By Arturo Castanares
Editor-at-Large

A statewide university official testified under oath that he briefed San Diego Mayor Todd Gloria twice in 2022 on details of an offer for a free-to-taxpayers sports arena but the Mayor instead kept moving forward on selecting a private developer who had donated more than $100,000 to his election campaign.

Jack McGrory, a member of the 25-person California State University Board of Trustees and former City Manager for the City of San Diego, is the first official to detail a 2021 proposal received from Denver-based Oak View Group (OVG) to fund and build a new sports arena within the SDSU’s Mission Valley campus.

Jack McGrory

 

The offer for a $425 million arena was similar to the deal that led to the successful development of the University of Texas at Austin’s Moody Center in 2021.

McGrory testified under oath that he spoke with Mayor Gloria and his Chief of Staff first after receiving the proposal and then again after McGrory and eight other San Diego leaders flew to Austin to tour the Moody Center.

The others on the trip included SDSU President Adela de la Torre; Adam Day, the Chief Administrative Officer for Sycuan who at the time was also a CSU Trustee; SDSU Athletic Director JD Wicker; Executive Associate Athletic Director Curt Apsey; SDSU Vice-President for University Relations and Development Adrienne Vargas; JMI Sports CEO Eric Judson, a consultant for SDSU; San Diego real estate developer Tom Sudberry; and businessman David Malcolm, a representative for SDSU donor Dianne Bashor who provided the chartered jet for the trip.

“It was a great deal for taxpayers,” McGrory testified during a legal deposition held in downtown San Diego last week. “[But Mayor Gloria] said he was serious about pursuing the Midway project,” McGrory added, referring to the City’s selection of a Gloria campaign donor Brad Termini to redevelop the existing sports arena site in the Midway area that will require hundreds of millions of dollars of taxpayer subsidies.

After Gloria ignored their proposal, SDSU officials and all of those involved kept the offer secret for nearly two years until La Prensa San Diego broke the story in March of this year. 

McGrory testified as part of a lawsuit filed by La Prensa San Diego in May after the University system failed to disclose public documents related to the offer and trip taken by the group. La Prensa San Diego sued under the provisions of the California Public Records Act that requires the release of documents created by or sent to public agencies, including SDSU and the CSU system.

SDSU officials received a proposal for a $425 million sports arena development deal in December 2021 then organized the tour of the Moody Center in May 2022. McGrory said he agreed with others that the San Diego region could not support the development of two new arenas, so he says he contacted Gloria to inform him of the offer.

Page 1 of Oak View Groups' four-page proposal to SDSU 

 

Oak View Groups' proposal highlighted that the company would invest the required capital with no cost or risk to SDSU through a long-term lease of the land within the SDSU West campus in Mission Valley.

In May 2022, the nine-person delegation flew to Austin in a private jet to tour the Moody Center and received a briefing from Oak View Group and UTA officials. McGrory testified that SDSU President Adela de la Torre and the others sat in on the presentation.

McGrory testified that he briefed Gloria and his Chief of Staff, Paola Avila, sometime in early 2022 then again after the trip to Austin in May 2022.

A January 6, 2022, email released through a California Public Records Act request shows a detailed summary of the proposal that was prepared for McGrory by Erik Judson, CEO of JMI Sports, a consulting company contracted by San Diego State University to negotiate sports deals.

Email from Erik Judson to Jack McGrory in preparation for briefing Mayor Gloria 

 

The email subject is “Message Points for the Mayor” and outlines the details of the proposal, explaining that SDSU would be “embarking on a quick study to test the feasibility of an arena to make sure we can preserve our current development plans and secure entitlements” and if "the project is feasible, we will need [Gloria’s] support.”

Judson’s email also claimed that the “previous Mayor's office declined to show leadership” when other offers had been received for sports arena developments, referring to former Mayor Kevin Faulconer. 

McGrory testified that Gloria’s response to the free offer was to instead push for his own plan to select a developer to build a mixed-use project at the City-owned site of the current Sports Arena in the Midway area. At the time, McGrory did not know which developer the City would end up selecting.

Just a few months after that second briefing, Gloria pushed the City to select Brad Termini and his Midway Rising development team.

Even before the City Council meeting to select one of three finalists, City staff leaked that the Mayor’s office was pushing for Termini’s team even though he had never developed any project near the size of the Midway Riding proposal, and had never worked on a sports arena project.

Development experts argued that Termini’s proposal was unrealistic because the amount of construction wouldn’t even fit within the City’s 48-acre parcels. 

Brad Termini

 

But Termini had become the largest personal donor to Gloria’s 2020 election campaign after he and his wife donated $100,000 to an independent expenditure committee set up to support Gloria.   

Termini’s proposal included a 16,000-seat arena, 2,000 low-income affordable apartment units, 250 middle-income units, 2,000 market-rate units, a 200-room unionized hotel, commercial and retail spaces, and 4,500 vehicle parking spots.

During the City Council committee meeting to select a developer, the region’s most powerful labor union leader testified in favor of Termini’s proposal, saying his project would leave more permanent union jobs through its 200-room hotel.

Brigette Browning, the President of the local hotel workers union and also the leader of the region’s Labor Council, however failed to file required federal Department to Labor disclosure forms stating that her husband, Dan Rottenstreich, had been paid more than $200,000 as a consultant for Termini’s project.

Browning also directly lobbied Gloria and City Council members in support of Termini's project. Browning's San Diego-Imperial Counties Labor Council has endorsed all nine City Council members in their elections.

Brigette Browning

 

Termini’s team also failed to disclose Rottenstriech’s involvement until months after the City Council voted to select his team. The San Diego Ethics Commission fined Termini’s group $5,000 for failing to disclose his involvement in a timely manner but did not invalidate the Council’s action to select Termini’s team.

Dan Rottenstreich

 

But months after being selected, Termini scratched the 200-room unionized hotel and the 250 middle-income units from his proposal, yet Browning did not protest the elimination of hundreds of jobs for her union members.

Last year, Termini’s team began negotiating with the City to receive tens of millions of dollars of taxpayer-funded bond subsidies through tax increment financing. Termini admitted that his project is “not financially feasible without getting some of the infrastructure paid for” by the City.

This September, Termini’s team asked the City to extend the deadline for them to reach a final development deal, with the City Council voting to delay their approval for another year.

La Prensa San Diego’s lawsuit continues to move forward with additional depositions and discovery to determine what other documents were improperly withheld from disclosure.