San Diego: A Detailed Case Study
San Diego offers a different set of lessons—lessons which support the importance of political culture in urban renewal policy-making and also great insight into the next phase of western (and national) economic development. In San Diego the reader can see that urban renewal was simply a program (which was never actually used), a specific program among many to combat long-term central city downtown decline caused by sustained residential movement to its periphery (the threat of suburbanization) and sector shifts (in this case the decline of manufacturing and rise of service industry). The principal driver, as early as the late 1950’s, in this downtown revitalization were key business leaders who consistently put their money where their mouth was. Indeed, in San Diego’s case, the so-called growth coalition paid more than its fair share and arguably took on more risk than the city government. Still, in the end a charismatic mayor, Pete Wilson led a public-private partnership which in the early to mid-1980’s finally completed the project which successfully launched San Diego’s downtown revival—Horton Plaza—without urban renewal funds, but private investment and TIF as their main financing tools.
The backdrop underlying this snapshot is at the beginning of our story (1960) San Diego had nearly 575,000 residents—and by the end in the mid-1980’s it approached 1.1 million. San Diego became California’s second largest city during these years. As described in earlier chapters, San Diego typically focused its economic development strategy around attracting federal military facilities, tourism, and in World War II war production-related manufacturing. The real lift in population and manufacturing, however, came with the Korean War—the city attaining over a half million and the metro area over one million residents (by1960). Despite this huge growth and prosperity, the central city and its CBD were showing the first serious signs of decline in both population and retail sales in the late fifties. Population growth in San Diego as in most western states occurred simultaneously with growth in its suburban peripheries. In 1959, Convair in response to Defense cutbacks in its jet transportation program laid off over 29,000 San Diego workers—exposing San Diego’s lack of manufacturing diversification.
Despite noticeable evidence of CBD decline and the threat of suburban decentralization, the City’s primary 1950’s economic development entity, the Chamber seemed relatively unconcerned. The metro area clearly was in growth mode. Still, the need for downtown focus was evident enough that the Chamber in 1952 spun off the San Diego Downtown Association (SDDA) to organize/coordinate downtown merchants in their competition with suburban malls. Downtown retail sales were the principal benchmark for the SDDA and virtually all their initiatives focused on sales and making the downtown a convenient, safe and attractive place to shop (Dollar Days, Recognition Day, Window Display Contests). SDDA membership (235 in 1955) was primarily downtown merchants, professionals, small shopkeepers and manufacturers who for the most part were tenants with little concern other than for “immediate cash register sales”. Lower property values meant lower potential rents.
For some business leaders and CBD property owners this retail and aesthetic focus would not do the trick—would, over the long haul, be insufficient to compete with the new suburban malls. CBD physical redevelopment was, in their minds, a prerequisite for CBD primacy, if not survival. So SDDA established a committee (1956), headed by a prominent business leader, Joseph E. Jessop Sr. to develop recommendations. In this task, Jessop did not have the cooperation of either the City Council or the Mayor who fundamentally did not trust the business leaders and, above all, were reluctant to violate the area’s low tax culture by spending money to rehab the downtown.
So, with the SDDA more an anchor than a help, Jessop in 1958-1959 organized and incorporated a second downtown EDO, San Diegans, Inc., which was pledged to address the “economic health of the entire community [which] rested upon an alive, vigorous, aggressive core area in the heart of the city”.[1] Membership in San Diegans Inc was restricted to key and powerful business leaders “who had the authority to speak on behalf of their organizations without having to report to a superior”. They met five times and prepared a plan of action which centered on hiring a Chicago-based consultant to study the downtown. The sixth meeting, intended to approve the action plan/hire the consultant, was restricted to only those members who “brought their checkbooks”. Checks sufficient to hire the consultant and pay for SDI’s organization expenses for the next year meant that San Diego now had started its downtown revitalization process (1959).
The plan devised from the consultant study was fashioned into the SDI’s Centre City initiative. The initiative, while forging little new ground put more stress on an augmented tourist and visitor strategy for the downtown: it called for a new city hall, convention center, and a performing arts center cluster as the basis for an application for federal urban renewal funds. Conducting information meetings, travel to see the urban renewal efforts of cities such as Sacramento and Mexico City prepared the way for a formal urban renewal request to the City Council (1960). The first step in the urban renewal initiative/application was a formal city plan—which the Council agreed to fund in 1961. “Eight months later the City Planning Department unveiled a scale model of Centre City … the pivotal point … was the construction of a Community Concourse composed of a convention hall, a city hall, and a performing arts center [i.e. a traditional ‘City Beautiful’ style Civic Center]”.
The City council, on the basis of this scale model, purchased four blocks of the CBD and authorized a bond referendum to pay for the project. The referendum failed in 1962 (this was the fifth time San Diego voters failed to approve a referendum financing a convention center), refused to create an Urban Renewal Redevelopment Agency, and refused to authorize an application for urban renewal funding[2]. The city council, in reaction to the failure of the bond initiative, borrowed from city pension funds, but fell seriously short of raising funds sufficient to proceed. City Centre appeared still-born.
But at that critical juncture, SDI formed a fundraising committee and raised the additional funds needed for the project to proceed ($1.6 million). SDI gifted the funds to the city on the pledge that construction of City Centre would proceed. Construction on a new downtown civic center, Community Concourse began in 1962. Almost immediately $38 million dollars of pent-up private CBD building projects broke ground simultaneous with the Centre City project—and the skyline of modern San Diego came into place over the next three years (1965-1966). No request for federal urban renewal funding was ever made; instead, under SDI leadership the downtown core was being rebuilt with mostly private funds. But we have not completed our story.
Despite an aggressive annexation program (previous to 1965 the City had annexed over 305 square miles[3]) suburbanization still flourished as the city grew by leaps and bounds. In fact the city discovered that annexation as a growth strategy was a mixed bag. It did “capture population”, but typically at a considerable financial and budgetary cost. Newly annexed areas were usually under-infrastructured and under-serviced; improvements were costly and the politics subsequent to annexation disturbed existing coalitions and voting patterns[4]. Viewed in 21st century hindsight, these costs are seldom mentioned in regards to the critical role annexation played in western urbanization, but in the 1960’s a cost-conscious central city voter and city council member (which San Diego had certainly proven itself to be) was of two minds with an aggressive annexation as the City’s chief strategy to deal with suburbanization. Revitalization of the CBD, while on the policy back-burner with the completion of the City Concourse project, remained to some, a more attractive alternative.
A new business group, San Diegans for Progress thru Planned Development picked up on the SDI and City Planning Department plans and re-fashioned them into a new plan intended for an application for federal urban renewal funds. The re-jiggered plan to fight “blight in deteriorated areas” in and around the downtown was accepted by the City Council in 1965 and the whole shebang was submitted for voter referendum. The voters dutifully and consistently rejected the second urban renewal application and the city plan by 66,000 to 29,500. In the same referendum, the voters approved a baseball stadium “heavily dependent on federal funds to build freeways to the ball park”. Oh well! But business leaders again regrouped, formed a counterpart to SDI, the San Diegans for Progress thru Planned Development, picked up the city plan and submitted it (1966) to Mayor Frank Curran, who approved for a new referendum—with one deletion. All references to urban renewal and federal funds were removed. The San Diegans for Progress quickly hired a PR firm which developed the collateral materials and conducted the campaign. In November 1966, the referendum was approved[5].
The 1967 City Plan proved to be a success and provided a foundation for San Diego’s future growth management planning—but as a spur to CBD redevelopment, little happened. The Community Concourse/Centre City Project, meant to jumpstart CBD redevelopment, after the initial burst of construction, petered out. The CBD continued along its path of relentless decline—an island of decline in a sprawled, growing, economically diversified and prosperous central city and metropolitan area. In November, 1971, however, a young, liberal Republican Pete Wilson was elected mayor. San Diego urban renewal was about to enter its second phase.
“When I came to office you could fire a cannon down Broadway (Ave) five minutes after five o’clock and the old gag was you couldn’t hit anyone who wasn’t staggering” said the new Mayor. The CBD took another blow little more than a year later when its leading newspaper, the San Diego Union and Tribune, left its long-time Horton Square headquarters and moved to Mission Valley outside the CBD. Mayor Wilson’s agenda called for something called “growth management” or slowing development on the city’s periphery (to minimize costs in areas newly annexed) and pulling in new development in older, deteriorated and undeveloped blocks of already developed areas of the city served by underutilized schools and public services. To San Diegans Wilson’s growth management avoided the specter of ‘Los Angelization’; Wilson retained the mayor’s office until 1983, moving on to become Senator and two term Governor of California.
(T)o prevent the core blight which has afflicted other great American cities, we must turn to the task of revitalizing downtown San Diego. … [such revitalization should include] housing, and for cultural, educational, and recreational facilities to provide diversity of texture and experience among the office towers … We must commit to aggressively seeking major retail activity downtown. We must, in short, do whatever we can to make our downtown livable, rather than a place from which people flee at day’s end to the suburbs”[6].
Wilson talked up downtown with merchants and property-holders, developers and the private sector in general and in preparation for a reelection, he presented a plan to redevelop the “Centre City”. Shortly after (1976) he created the Centre City Development Corporation[7] (CCDC) to design, negotiate, and fund, and manage the hoped-for projects outline in his Center City Community Plan. Several key areas, Horton Plaza and the Gaslamp Quarter were priority target-areas. Immediately, the CCDC started negotiations with the Hahn Company and signed in 1976 a disposition and development agreement for a $73.5 million retail project on Horton Plaza. “The original deal committed [the CCDC] to assemble land, rebuild streets and utilities, expand the part in front of the site, and construct a 2,000 car parking garage”[8]. Well, so much for good intentions!. “
Before the ground-breaking [in 1985, nearly a decade later], the Hahn Company and the redevelopment agency amended the development agreement five times, reconfigured the site, changed the design a dozen times, and negotiated with numerous anchor department stores”.[9] To add to the fun, property tax-cap Proposition 13 (1978) was approved and Hahn Company was sold to the Canadian Trizec Corporation. A final last minute deal between Hahn and the CCDC arrived at a creative bond financing/purchase, transferred the garage to Hahn, and re-jiggered ownership of key land parcels in return for a city share of retail rents. Ground was broken in 1982 and by August 1985, Horton Plaza opened for business. Four department stores, 140 specialty shops, and restaurants, and a seven screen cinema, and two performing arts theaters eventually opened on its blocks. Its success stimulated both the Gaslamp Quarter revitalization and the westward extension of the CBD into Harbor Drive and the Columbus neighborhood. The capstone was a 1985 passage of a bond referendum for the San Diego Convention Center (it had been rejected a sixth time in 1981) which was then constructed by the San Diego Unified Port District.
And so there we have it. Twenty-five years after its start, the San Diego urban renewal era was essentially over. Without once having acquired or utilized federal urban renewal dollars, the private sector and government, in an on-again-off again partnership, started by and sustained by private sector leadership, EDOs and cash, at all times anchored by a city plan, but climaxed with leadership by a dynamic mayor, a new public finance system, and a quasi-government EDO, the downtown could properly be described as revitalizing. Without realizing it the reader observed the evolution of economic development structures during these years.
In essence, we started out with chambers as our dominant EDO and ended with a mayor-led, quasi-government redevelopment agency. That mayor devised and followed a new economic development strategy—a growth management strategy—which was a forerunner of a new concept of growth, emphasizing efficiency, quality of life, and minimal impact on the environment. But from this story it is very clear that this was not an “urban renewal era”—it after all ended in 1974– but rather a “downtown revitalization era” designed to counter the pernicious effects of a relentless suburbanization. Whether or not that had any effect on suburbanization, however, who can say? Was San Diego’s urban renewal story fairly typical of most western cities? In regards to the key issues identified as salient to our history, San Diego was reasonably typical.
The “late start”, the ignoring of the attacks on urban renewal by the Policy World in eastern cities, the core underlying strategy an attack on suburbanization, the evolution from chamber and private sector leadership to redevelopment agencies and shared private-public leadership, the close tie-in of urban renewal policy to politics that dominated the policy system, the underlying business constituency, and the increased salience of an unresponsive political limited government, low-tax culture to federal urban renewal dollars, the political and policy effects of simultaneous suburbanization, the limitations of annexation as an anti-suburban tool. In other respects, the San Diego case study shares with the East Coast the reality of a declining, obsolete CBD, the effects of early deindustrialization, and a central city unable to maintain uncontested dominance of its hinterland, the importance of a charismatic mayor and a committed vault-like, upper echelon business community/CBD property owners in physically redeveloping the central city/CBD, the notorious displacement issue resulting from physical redevelopment, and the local commitment to physical redevelopment independent of federal urban renewal dollars, and most importantly, the quest to retain primacy of the central city over its suburban hinterland as the core strategy/purpose underlying central city/CBD redevelopment. Also, the San Diego tale hints at future western issues such as the need for “growth management”, the increased importance of environment and quality of life in measuring economic growth, and the need to augment government capacity.
[1] Reiner M. Hof, San Diegans, Inc: The Formative Years, 1958-1963 the Redevelopment of Downtown San Diego in San Diego Historical Society Quarterly, Winter, 1990, Volume 36, Number 1, pp. 1-2.
[2] The key issue for voter rejection of the referendum involved the city’s use of federal funds which to them meant red tape, inefficient, more expensive and untimely construction of the project, and restrictions on how the money would be spent. This, on top of the traditional, unwillingness to raise taxes to pay of the issued bonds, conveyed to voters a sense that urban renewal meant of loss of the city’s ability to control and manage the project. See Reiner M. Hof, San Diegans, Inc: The Formative Years, 1958-1963, p. 4 and Anthony W. Corso, San Diego: the Anti-City, in Richard M. Bernard and Bradley R. Rice (Eds), Sunbelt Cities, op. cit., pp. 332-333.
[3] Anthony W. Corso, San Diego: the Anti-City, in Richard M. Bernard and Bradley R. Rice (Eds), Sunbelt Cities, op. cit., pp. 333.
[4] See John C. Bollens and Henry G. Schmandt, the Metropolis: Its People, Politics, and Economic Life (Joanna Colter Books (3rd Ed), 1970, p. 284.
[5]In the next year, subsidized with substantial federal funds ($2 million) San Diego launched a Great Society community planning initiative, and hired planners to develop neighborhood plans. At the same time, a Citizens Committee of 100[5] led by Bea Evenson, a community activist formed to pursue historic preservation, parks development, and cultural enhancement (preserve the 1916 World’s Fair buildings, for example) with great success—almost all of these activities were substantially financed with federal funds. Two points follow: (1) urban renewal and CBD redevelopment was not the only economic development-related program ongoing at this time; and, (2) the community did not reject the use of federal funds per se, but rather were especially discomforted with urban renewal program/funds.
[6] Pamela M. Hamilton, The Metamorphosis of Downtown San Diego, Urban Land, April, 1994.
[7] The Development Corporation was, in effect, Wilson’s lead agency at that time. For the next thirty years, the CCDC was responsible for the physical development of the city. In 2013 the Development Corporation, after a scandal, was merged with the Southeast Development Corporation, to create present day Civic San Diego.
[8] Terry Jill Lassar (Ed), City Deal Making (Washington D.C., the Urban Land Institute, 1990), p. 148.
[9] Pamela M. Hamilton, The Metamorphosis of Downtown San Diego, Urban Land, April, 1994, p. 2.
Ron W. Coan 