San Diego Loyal say they have been unable to find a suitable solution for a home stadium and will cease operations after playing its final season in the USL Championship this year, the club announced on Thursday.
Co-founded by U.S. men's national team legend Landon Donovan, who currently serves as the executive vice president of soccer operations, the club will fold after a four-season second-division run that began in 2020.
"Four years ago, Landon Donovan, myself, and our group of investors started on a journey to bring professional soccer back to San Diego. I'm very proud of what we've accomplished in the first three seasons," club chairman Andrew Vassiliadis said in a video.
"Over the last six months, myself, [president] Ricardo Campos and a small part of my team have been looking at all viable options up and down the coast for us to find solutions for [the] academy, for training facilities, for [a] stadium.
"From Oceanside down to the border, we've looked at everything and left no stone unturned. Unfortunately, after looking at all of that, I've come to the conclusion that this will be the last season for San Diego Loyal."
According to the USL, a "viable near- and long-term stadium solution in the market did not materialize" for the team that currently plays at the University of San Diego's 6,000 capacity Torero Stadium.
"Having a modern, commercially viable stadium solution is vital to our clubs' long-term success and is a pillar of the USL's growth strategy," said USL Deputy CEO Justin Papadakis in a league statement.
"Despite collectively pursuing multiple potential options with SD Loyal's leadership in the San Diego area, an appropriate stadium solution has not materialized."
The statement added that in "the coming months, the USL will provide more information about the transfer of the franchise rights."
A source told ESPN that the lease at Torero Stadium was "not favorable." Due to a USL Championship requirement that a team's home stadium must have a capacity of at least 5,000, the nearby soccer venue at U.C. San Diego would not have been eligible as a new home for the Loyal.
The decision to fold follows a May announcement from MLS that the city of San Diego would be given the league's 30th franchise. Scheduled to play home games at San Diego State University's 35,000-capacity Snapdragon Stadium, the top flight club will begin play in 2025.
The Loyal were reportedly not involved in the expansion bid.
In 2018, SDSU won a local election to redevelop the Mission Valley land that once housed the NFL's Chargers (now in Los Angeles) at the since-demolished SDCCU Stadium. A competing and similar measure put forward by Donovan, which focused on bringing MLS to San Diego through a "SoccerCity" initiative, lost the election.
The Loyal currently have a record of 10W-7D-7L and sit fifth in the USL Championship's Western Conference table. After the end of the regular season in October, the top eight from both the Western and Eastern Conference tables will qualify for the playoffs
Information from ESPN's Jeff Carlisle contributed to this report