La prensa

PERSPECTIVE: Arena Offer Secrecy Kept Public in the Dark

Midway Rising
Author: La Prensa
Created: 05 April, 2024
Updated: 07 April, 2024
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17 min read

Arturo Castañares
By Arturo Castañares

Publisher

Sometimes it takes time and distance to see more clearly how relationships and interests help explain the actions of others. 

We learned that lesson with the 101 Ash building debacle that was exposed by the media more than three years after insiders had worked together to fleece taxpayers and left a $200 million hole in the City’s budget with only a toxic, empty building to show for it. 

That now also seems to be the case as more information continues to drip out about the City of San Diego’s push to build a large mixed-use project at the site of the existing Sports Arena in the Midway area and a secret trip to Texas taken by SDSU officials who later kept it quiet.

Two weeks ago, La Prensa San Diego reported new details about an offer for a free-to-taxpayers indoor arena at SDSU’s Mission Valley campus and a trip SDSU officials took to Austin in May 2022 to tour a similar arena but they then kept the details of the offer hidden from the public. 

Although some details of a possible arena were included in a February 2022 San Diego Union-Tribune article, no one had reported that three months later, several top officials, including SDSU President Adela de la Torre and two CSU Trustees, flew on a private jet to meet with the company who offered a free indoor arena just as the City of San Diego was considering selecting a developer to rebuild the existing Sports Arena in the Midway area.

SDSU now says they have no documents related to the offer, and also gave us a false narrative as to who initiated to trip to Texas in the first place.

As a larger overview of the issues related to arenas in San Diego, here is what we now know.

FEBRUARY 2022

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In February 2022, San Diego State University officials told the San Diego Union-Tribune that they had been approached by several private groups to build a new indoor arena at SDSU West, the new development in Mission Valley anchored by Snapdragon Stadium, but they said the University had no interest in also placing an indoor arena within their new expansion site.

Voters had approved SDSU’s purchase of Qualcomm Stadium through Measure G on the November 2018 ballot, choosing public ownership and development of the critical Mission Valley site over the competing Measure E for a 99-year lease to private developers for their SoccerCity proposal. 

Former SD City Manager and current CSU Trustee Jack McGrory admitted that he had talked with Mayor Todd Gloria and his staff at the time, telling them, “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.”

At the same time, Mayor Todd Gloria sought bids from developers to rebuild the existing Sports Arena site into a mixed-use residential and commercial project.

The three final bidders all included indoor arenas as part of their proposals. 

Neither the City nor any of the bidders mentioned the possibility —or even knowledge of— an alternative site in Mission Valley for a new indoor arena.

Development experts agree that the market would not support two new indoor arenas in San Diego.

SEPTEMBER 2022

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Then in early September 2022, just days before the City Council voted to enter into an Exclusive Negotiating Agreement (ENA) with one of the teams, I heard that key staffers within the City’s Real Estate department had been kept from properly vetting the three finalists because Gloria’s office had already decided who would get the deal: A relatively unknown developer named Brad Termini who had never before built any project even close in scale to the Midway proposal. 

Termini was the least experienced of the three bidders having only developed two projects with a total of 228 units before submitting his Midway Rising proposal for 4,250 units. Other larger projects listed on Zephyr’s website included deals where Termini simply flipped the land to the eventual developers. Termini had never built or operated an arena so many suspected he would quickly turn around and leverage his deal to a bigger developer with real experience. 

Two years earlier, though, Termini and his family had given more than $100,000 to Gloria’s 2020 election campaign; coincidentally, of course. 

Termini became the single-largest private donor to Gloria’s campaign where the next-closest personal contribution was only $15,000. 

On September 8, 2022, as the City Council’s Land Use Committee took up the selection of a developer, the City's Chief Operating Officer, Jay Goldstone, dismissed concerns over previous lawsuits filed against Termini and admitted that due diligence would take place after a developer was selected for exclusive negotiations with the City. 

Brigette Browning, head of the San Diego-Imperial Counties Labor Council and also President of the local hotel and restaurant workers union, weighed in to support Termini’s Midway Rising proposal even though her Labor Council had voted to support all three final bidders after they had all agreed to use project labor agreements on their construction projects. 

Browning’s defense for calling Termini’s Midway Rising proposal “absolutely the best project” was because it included a 200-room hotel that Termini had agreed would be unionized. 

Termini’s proposal included 4,250 residential units of which 2,000 would be affordable, retail and commercial spaces, the hotel, and a 16,000-seat sports and entertainment indoor arena. 

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Although critics argued that Termini’s ambitious proposal wouldn’t even fit on the City’s 48-acre Sports Arena site, seven City Council voted to select Termini’s group anyway (Raul Campillo voted NO and Vivian Moreno was on maternity leave.)

OCTOBER 2022

Just three weeks after being selected, Termini and his companies donated $650,000 to fund the campaign to pass Measure C on the November 2022 ballot to raise the building height limit in the Sports Arena area beyond 30 feet.

Even though Termini’s project was not buildable without the height change, the Mayor and City Council selected Termini before the election with the understanding that he would then fund the political campaign

Termini again became the largest campaign donor with the next largest contribution being $25,000 from Chelsea Development, a nonprofit affordable housing builder that is also part of Termini's group, and the next donation being only $5,000.

Measure C passed by a narrow margin of 51.1% to 48.9% with only a little more than a 9,000 vote margin.

The following month, labor leader Browning spoke at a local political confab and said she regretted having supported the SDSU West project because SDSU didn’t agree to project labor agreements for ancillary construction around the Mission Valley project and the assurances SDSU provided labor unions were vague and unenforceable.

Browning sounded like a dedicated and unrelenting advocate for union workers. 

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SDSU West and Midway Rising didn’t seem to have any connection to each other, at least not that we knew of at the time. 

FEBRUARY 2023

But just a few months after the City’s selection of Termini, the San Diego Ethics Commission fined his Midway Rising group $5,000 for turning in their required lobbying disclosure forms up to nine months late. The forms were only filed after the Council voted to select Termini’s group. 

The Ethics Commission eventually discovered that Termini’s group had paid political consultant Dan Rottenstreich over $200,000 to promote the project before the Council’s vote. 

News flash: Rottenstreich is labor leader Browning’s husband. 

No one outside of the Midway Rising group knew Browning had a conflict of interest when she testified in favor of Termini’s project after her husband had brought home over $200,000 from Termini. 

In fact, Browning also reported lobbying City officials on the Sports Arena deal as a labor leader before the vote to select Termini but she failed to file a required disclosure form with the US Department of Labor detailing her husband’s income as a conflict-of-interest.

Neither Gloria nor Browning ever commented on the discovery of her conflict and they just acted as if it was business as usual –and maybe it was.

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Only the SDUT and the OB Rag have joined La Prensa San Diego in writing about Browning’s conflict while other outlets blatantly ignore the obvious conflict between Termini’s secret deal with Rottenstreich and Browning’s glowing support for their project. 

In a community property state like California, Browning was just as entitled to Termini’s money as her husband was and that is literally the definition of a conflict-of-interest.

MAY 2023

Then last year, we found out that Termini had become a financial partner in the new MLS team that will begin playing at SDSU West’s Snapdragon Stadium in 2025. 

The new San Diego FC ownership team, headed by Egyptian-born billionaire Mohamed Mansour, also includes Sycuan and Padres megastar Manny Machado.

But why would they include Termini in the soccer team ownership funded by a multi-billionaire, one of San Diego’s wealthiest gaming tribes, and one of baseball's highest paid players? 

Regardless, SDSU, Sycuan, labor leaders, and Termini were now all on the same team.

The following month, Termini announced that he had flipped 95% of the Midway Rising project to billionaire Stan Kroenke, owner of the NFL’s Los Angeles Rams and husband of Ann Walton, one of the Walmart fortune heiresses.

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Kroenke is the owner of the new SoFi Stadium in Los Angeles, as well as the 21,000-seat Ball Arena and the 25,000-seat Dick’s Sporting Goods Stadium in Denver, Colorado.

The City has not released any information on the financial transaction between Termini and Kroenke that shifted nearly all of the project to the out-of-town billionaire. 

OCTOBER 2023

But then, a year after entering into the ENA at the City with Browning’s and Rottenstreich’s support, Termini’s group eliminated the union hotel from his proposal, citing their “discovery” of a 96-inch-wide sewer line that runs under the Sports Arena. 

It’s interesting that City staff, the Public Works Department, and other bidders knew about the sewer line, but somehow —and conveniently— Termini’s group only found it a year later and that, they claim, was the reason for cutting the hotel that would have delivered well-paid union jobs and millions of dollars in hotel taxes to the City. 

Even more curious is the fact that Browning, as the most powerful labor leader in San Diego, has never criticized Termini for cutting the hotel she claimed was the main reason to support his bid, even though it sold out her own union members.

Again, the media has largely ignored the hypocrisy and duplicity of Browning’s work fighting for union jobs and the deafening silence of her not criticizing Termini for axing the proposed unionized hotel. 

Maybe silence has a price. 

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MARCH 2024

Last month, Termini’s Midway Rising project went before the City Council seeking to create a tax increment financing mechanism that would deliver hundreds of millions of dollars in taxpayer subsidies to help build Termini’s project. 

Termini admitted that, although his team includes Kroenke and billionaire NFL Dallas Cowboys owner Jerry Jones, the Midway Rising project is “not financially feasible without getting some of the infrastructure paid for.”

Termini is now partnered with at least three billionaires, but he still came back to taxpayers for more money. 

This tactic, however, is not new for Termini as did the same thing in Buffalo, New York, where he proposed a huge marijuana processing facility, gave campaign contributions, got millions in public subsidies, and then scaled back his project to a fraction of the original proposal. 

SDSU ARENA

Then, two weeks ago we discovered another twist in the story.

It turns out SDSU President Adela de la Torre, SDSU Athletic Director JD Wicker, and several prominent San Diegans had flown to Texas in May 2022 to tour the University of Texas at Austin’s Moody Center after that facility’s developer had offered to build a new indoor arena at SDSU West at no cost to taxpayers. 

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Curiously, the trip happened three months after SDSU officials had told the SDUT in February 2022 that they had no interest in such a deal.

No one had disclosed the trip until we published a story two weeks ago.

In response to our article, an SDSU spokesperson emailed us saying the trip was at the invitation of a donor, but then last weekend, the donor’s lawyer refuted that, saying SDSU’s Athletics Department asked for her private jet for the trip.

Adam Day, the Chief Administrative Officer at Sycuan, was a California State University system Trustee in 2022 and joined the SDSU officials on the trip to Texas.  

Day had told the SDUT in February 2022 that he didn’t know about any offers for a new indoor arena at SDSU West but that he would “love to hear more about it.”

But after the trip to Texas, neither Day nor former San Diego City Manager Jack McGrory, another CSU Trustee who went on the trip, said anything publicly about a potential deal to save taxpayers hundreds of millions of dollars on a new sports arena. 

Day later resigned from the CSU board in November 2022 because he had a conflict-of-interest when Sycuan became a partner in the MLS team that is now the highest-profile tenant of SDSU’s Snapdragon Stadium. Remember, Termini is his partner in that deal, too.

PRESENT DAY

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Within days of my initial requests for documents, SDSU responded that they had found responsive records related to the arena offer, but pushed their deadline to release the records until April 29.

Then this week, SDSU responded saying that they have no responsive documents related to any offer to build an arena in Mission Valley. 

It is not clear from their response whether there are no emails, proposals, or offers for the arena that they flew to Texas to discuss, or if they are withholding documents under some exemption of attorney-client privilege, deliberative process, or other way to keep information from the public even though they are a public agency.

A request for comment sent to the statewide CSU Chancellor asking what she knows about the offer has not been answered.

WHO KNEW WHAT WHEN

So who benefited from the lack of disclosure and public discussion of a potentially free arena in San Diego?

Maybe developers would have submitted different proposals had they all known about the possible arena. 

Maybe the City Council would have thought differently about which developer to select for the Sports Arena site had they known there might have been an alternative arena that would save taxpayers many millions of dollars and built an arena closer to freeways and the trolley instead of shoehorning it into the Midway area.

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Maybe a certain union labor leader helped influence the process to make sure her favored developer —and benefactor— got the deal he paid for. 

Several people have asked why it even matters if SDSU had received an offer for a free indoor arena and kept it quiet. 

Well, everything is a zero-sum game, as far as taxpayers are concerned. 

Whether the City or SDSU builds a new arena, the same taxpayers are on the hook for the costs when public funds are used to build any of these venues or through tax subsidies for private developers. It's just money from one pocket or the other.

We are not arguing that SDSU should have necessarily accepted an offer to build a new indoor arena in Mission Valley, but having kept it under wraps without public discussions may have affected how the City moved forward on another taxpayer-funded project at the Sports Arena site, and which group they selected to do it. 

But we do believe public officials owe a fiduciary duty to taxpayers to protect our public funds as if they were their own, even more so because they are not their own. 

The unmasking and unraveling of the 101 Ash deal happened more than three years after it had been signed, and many involved attacked the media for “beating a dead horse” when we wrote new stories looking back at the process that led to the disastrous deal. 

But it was the media scrutiny —not public officials— that revealed important aspects of the deal, like the fact that the City’s broker, Jason Hughes, received millions of dollars in hidden fees from the sellers and how insiders saddled taxpayers with a now-worthless building. 

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We should all be asking similar questions of who knew what and when about the arenas, and demanding full transparency from public officials and agencies. 

Seven of the nine members of the San Diego City Council have responded to requests for comment confirming they didn’t know about the possibility of an arena in Mission Valley, meaning they didn't have that information available when they chose Termini or now as they consider creating a tax increment financing mechanism to provide public bonds to help pay for his project. 

Council President Sean Elo-Rivera was out of the country and couldn't be reached by his staff to comment, and Councilmember Marni von Wilpert has not yet responded.

It is never too late for the public to know how their tax dollars are being spent, especially if they are being misspent to enrich wealthy developers and campaign donors. 

After the 101 Ash debacle, the discounted sale of Tailgate Park to the Padres which is embroiled in a lawsuit, and now this Sports Arena bidding controversy, taxpayers are right to demand more information and transparency before, not after, a bad deal is done.

There is now more than enough reason for the Mayor and City Council to fully examine and explain the Sports Arena deal before taxpayers end up on the hook for another expensive City real estate debacle connected to insider dealings and campaign contributions at the expense of taxpayers.

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