In August, the San Diego City Council repealed Measure C under court order, which put the 30-foot coastal height limit back in place across the Midway District. Six weeks later, the city published deal documents for a project on the Sports Arena site with residential buildings up to 105 feet, a few up to 250 feet, and an arena as tall as 165 feet.
The height limit is still on the books. Midway Rising just no longer depends on removing it. Its case for building taller now rests on California's State Density Bonus Law, so the question has moved from a citywide ballot to a housing statute written in Sacramento. If you live in Loma Portal or Point Loma Heights and drive past Pechanga Arena every week, that change matters more than any single vote this fall.
Two Ballot Wins, Two Court Losses
Voters have approved taller buildings in the Midway District twice: Measure E in 2020 and Measure C in 2022. Both were thrown out on the same grounds. Judges found the city had not properly studied the environmental effects of lifting the limit. In the Measure C appeal, the court pointed to gaps in the analysis of noise, air quality, biological resources and geology.
The California Supreme Court declined to review the Measure C ruling on December 30, 2025, which ended the city's appeal, as the San Diego Union-Tribune reported in January. The formal repeal followed on August 24, 2026. Councilmember Jennifer Campbell, whose district includes Midway, told the council she disagreed with the rulings but that the city had no choice. "We must do it, and if we don't, we will be in contempt of court," she said, according to KPBS.
So the limit came back intact. None of the 2026 materials point to a third ballot measure.
The Route Now Runs Through State Housing Law
On April 30, 2026, the California Department of Housing and Community Development sent the city's Development Services Department a letter of technical assistance. HCD said the whole Midway Rising site, arena included, can be treated as a single mixed-use housing development under the State Density Bonus Law. That makes it eligible for the concessions and waivers the law gives projects with deed-restricted affordable homes.
The city had asked how far it could waive the 30-foot limit. HCD concluded that enforcing the cap would physically preclude the project, meaning both the required arena and the more than 4,000 homes. Under density bonus law, that conclusion is what supports a waiver. You can read the full HCD letter, which Voice of San Diego published.
The letter has limits. It is guidance, not a permit. HCD left the processing to the city, which has to act on the density bonus request no later than the issuance of any building permit that relies on it. The letter also says its conclusion turns on this project's specific facts and does not decide whether any other property qualifies.
The two state bills Gov. Gavin Newsom signed on September 29 fit into this picture, though neither one lifts the height cap. Here is what each piece does:
| Measure | What it did | Effect on the 30-foot limit |
|---|---|---|
| Measure E, 2020 | Voter approval to exempt Midway | Overturned in court |
| Measure C, 2022 | Second voter approval | Overturned; repealed Aug. 24, 2026 |
| HCD letter, April 30, 2026 | Says the project can seek density bonus waivers | Limit stays; project seeks a waiver |
| SB 344, signed Sept. 29, 2026 | Makes the project's environmental report conclusive for CEQA reliance | None directly |
| SB 958, signed Sept. 29, 2026 | Bars height alone from counting as a significant CEQA impact for qualifying projects | None directly |
The bills go after the argument that sank both ballot measures. Measures E and C both failed under the California Environmental Quality Act. SB 958 says that for qualifying projects, the environmental effects of added height alone cannot be treated as significant under CEQA. SB 344 makes Midway Rising's specified environmental report conclusive for CEQA purposes and requires its mitigation measures to be enforceable and reported every year. The bill took effect immediately as an urgency statute, but its provisions become operative only on its effective date or the City Council's certification of that report, whichever comes later.
Put together, density bonus law supplies the reason the project can be taller, and the two bills are meant to keep that reason from being undone the way the ballot measures were.
What the October 16 Hearing Covers
The city's Midway Rising project page lists the master Disposition and Development Agreement and related lease documents for the Land Use & Housing Committee on Friday, October 16, at 1 p.m. Full City Council consideration would come later. Ground leases can't be signed until the council approves.
The program in the current staff report:
- 4,254 homes, including at least 2,000 deed-restricted affordable units, at least 200 of them permanent supportive housing, plus 2,254 market-rate homes
- A 16,000-seat, 380,000-square-foot multipurpose arena
- Up to 130,000 square feet of retail and commercial space
- 8.2 acres of parks and 6.42 acres of public space
The proposed community plan change would also redesignate the site from Community Commercial, at up to 44 homes per acre, to Community Village, at up to 72 homes per acre.
The committee agenda includes a separate item: a resolution of intent to form an Enhanced Infrastructure Financing District, which sends a share of future property tax growth to pay for public improvements. The city's consultant, Keyser Marston Associates, estimated the district could bring in about $1.16 billion to reimburse roughly $462 million in infrastructure costs, according to the Union-Tribune's October 9 report. That district matters a great deal. The agreement gives the parties alternative-financing or termination rights if the public financing isn't set up as described.
The Old Arena Stays Open Longer Than the Headlines Imply
On October 1, a Midway Rising spokesperson told KPBS the team hoped to have "shovels in the ground at the end of next calendar year in 2027," assuming council approval this fall. The phasing plan released a week later sets a later schedule. According to the Union-Tribune, it is built around a 2029 construction start:
- 2029: Horizontal site work begins once financing is in place.
- Through 2031 or 2032: First phase of utilities, roads, transportation upgrades and parks on the eastern half of the site, up to a new street called Frontier Drive.
- 2032: Vertical construction starts with the new arena.
- 2033 and 2034: Market-rate and affordable housing construction begins.
- 2050: Projected full buildout.
Pechanga Arena keeps operating until the new venue is built. The current arena is torn down only in a later phase. The council approved an interim lease extension on September 29 that runs to December 4, 2031, or ends sooner if the horizontal ground lease closes. That lease keeps about $2 million a year in rent flowing to the city, with minimum rent going up 3% each year.
The phasing also ties affordable homes to the market-rate buildings in each of the five vertical phases. The first phase requires 249 affordable units, and the developer's current model shows 500 affordable units alongside 386 market-rate ones.
For anyone west of Rosecrans, the site will look much the same for several more years. The arena keeps hosting events, the parking lots stay, and the first visible change, if the schedule holds, is infrastructure work on the eastern half of the property.
What Remains Unsettled
Several pieces still have no answer:
- Kobey's Swap Meet. City reports note that weekend swap-meet activity uses part of the surface parking. The draft agreement handles existing site leases and licenses through termination notices on a performance schedule. It does not name Kobey's or commit to keeping it running during construction or relocating it. No current public source says how long it will stay.
- Litigation. Save Our Access, the nonprofit that sued over the Midway height limit, told KPBS it will keep looking at ways to challenge the project. No new lawsuit had been reported as of this writing.
- Financing conditions. Norm Miller, a real estate professor emeritus at the University of San Diego, told the Union-Tribune the deal "is not ripe right now, but in two years maybe it will be," citing market-rate apartment yields of about 4% on cost against a 5.24% Treasury rate. He said the project doesn't pencil without the infrastructure district and several hundred million dollars in low-income housing tax credits.
- The waiver itself. HCD's letter supports the density bonus approach, but the city still has to process the actual waiver request before it issues any building permit that depends on it.
The 30-foot limit is still law in the Midway District. Whether 105-foot buildings go up beside it now depends on a density bonus waiver, a financing district that hasn't been approved, and a council vote that hasn't happened.
A project at this scale on the peninsula's eastern edge raises fair questions about timing, sightlines and nearby blocks. Justin Halbert follows the Midway Rising approvals as they happen and can talk through what the phasing schedule might mean for your street. Schedule a Strategy Call when you're ready.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
