California Reformed CEQA. Why Are Major Projects Still Going to Sacramento?

In the final days of California's 2026 legislative session, lawmakers approved Senate Bill 344, legislation tailored to San Diego's Midway Rising redevelopment. The project calls for a new arena, about 4,250 housing units, and nearly 15 acres of public parks on the city-owned Sports Arena site.

SB 344 would let the project rely on an existing environmental review to comply with the California Environmental Quality Act and would reduce the risk of additional CEQA litigation. The Assembly approved the bill 72 to 2, and the Senate passed it unanimously. Governor Gavin Newsom has until September 30 to sign or veto it.

The vote adds another chapter to a project with substantial political support. San Diego voters twice approved measures to remove the area's 30-foot height limit, first in 2020 and again in 2022. Courts invalidated both measures because the city had not adequately completed the environmental review for the height-limit change.

Midway Rising therefore offers a useful lesson. Political support can be real yet still fail to produce durable project certainty.

In 2025, California adopted major CEQA changes through Assembly Bill 130 and Senate Bill 131. These measures created new exemptions and streamlining provisions for housing, infrastructure, advanced manufacturing, and other qualifying projects.

The reforms were significant. They were also general laws. Midway Rising shows why sponsors of large and contested projects may still seek something more specific.

The 2026 legislative session included several efforts to create or modify CEQA treatment for individual projects or categories of projects. Midway Rising was one of them. The pattern does not mean statewide reform failed. It does suggest that broad reform and project-specific political risk are two distinct problems.

A project can qualify for a more favorable regulatory framework yet still face litigation, local political pressure, ballot activity, shifting elected leadership, or disputes over the remaining approvals needed to build.

For project sponsors, that distinction matters.

A statute can address a specific legal risk. It does not resolve all political or procedural risks surrounding a major entitlement. Midway Rising still requires additional action in San Diego, including final agreements between the city and the development team. Opposition remains active, with neighborhood and environmental groups continuing to raise concerns about traffic, coastal views, birds, flooding, and the project's scale.

That is why a legislative victory should be treated as part of an entitlement strategy, not as the end of one.

The same principle applies to other high-visibility projects. A favorable vote by a legislature, city council, or planning commission is important, but public affairs work often continues after the vote. Coalitions need to remain engaged, and decision makers need continued political support.

Opponents may shift from one venue to another. New legal, electoral, or administrative challenges can emerge as a project moves toward construction.

Sponsors of major projects should plan for those overlapping risks early.

That means identifying the stakeholders who could credibly reopen a fight and understanding the tools available to them. It means maintaining coalition support after a key approval. It also means coordinating legal, political, community, and communications strategies so that one setback does not force the project team to rebuild support from the beginning.

The lesson from Midway Rising is not that project-specific legislation is the wrong tool. In some circumstances, it may provide exactly the certainty a project needs.

The broader lesson is that no single approval, exemption, or statutory protection eliminates political risk. California may have changed the CEQA landscape, but major projects still need durable public and political support across every stage of the entitlement process.

Land Use Strategies helps project teams anticipate political risk, build community support, and protect major entitlements through changing regulatory and political conditions. If your project is likely to require more than one path to approval, the strategy should be built before the next obstacle appears.