By Arturo Castañares
Editor-at-Large

San Diego State University has blocked a statewide university official from testifying under oath about his knowledge of an offer for a free-to-taxpayers sports arena in Mission Valley that was kept secret from the public for over two years and could have impacted the City’s current proposal for a taxpayer-subsidized arena in the Midway area.

Jack McGrory, a Trustee on the 25-member California State University (CSU) system Board and former City Manager of the City of San Diego, was subpoenaed for a deposition in a lawsuit filed by La Prensa San Diego in May after SDSU officials failed to turn over emails and documents requested under the California Public Records Act (CPRA).

Jack McGrory

 

McGrory was part of a nine-person delegation that flew to Texas in May 2022 to tour the University of Texas at Austin’s Moody Center which had been developed by Oak View Group under a 35-year lease where the university did not pay for the new arena and would begin receiving revenue-splits after the first 10 years.

SDSU objected to McGrory sitting for a deposition, claiming that the request “seeks information that is not relevant nor reasonably calculated to lead to the discovery of admissible evidence” and that it is “unduly burdensome, oppressive, harassing, and a misuse of the discovery process.”

McGrory was set to testify under oath after he described the details of the deal to La Prensa San Diego during a telephone interview.
 
FREE ARENA DEAL

La Prensa San Diego first published an article in March revealing that SDSU officials kept the details of a potential free arena hidden from the public for more than two years, but, at the time, LPSD did not have specific information as to which officials knew about the offer.

The offer had not previously been reported by any media outlet.

The story details how Oak View Group, a Denver-based venue operator that bills itself as “the largest developer of sports and entertainment venues in the world,” built Austin’s $380 million Moody Center under similar terms offered to SDSU.

A source in Texas confirmed that nine people traveled on a private jet to Austin to tour the Moody Center, including SDSU President Adela de la Torre; McGrory; 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; 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.

La Prensa San Diego filed several CPRA requests for documents, including copies of emails, memos, and the details of the offer made in mid-2022 by Oak View Group, but SDSU failed to provide any documents related to the offer, as well as emails sent to several recipients.

After LPSD broke the story, McGrory agreed to a phone interview to discuss the details of the trip and the offer made by OVG.

“I think the issue should be discussed publicly,” McGrory told La Prensa San Diego. 

McGrory said that, after the trip to Austin, OVG sent a deal memo to JMI Sport’s Eric Judson who maintains a consulting contract with SDSU. McGrory said he received a copy of the deal from Judson, but that he later lost the paper document.

The details of the offer were so interesting that McGrory contacted Tim Leiweke, CEO of Oak View Group, to discuss financial aspects of the deal that included the potential for SDSU to invest money into the arena and reap greater returns sooner than the original proposal which would not have required any investment from SDSU. 

Under the terms of the offer, a new sports arena would be built within the SDSU West campus that is currently anchored by Snapdragon Stadium. The site was purchased from the City of San Diego by the CSU system after voters approved Measure G in November 2018 as a plan to redevelop the former QUALCOMM Stadium site in the wake of the NFL’s Chargers jump to Los Angeles.

In addition to Snapdragon Stadium, the site plan approved by the CSU Board will include 4,600 residential units, 80 acres of parks and open space, 1.6 million square feet of office and research space, 400 hotel rooms, 95,000 square feet of campus retail, and 13,192 parking spaces. One of the major pieces within the project is a proposed $54 million river park.

Under the terms of the Oak View Group deal, SDSU men’s and women’s basketball teams would play at the new arena for free and the group would host concerts and other entertainment events throughout the year to recoup their investment. After the first ten years, OVG would split revenues with SDSU for the remaining 25 years of the deal.

All land use decisions on the 132-acre Mission Valley site are made by the CSU Board of Trustees, not the City of San Diego.

McGrory said that after La Prensa San Diego broke the story in March he contacted Oak View Group to see if they were still interested in developing an arena in San Diego. An OVG official told McGrory they remain open to a deal here but that some of the costs would have to be adjusted for current market conditions after more than two years have passed since the original offer.

WHO KNEW WHAT WHEN?

McGrory told La Prensa San Diego that he contacted San Diego Mayor Todd Gloria’s office after the 2022 trip to Texas to inform them of the potential deal, but that Gloria’s response was to discourage McGrory from pursuing the free arena in Mission Valley because the City was already planning to move forward with selecting a developer for the existing Sports Arena site in the Midway area.

Todd Gloria

 

Just a few months later, Gloria pushed the City to select developer Brad Termini to enter into an exclusive negotiating agreement to pursue the Midway sports arena site.

As La Prensa San Diego has previously reported, sources within the City of San Diego complained that professional staff were not allowed to thoroughly vet Termini’s proposal before he was selected because the Mayor’s office had already decided who would be chosen from the three final development bidders.

Two years earlier, Termini had donated more than $100,000 to Todd Gloria’s 2020 election campaign.

Brad Termini

 

During the selection process, other development experts raised concerns that Termini’s proposal was too big to fit on the available City-owned parcels, and that his plan was unrealistic and unfeasible to build.

At the City Council’s Land Use Committee meeting in September 2022 where Termini was selected, union leader Brigette Browning spoke in favor of the proposal, specifically supporting the project over the two other competing development teams even though all three bidders had agreed to build their plans under project labor agreements, known as PLAs.

Brigette Browning

 

"I would really like to acknowledge that all of the projects have signed agreements with organized labor," Browning said while testifying before Councilmembers, "and they're all good projects, but we believe that because Midway Rising has the highest number of affordable housing units and it will create the most number of permanent union jobs, it is absolutely the best project to go forward," Browning added.

Browning, who is considered the most powerful union leader in San Diego, was referring to permanent hotel jobs which would be included in the 200-room hotel proposed by Termini.

But Browning did not disclose at the time of her public comments in support of Termini’s team that her husband, political consultant Daniel Rottenstreich, had already been paid over $200,000 to promote the Midway Rising project.

Daniel Rottenstreich

 

Termini’s initial proposal included 4,250 residential units, including 2,000 affordable units and 250 middle-income units for working families that would not qualify for the income-restricted units.

The proposal also included a 200-room hotel, 250,000 sq. ft. of commercial space, and 20 acres of plaza and park space.

But the main feature of Termini’s plan is a proposed 16,000 seat sports arena to replace the existing facility currently known as Pechanga Arena.

Although Termini committed not to flip the project to another developer, he quickly announced a deal to sell up to 95% of the project to Stan Kroenke, the billionaire owner of the NFL’s LA Rams and the new SoFi Stadium in Carson.

Then last year, Termini’s team announced they found out a 96-inch water pipe cuts under the existing Sports Arena site and now limited the space available for development.

In response, Termini immediately cut the 200-room hotel and the 250 middle-income units out of his proposed project.

City staff and representatives from the two other development teams confirmed they knew about the underground water pipe during the bidding process.

Although Browning is the president of the local hotel employees’ union, she did not protest the elimination of the hotel that directly impacted her members.

Additionally, Browning failed to file a financial disclosure form with the US Department of Labor that is required when union leaders have a conflict of interest with issues that come before them.

Not only was Browning required by federal law to file the disclosure but she should have also recused herself from participating in supporting the project her husband was paid to promote.

The prospects of a free sports arena in Mission Valley would have been a direct competitor to Termini’s proposed project because, according to arena development experts, the region would not support more than one new large facility.

After the trip to Texas, supporters of the Mission Valley site hired local architecture firm Carrier Johnson to develop site renderings for the proposed arena.

Several local leaders were briefed on the proposal and shown the architectural plans, including San Diego City Council President Sean Elo-Rivera who reviewed the renderings in December 2023.

An email from Elo-Rivera’s office in April 2024 confirms that the Council President saw “the renderings for the proposal in December 2023.”

Sean Elo-Rivera

 

The other eight members of the San Diego City Council denied having seen or being briefed on the free arena proposal before La Prensa San Diego first reported on it in March.

But since receiving the December 2023 briefing, Elo-Rivera has not mentioned the proposed free sports arena during City Council meetings where Termini’s Midway Rising project has been discussed, including during public meetings Elo-Rivera led and voted to advance a proposal for taxpayer-funded property tax bonds to help pay for tens of millions of dollars in infrastructure costs for Termini’s project.

Elo-Rivera is currently running for re-election to his City Council seat and has been endorsed by Browning’s San Diego-Imperial Counties Labor Council.

In the March election, Elo-Rivera garnered 51.9% of the vote against two challengers, and will now face off with retired US Marine Sergeant Major and former SDPD officer Dr. Terry Hoskins.

Terry Hoskins

 

All nine members of the San Diego City Council, as well as Mayor Todd Gloria, have been endorsed by Browning’s powerful union group.

La Prensa San Diego's lawsuit will continue with discovery and scheduled depositions of SDSU officials with knowledge of the arena offer and related documents.