San Diego Officials in CEQA Exemption Talks for $4B Midway Rising: Breaking News January 27, 2026

What Is CEQA and Why Does an Exemption Matter?

The California Environmental Quality Act (CEQA) is the state's landmark environmental protection law that requires government agencies to identify and mitigate the significant environmental impacts of projects before approving them. For major developments like Midway Rising, CEQA compliance typically involves preparing detailed Environmental Impact Reports (EIRs) that analyze effects on air quality, noise, traffic, biological resources, and other environmental factors.

The problem for Midway Rising is that the California 4th District Court of Appeal ruled in October 2025 that the city violated CEQA when it put Measure C before voters in 2022 without sufficiently studying the environmental impacts of removing the 30-foot height limit. The appellate court identified four specific areas where the city's supplemental analysis was inadequate: noise, air quality, biological resources, and geological conditions. When the California Supreme Court denied the city's appeal on December 30, 2025, it exhausted the city's legal options to overturn that ruling.

A CEQA exemption would allow Midway Rising to proceed without completing the full environmental review process that courts found lacking. This is significant because environmental litigation can delay projects for years or even kill them entirely. If the state legislature grants an exemption, it would remove the primary legal obstacle that opponents have used to challenge the project, potentially clearing the path for construction to begin much sooner than the late 2026 estimate developers provided when assuming they would need to complete additional environmental studies.

The SoFi Stadium Precedent: Will History Repeat in San Diego?

San Diego's strategy is modeled directly on the successful CEQA exemption that California granted for SoFi Stadium in Inglewood. In 2015, state lawmakers specifically exempted the SoFi project from CEQA requirements, allowing the $5 billion stadium and entertainment complex to move forward on an accelerated timeline. The project broke ground in November 2016 and was completed in time for the 2020 NFL season, despite initial opposition from environmental groups who argued the project would cause significant traffic and air quality impacts.

The SoFi precedent is particularly relevant because Stan Kroenke, the billionaire owner of the Los Angeles Rams who developed SoFi Stadium, is now the majority investor in Midway Rising. Kroenke Group's investment gives it a 90% stake in Midway Rising, increasing to 95% when construction starts. Having successfully navigated the CEQA exemption process once, Kroenke and his development team understand the political relationships and legislative strategies needed to secure similar treatment for Midway Rising.

California has granted CEQA exemptions for other major sports and entertainment projects as well. The Golden 1 Center in Sacramento received legislative relief in 2016, and several other stadium projects have utilized loopholes or targeted legislation to circumvent CEQA requirements. This pattern suggests that when projects promise significant economic benefits, job creation, and affordable housing components like Midway Rising's 2,000 affordable units out of 4,254 total housing units, state lawmakers are willing to expedite approvals through CEQA exemptions.

However, opponents argue these exemptions set dangerous precedents that undermine environmental protections. Environmental groups have criticized the stadium exemption pattern as evidence of CEQA's inconsistent application, where well-connected developers can bypass requirements that bind other projects. Whether San Diego can replicate the SoFi success will depend on the project's ability to secure political support in Sacramento and demonstrate that economic benefits outweigh environmental concerns.

How CEQA Exemption Could Accelerate the Timeline

The CEQA exemption strategy could dramatically compress Midway Rising's timeline in three key ways. First, it eliminates the need for the city to prepare a revised Environmental Impact Report addressing the four deficiencies identified by the appellate court. Completing a comprehensive EIR typically takes 12-18 months, including public comment periods, revisions, and certification by the City Council. By skipping this process, the project could move straight to final approvals.

Second, a CEQA exemption would cut off one of the primary legal strategies available to project opponents. Without CEQA compliance requirements, groups like Save Our Access would lose their strongest grounds for filing lawsuits to block or delay the project. While opponents could still challenge the project on other grounds, the absence of CEQA review removes the issue that has already resulted in successful court challenges and years of delays.

Third, the exemption could allow the city to move forward with Mayor Todd Gloria's announced spring 2026 timeline for City Council approval. At his January 15, 2026 State of the City address, Mayor Gloria committed to bringing Midway Rising forward for public hearings and a City Council vote in spring 2026. Without a CEQA exemption, this timeline would be challenging because the city would need to complete environmental studies first. With an exemption, the spring 2026 vote becomes feasible, potentially allowing groundbreaking by mid-to-late 2026 rather than late 2026 or 2027.

The developers have stated they anticipate breaking ground in 2026 if approved, and industry observers note the soonest groundbreaking could occur is the end of 2026. However, if the CEQA exemption passes the state legislature and the City Council approves the project in spring 2026, construction could potentially begin in summer or fall 2026, advancing the timeline by several months compared to scenarios requiring additional environmental review.

What Homeowners Need to Know: The 10-Year Construction Timeline

Midway Rising represents one of the largest construction projects in San Diego history, with a 10-year phased construction timeline that will transform the 48.5-acre Sports Arena site and surrounding Midway District. The project includes 4,254 housing units, a 16,000-seat sports arena to replace the aging Pechanga Arena, 130,000 square feet of retail and dining space, a hotel, childcare and healthcare facilities, and over 14 acres of parks and open areas.

For homeowners in Point Loma, Ocean Beach, Bay Park, Loma Portal, Sunset Cliffs, and Roseville-Fleet Ridge, the 10-year timeline creates significant uncertainty about property values and quality of life. While major developments often boost property values in the long term once completed, the construction phase typically depresses values in immediately adjacent areas due to inconvenience, noise, and aesthetic impacts. Historical studies of major urban construction projects show that homes within a half-mile radius can experience 5-15% value suppression during active construction, with recovery occurring only after completion.

The phased construction approach means different impacts at different times, but community planners have already raised concerns about how the redevelopment will affect traffic patterns, available parking, noise levels, and air quality throughout the construction period. Ocean Beach residents, whose main access route passes directly through the Midway District along Sports Arena Boulevard and Midway Drive, face particular exposure to traffic delays and construction disruption that could add significant time to daily commutes during peak construction phases.

Point Loma property owners face a different concern: the premium real estate market in Point Loma, where median home prices reached $2 million as of January 2026 according to Redfin, could see price sensitivity as luxury buyers opt for neighborhoods without active construction nearby. Ocean Beach properties, with median prices around $1.42 million, may experience similar buyer hesitation as the scale of nearby construction becomes apparent.

Impact on Point Loma and Ocean Beach Property Values

The property value impact of Midway Rising will vary significantly by proximity, property type, and market timing. Point Loma properties, particularly those in the Point Loma Peninsula area where median sale prices reached $1.5 million in January 2026, face a complex valuation scenario. Properties with direct views of the Midway District could see values affected by visual impacts as high-rise buildings up to 85 feet tall replace the current low-profile Sports Arena, while properties farther from the site might benefit from the area's overall revitalization and new amenities.

Ocean Beach faces different dynamics. With median home prices around $1.42 million and a bohemian beach community character that contrasts sharply with high-density urban development, Ocean Beach homeowners worry that Midway Rising will fundamentally change the area's appeal to buyers who value the neighborhood's laid-back vibe. Local community members have expressed concerns about traffic impacts, height and density changes, and development approach.

Bay Park and Loma Portal properties may experience the most positive long-term impacts. These neighborhoods sit close enough to benefit from new amenities, restaurants, and the economic activity a 16,000-seat arena brings, but far enough to avoid the most severe construction impacts. Real estate analysts studying San Diego's major 2025-2026 developments noted that areas benefiting from improved infrastructure and job growth but not yet experiencing significant appreciation offer strong potential.

The wild card is timing. If you're considering selling, the period before construction begins offers the best opportunity to sell at current market values without the stigma of active construction. Once construction equipment arrives and neighbors experience the first phases of demolition and site work, buyer perception shifts and price negotiations often favor buyers who demand discounts to compensate for construction inconvenience.

Why Cash Buyers Offer the Fastest Exit Before Construction Starts

If you've decided to sell before Midway Rising construction begins, timing is critical, and cash buyers offer the fastest path to closing. Traditional home sales in San Diego currently take an average of 42 days on market plus 30-45 days for escrow, meaning a conventional sale could take 2.5-3 months from listing to close. Cash buyers can close in as little as 7-10 days, with most closings completed within 21 days.

Several established cash buying companies operate in the Point Loma and Ocean Beach areas. Companies like I Buy SD offer instant offers and closing in as little as one week, while others like OveraskSD advertise closings in 10 days. Most cash buyers complete transactions within 21 days. These companies purchase homes as-is, meaning you don't need to make repairs, stage the property, or manage showings during the sales process.

The as-is component is particularly valuable for homeowners who have deferred maintenance or whose properties need updating to compete in Point Loma's premium market. Point Loma's $2 million median price reflects a market where buyers expect high-end finishes and modern amenities. If your property needs significant work to meet those expectations, the cost and time to prepare it for traditional sale could be substantial.

Cash buyers typically offer 50-70% of a home's retail value, following industry guidelines. While this is less than retail value, it's immediate, certain, and allows you to relocate before construction impacts your neighborhood. The certainty factor becomes increasingly valuable as the Midway Rising timeline accelerates. If the CEQA exemption passes and the City Council approves the project in spring 2026, construction could begin by summer or fall 2026. Homeowners who wait to see what happens may find themselves listing properties in a market where buyers know major construction is imminent, giving those buyers leverage to demand significant price concessions or walk away entirely.

Mayor Gloria's Spring 2026 City Council Vote: What to Expect

Mayor Todd Gloria's January 15, 2026 State of the City address provided the clearest timeline yet for Midway Rising approval. Gloria announced he would bring the project forward for public hearings and a City Council vote in spring 2026, covering both the city's lease deal with developers and approval of an environmental impact report. This commitment came despite the California Supreme Court's December 30, 2025 denial of the city's appeal, with Gloria stating that failure is not an option for the project.

The spring 2026 City Council vote represents a pivotal moment for the project and surrounding neighborhoods. If approved, the city's exclusive negotiating agreement with the Midway Rising development team, currently extended through December 4, 2026, would convert into a final development agreement, triggering the conditions for construction to begin. The Kroenke Group's stake would increase from 90% to 95% upon construction start, demonstrating the investors' confidence in the project moving forward.

Public hearings preceding the vote will likely be contentious. The project has divided San Diego residents between those who see it as essential economic development bringing 4,254 housing units including 2,000 affordable units, and those who view it as overdevelopment that threatens coastal character. The environmental impact report that accompanies the City Council vote will be critical. If the state legislature has granted a CEQA exemption by spring 2026, the environmental review requirements may be streamlined. If not, the city must present an EIR that addresses the four deficiencies the appellate court identified: noise, air quality, biological resources, and geological conditions.

The Density Bonus Law Alternative Strategy

While the CEQA exemption represents the city's preferred strategy, developers have also argued they can proceed under California's state density bonus law, which allows projects with significant affordable housing components to receive waivers from local zoning restrictions, including height limits. Midway Rising includes approximately 2,000 affordable housing units out of 4,254 total units, representing nearly 50% affordable housing, which would qualify for substantial density bonus benefits under Government Code Section 65915.

The density bonus law underwent significant updates effective January 1, 2026. Recent legislative changes made technical adjustments to maximize housing production while limiting commercial floor area increases in mixed-use projects. These changes affect how developers can structure projects to claim maximum density bonus benefits while still including substantial commercial components like Midway Rising's retail space and hotel.

Midway Rising developers have stated that even with the 30-foot height limit restored by the courts, state density bonus law allows them to build the project as designed. The law provides up to 50% additional density above base zoning and mandates concessions or waivers from development standards that would physically preclude construction of the affordable housing units. In this case, developers would argue the 30-foot height limit physically precludes building 4,254 units on the 48.5-acre site, justifying a waiver to allow buildings up to 85 feet or higher.

However, opponents including Save Our Access have indicated they would challenge any attempt to use density bonus law to circumvent the voter-approved height limit. This would likely result in additional litigation that could delay the project even if the CEQA exemption succeeds. The dual-track strategy of pursuing both a CEQA exemption and density bonus waiver gives developers multiple paths forward, but also creates continued uncertainty about timing and ultimate project approval.

FAQ: Midway Rising CEQA Exemption and Property Values

Conclusion: Time to Act Before Construction Begins

The January 27, 2026 announcement that San Diego is pursuing a CEQA exemption for Midway Rising represents a pivotal shift in the project's timeline. Following the SoFi Stadium precedent, with Stan Kroenke's proven ability to navigate CEQA exemption politics, and Mayor Gloria's commitment to a spring 2026 City Council vote, construction could realistically begin by summer or fall 2026—months earlier than previous estimates.

For Point Loma and Ocean Beach homeowners, this compressed timeline creates urgency around property decisions. The window to sell before a 10-year construction phase begins may be narrower than you thought. Historical data shows that homes within a half-mile of major construction experience 5-15% value suppression during active construction, with recovery only after project completion.

Cash buyers offer the fastest exit strategy for homeowners who decide to sell before construction begins. With 7-21 day closing timelines compared to 2.5-3 months for traditional sales, and no financing contingencies to create uncertainty, cash offers provide certainty when timing matters most. Whether the CEQA exemption succeeds or the project moves forward under density bonus law, Midway Rising is coming. The question is whether you'll sell at today's values or wait until construction impacts are priced into your property.