The 48 acres of city-owned land near Pechanga Arena in the Midway District is once again being advertised to would-be takers, albeit with the state of California now watching to ensure that San Diego adheres to a newly prescribed process for disposing of what’s considered surplus land.

Monday, the city of San Diego published what’s called a “notice of availability,” alerting affordable housing developers registered with the state that the city is ready to lease its parcels at 3500, 3250, 3220 and 3240 Sports Arena Blvd.

The action marks the official start of a second solicitation process. It also starts a 60-day countdown for interested bidders who must this time propose a redevelopment plan that includes at least 25 percent of proposed housing units set aside for lower-income families.

“Issuing the notice of availability is an important first step as we restart this process to redevelop the Midway District and bring more affordable housing units online for San Diegans,” said Penny Maus, who is the city’s director of real estate and airport management.

San Diego’s sports arena site has been on-and-off the market since February 2020, when the city first went down a more traditional solicitation process that culminated with Brookfield Properties being picked to remake the property. The developer pitched an all-new sports arena, housing, parks and retail, but made no formal commitment to build subsided units.

Brookfield’s proposal was scrapped in June after California’s Department of Housing and Community Development, or HCD, said the city should have first offered the site to affordable housing builders. The agency is charged with enforcing a recently amended Surplus Land Act, and, earlier this year, finalized its rulebook for how to offload excess government-owned land that is offered for sale or lease.

The notice of availability released Monday is light on details and primarily highlights that the property is on the market with a few restrictions.

“The city of San Diego is providing notification that the city intends to lease the surplus property … on the condition that future development of the property includes renovation or replacement of the city’s existing and operational current sports arena,” the three-page letter states. “The city encourages entities to incorporate development of as much affordable housing as possible in their proposals to the city.”

Otherwise, the document includes a table with high-level zoning information. The site allows for a total of 2,112 units, although a developer would be eligible to build double that amount, or 4,224 units, if the plan includes affordable units that are between 600 square feet and 800 square feet. It also states that building height requirements in the Midway District, which were eased by voters last year to allow for buildings higher than 30 feet, are being challenged in court.

Prospective bidders have 60 days to respond to the notice, meaning they have through Dec. 3 to submit a letter of interest. Then, the city will negotiate with all interested parties meeting the notice’s requirements during a 90-day period, likely starting on Dec. 6.

The state’s rubric for evaluating multiple proposals is open-ended, although the city must give priority to teams offering the greatest number of affordable units at the lowest average affordability level. At a minimum, interested parties must propose to build 25 percent of housing units for lower-income households.

The selection process is expected to extend into the second half of 2022, as the city’s Land Use and Housing Committee and the full council are expected to weigh in on multiple proposals and recommend additional due diligence or public outreach.