich, for his help promoting the Midway Rising project but Termini had failed to file lobbying disclosures before the Council’s vote so no one knew about the couple’s conflict of interest.
The San Diego Ethics Commission later fined Termini’s company $5,000 for failing to disclose three lobbying forms due before the Council’s decisions. The reports were up to 226 days late and were not filed until the end of the day on the same day the Council voted to select Termini’s team.
Browning had a conflict-of-interest in testifying before the Council for a project where she and her husband had been paid.
As a union leader, Browning has a legal obligation to file an LM-30 financial disclosure form with the US Department of Labor to “make public any actual or likely conflict between their personal financial interests and their obligations to the union and its members.”
Browning has not filed any LM-30 related to her husband’s income from Termini’s project.
The City Council voted to enter into an Exclusive Negotiating Agreement (ENA) with Termini’s group on September 13, 2022.
But the following year, Termini’s group claimed they found a previously undisclosed eight-foot diameter sewer pipe running under the Sports Arena site that would now shrink the area available for development, causing them to eliminate two important features of their initial proposal; the 250 middle-income affordable units and the 200-room union hotel.
Two of the major reasons for having selected Termini’s group over the two other finalists were eliminated, including the most important reason Browning claimed for supporting the project; the unionized hotel.
Browning, as the President of HERE Local 30, which stands for Hotel Employees and Restaurant Employees, has not made any public statements objecting to the elimination of the union hotel, nor has the HERE union initiated any protests or boycotts as they often do when hotel owners do not agree to unionizing efforts or over pay disputes.
In fact, no union group has criticized the elimination of the middle-income units or the unionize hotel, seemingly in deference to Browning.
Termini’s Midway Rising team includes his development company Zephyr, sports-and-entertainment venue operator Legends owned by the billionaire Jones family of the Dallas Cowboys, and a subsidiary of multi-billionaire Stan Kroenke’s real estate firm that took a 90 percent ownership interest in the Midway Rising entity.
Yet given all of their financial backing, this week Termini’s group requested a new public financing model to help them pay for their ambitious, if not unrealistic, project.
The City Council unanimously passed a resolution to study creating an Enhanced Infrastructure Financing District or EIFD to provide millions of public tax dollars to repay bonds used to cover part of the project’s construction costs.
This week, Termini admitted to the San Diego Union-Tribune that his project is “not financially feasible without getting some of the infrastructure paid for.”
Bait and switch and switch and, now, taxpayer bailout.
Termini himself has never developed any project anywhere near the size or complexity of the Midway Rising proposal. He has flipped land deals to other developers, his family has developed shopping centers in Northern New York State, and he is developing a large marijuana growing operation in Buffalo, New York.
Interestingly, Termini used a similar approach as the Midway Rising project in his work to develop a marijuana operation in Northern New York.
In 2019, Termini proposed a massive $200 million project estimated to be over 1.25 million sq. ft. and claiming it would create up to 1,000 new jobs.
But three years later, Termini shrunk his proposal to be a $27.8 million, 211,000 sq. ft. project and reduced the employment commitments to only 20 full-time and 34 part-time jobs.
But in addition to shrinking the ambitious proposal, Termini also scored millions of dollars in public subsidies, including up to $3.5 million in savings from reduced hydroelectric rates from a public energy provider, $1.9 million in property tax reductions, $1.1 million in sales tax savings, and a $120,000 exemption on its mortgage recording tax.
Not surprisingly, Termini also played politics in New York leading up to his lucrative subsidies, including giving $4,700 to New York Assembly Majority Leader Crystal Peoples-Stokes, in addition to $7,200 Termini’s father, Rocco, gave to Peoples-Stokes; and $5,000 to Grassroots, a political club associated with Peoples-Stokes and Buffalo Mayor Byron Brown
Zephyr, Termini’s development company, gave $2,500 to Brown’s mayoral campaign, in addition to $990 in unitemized contributions to Brown from 10 LLC associated with Rocco Termini.
It seems Termini has a business model to leverage political favors into ambitious deals, change the project scope, then seek public subsidies to help make the project work at all.
San Diego has long been run by developer money given our expensive and always growing real estate market, and Todd Gloria’s administration is now no different.
Given other controversial real estate deals, including the 101 Ash debacle and the questionable sale of Tailgate Park to the Padres, Gloria will now have to defend his push for Termini’s deal and explain why taxpayers should pay billionaires and political allies to build out one of the City’s best and most valuable properties.
Hookups and political favors are anachronistic holdovers of old San Diego -and even Buffalo- but have no place in today’s modern world.
Midway Rising is not the first, but hopefully the last brazen attempt to milk the public while enriching already rich developers.
Shame on Todd Gloria and our City Council for helping others fleece San Diego taxpayers yet again.
Correction: an earlier version of the story stated that none of the three proposals, mentioned they would be seek public financing when they presented their projects in 2022. All three mentioned various proposals to use EIFD financing. The story has been corrected.
