San Diego is advancing a proposed $4.2 billion redevelopment of 48.5 acres of city-owned land around the Pechanga Arena, with plans for thousands of homes, a new entertainment venue and major public infrastructure improvements. According to the City of San Diego’s official Midway Rising project page, the proposal includes 4,254 housing units, a 16,000-seat arena and new parks and public spaces in the Midway District. On October 16, 2026, the City Council’s Land Use and Housing Committee unanimously voted to advance the proposal, bringing the long-delayed project closer to consideration by the full City Council.
What the $4.2 billion redevelopment includes
The Midway Rising proposal aims to transform the existing Sports Arena property into a mixed-use neighbourhood combining residential buildings, entertainment, retail, parks and improved streets. The development team is expected to finance the estimated $4.2 billion project, which would replace the ageing arena and parking-dominated site with a more integrated urban district. The housing component includes 2,000 affordable homes and 2,254 market-rate units. The affordable housing allocation includes at least 200 permanent supportive housing units intended to serve people who need additional support to maintain stable housing.The plan also proposes up to 130,000 square feet of retail and commercial space, creating room for shops, dining and other businesses. The wider development is designed to make the area more walkable, improve connections to public transport and provide more public spaces for residents and visitors. The project is being developed by Midway Rising, a consortium that includes Zephyr, The Kroenke Group, Legends and Chelsea Investment Corporation.
A new arena and hundreds of millions for infrastructure
A central feature of the proposal is a new multipurpose arena costing an estimated $526.4 million. Designed to accommodate 16,000 people, the venue would replace the existing Pechanga Arena as the area’s main entertainment destination. The development also includes $460.3 million in infrastructure and public improvements. These are expected to cover street upgrades, pedestrian-friendly routes, parking facilities, parks and other improvements in and around the site. The plan provides approximately 14.5 acres of combined park and public space, offering recreational areas alongside the new housing and commercial development.Construction would take place in phases. The first phase is expected to deliver the new arena alongside affordable and market-rate housing. The existing arena would continue operating until its replacement is ready to open, allowing scheduled events to continue during the transition. The overall development is expected to take years, with the city’s Independent Budget Analyst estimating that full buildout could take about 20 years, although the developer has projected a shorter construction period of around 10 to 15 years.
Why the city is prioritising housing and public amenities
The proposal reflects a financial trade-off for San Diego. Instead of prioritising immediate rental income from its land, the city is seeking substantial private investment in affordable housing, entertainment facilities and infrastructure. Under the proposed arrangement, the developer would make investments upfront, while the city would receive revenue through arena ticket fees and rent from market-rate housing and retail as different phases are completed. The timing and amount of those payments would depend on construction progress and the project’s financial performance.The city has also proposed an Enhanced Infrastructure Financing District to help fund infrastructure costs. Under this arrangement, increases in property tax revenue above an established baseline could be used to reimburse eligible development infrastructure expenses over time. The city’s Independent Budget Analyst estimates that the developer could be reimbursed for up to $378 million of its infrastructure spending through the proposed financing district. The arrangement means the public benefits would be delivered before the city receives the full financial returns. The proposed agreement therefore includes provisions for oversight as the project progresses.
What happens next
The project has faced years of delays and legal challenges, including disputes concerning coastal building-height restrictions. In September 2026, California Governor Gavin Newsom signed legislation intended to help clear the way for the redevelopment while retaining environmental review requirements. The October 16 committee vote marks another important step, but it does not constitute final approval by the full City Council. The proposed development agreements and related financing arrangements must still move through the remaining approval process before construction can begin.If approved, Midway Rising would reshape a major city-owned property into a residential and entertainment district, with thousands of homes and significant public improvements. Its eventual impact will depend on whether the developer delivers the promised housing, infrastructure and public spaces while managing the financial and construction challenges of a multibillion-dollar project.