A city hall to match Horton Plaza

Whatever Ernie wants

Juliette Mondot: “When Horton Plaza opened, the public drunks from the central core were pushed into our area."
  • Juliette Mondot: “When Horton Plaza opened, the public drunks from the central core were pushed into our area."
  • Image by Randy Hoffman

San Diego may soon be getting a new city hall. Not just any city hall, but a “Capitol on the Hill,” beckoning its citizens with glamour and expense, equal to, say its planners, the city halls of San Francisco and Philadelphia, and even the state capitol, with its glittering dome of gold leaf. Standing astride the intersection of 12th and Broadway, the lavish edifice, costing at least $275 million, would be only an initial step in the development of an elaborate civic center “complex" intended to rejuvenate the east side of downtown.

Is the city hall idea an attempt to protect the dazzling success of Horton Plaza?

Is the city hall idea an attempt to protect the dazzling success of Horton Plaza?

That figure alone could amount to $89 million more than the city says it would cost to remodel the existing city hall, but developer Ernest Hahn, who created the wildly successful Horton Plaza shopping mall and who is now widely credited with pushing the new city hall proposal to the verge of breaking ground, says the huge expenditure can’t be avoided.

Robert Lichter: "Nobody was going to cross Ernie.”

Robert Lichter: "Nobody was going to cross Ernie.”

“The future of this center city," he proclaims in the soothing tone he has become known for, “is residential housing. Nobody has argued with that. It wasn't apparent that the east side would be a good residential area unless something was done to revitalize it. This project will make housing there possible. The city desperately requires it.”

12th and J streets at dawn. Centre City East, Mondot argues, has been used as "a dumping ground for Social Services."

12th and J streets at dawn. Centre City East, Mondot argues, has been used as "a dumping ground for Social Services."

There are those who disagree with Hahn’s notion that a costly new city hall is what is called for to stimulate a housing boom on the now largely run-down east side of downtown. Some business leaders, self-styled “citizen lobbyists,” and a few politicians argue that city hall is still needed where it is, at its present location in the traditional core near Third Avenue and C Street, two blocks east of the county courthouse and the federal office building and court complex and relatively near the county administration building on the bay.

Mondot: "The police action against the rampant crack trade just east of Gaslamp has pushed that population into our streets.”

Mondot: "The police action against the rampant crack trade just east of Gaslamp has pushed that population into our streets.”

Other observers, including real estate broker and developer Robert J. Lichter, charge that the city council has not bothered to carefully examine the fragile financial underpinnings of the project. “Council people have never really studied it — they don’t have the time, talent, or inclination to do so,” says Lichter. “The council persons are out in left field on this one, and there’s no way that their staffs could be competent enough to understand this stuff.”

Map of proposed city hall area

Map of proposed city hall area

The powerful and respected Hahn, adds Lichter, has upped the ante by making the city hall project a personal crusade, pitting his own credibility and media savvy against that of the oft-wavering council members. “Ernie had this thing in his teeth. Nobody was going to cross Ernie.”

Several current residents of the east side also take issue with the implicit assumption that a cluster of elaborate new public buildings is a panacea for the chronic problems of muggings, crack dealing, and street people that dominate the area.

Others, including council member Judy McCarty, question the expenditure of such vast sums of public money on an intentionally grandiose architectural monument during a period of purported city budget austerity.

“To take that much money out of the general fund to pay for a new city hall doesn’t make sense, especially when we are confronting such enormous outlays for secondary sewage treatment and the jailfunding crisis,” says McCarty. “I think there is a more cost-effective way of doing it. It might not be as glamorous, but for those of us who are paying, it makes more sense.”

These voices of dissent have been heard rarely, if at all, during the two years that the east-side city hall has been transformed from the ambitious dream of Ernest Hahn to the drawing boards of consultants and city staffers and on, perhaps, to final approval by the city council later this year.

Indeed, many of those who say they remain opposed to the project, especially those in the business community, will voice their reservations only in off-the-record conversations, fearing what they claim to be the possibility of retribution by Mayor Maureen O’Connor, next to Hahn probably the idea’s staunchest proponent.

Even Councilman Bruce Henderson, who according to his chief aide James Sills has been an ardent opponent of the project, declines to be interviewed. “He’s got all the numbers against it,” says Sills. “You can read it all in the public record, but this isn’t the right time for him to talk.”

Others who are more willing to speak out contend that the planning process itself has been deeply flawed, ignoring the well-known social problems of the area that, for better or worse, have been bequeathed to the east side of downtown by the very success of redevelopment to the west.

Notes Juliette Mondot, who with her husband is raising a family in the raw east-side neighborhood: “When Horton Plaza opened, the public drunks from the central core were pushed into our area. More recently, the police action against the rampant crack trade just east of Gaslamp has pushed that population into our streets.”

On one point, however, there is no disagreement: the city hall project will never face the voters. Big public spending projects, with the exception of the soon-to-open convention center, have a long history of rejection by San Diego electorates. Even the present city hall, built in 1965, was financed by the city employees’ retirement fund after voters repeatedly turned down general obligation bonds for the purpose.

The present proposal calls for the issuance of so-called “Certificates of Participation,” a somewhat exotic method of creating public debt that does not require a vote of the people but which, because of fluctuating interest rates, also makes the ultimate cost of the project difficult to gauge.

“That’s the main problem,” says Perry Ferguson, a business consultant who opposes the city’s current version of the project. “Something this big and this important to the city should be on the ballot. It would be easy enough for the city council to put it on, there’s an election coming up, but they would never consider it.”

Ferguson contends that without an election, it is difficult for most average citizens to read up on the issue and hence to have a role in its resolution. “There is no public scrutiny of this thing,” he argues.

“We have a quarter of a billion dollar city improvement, and everybody assumes that somebody else is taking care of the oversight.”

Councilwoman McCarty, who has voted consistently against the east Broadway project, maintains that the city has used a deliberately piecemeal approach to avoid confronting the ultimate cost of the civic center until there is little choice but to proceed.

In November, the council voted 6-2 to select the east Broadway site. Since then, it has approved expenditures of almost $400,000 to do such things as arrange a debt-financing plan, study the environmental impact of the complex, and even conduct a design competition to find an architect, all before the project is given the final green light.

Notes McCarty: “We just keep taking these little steps — a consultant here, a consultant there,” she says. "Only $25,000 or $100,000 at a time. But pretty soon you are committed. Right now it doesn't seem to be getting the play with the public it deserves, and when they find out. it may be too late.”

City staffers defend the hiring of consultants before final approval of the project as necessary to determine whether it is, in the last analysis, feasible. Says Deputy City Manager Maureen Stapleton: “If there is a radical change in any of those components, we would have to re-evaluate the entire project. The consultants are really there to assist us in looking at all the alternatives.”

But county Supervisor Susan Golding, who often finds herself at odds with the mayor, also questions the city’s methods: “I’m not saying I’m opposed to it. but if the city moves from where they are now [in the downtown core], I don’t know what that leaves behind. We need to examine it more closely.

“These decisions are being made without hearing from surrounding property owners. I have great respect for Ernie Hahn, but I don't think they should go charging off that way. I know many [members of the city redevelopment staff] who have grave concerns about what happens to places like the Gaslamp Quarter if the city relocates all of its employees to the east.”

Ferguson and his associate, architect Don Reeves, have been trying to convince the city manager to consider expanding the boundaries of the proposed east-side city hall project to encompass 60 acres. The two men have formed a small group that has argued, with no success thus far, that such features as a new downtown sports arena and the Starlight Bowl, now in Balboa Park, along with a large parking garage be combined into a sweeping civic center mall. “If they don’t start big in the first place, they will end up short of space in the long run. and it’s going to cost plenty more," says Ferguson. “The true cost is already tens of millions understated.”

For her part, Golding and other proponents of strengthening the existing governmental core insist that pulling the center of the city government farther away from the courthouses and other county offices will defeat her efforts to coordinate office and space usage between city and county, which presumably might result in more efficient use of tax dollars. Golding says she intends to question the city’s proposed move at the next joint meeting between the board of supervisors and the city council in the fall. Stapleton, though, is cool to the idea, saying, “The county is free to join us at east Broadway.”

If Ferguson, Golding. McCarty, or anybody else is to have any influence on the outcome of this muted debate, they will have to move quickly. After two years of planning, the city is eager to begin the project. Deputy City Manager Stapleton estimates that a final package will probably be ready for city council approval sometime late this year or early next. “When you begin issuing bonds, you reach the point of no return." she observes.

Why a new city hall in the first place? “We need the room," Stapleton says. “The city staff has grown at a tremendous pace, along with the growth of the city population. We re scattered all over the place in leased offices, and it’s very confusing for citizens to find the department they’re looking for.”

In fact, according to an independent study by Jack Templeton, former chief deputy tax assessor for San Diego County, the city budget grew 77 % in the nine-year period between 1980 until the present, from $291.7 million to $807.8 million. He notes that during the same period, the city’s population grew by only 24%. “Political people are comforted by the number of their employees. It gives them the security of tenure in office,” jokes Templeton.

Councilwoman McCarty recalls that the need to build a new city hall was originally justified on the grounds that the city was spending too much leasing privately owned office space for staff who couldn't fit into the city’s existing 12-story building. "We realized how much money we were spending on rent and told the [city] manager to get rid of that drain on the general fund,” she says. “(The city hall proposal] grew and grew and grew into what we have now: we’re just shifting all that general fund money from rent to equity and paying a premium for it.”

Such criticism bothers Boris Dramov. a relaxed, elegantly dressed architect who works for San Francisco’s ROMA Design Group, the firm that has already been paid $185,000 to evaluate alternative sites, financing schemes, and design concepts for the new civic center. “The new city hall will be a shining monument, a focal point, a functionally attractive, fully accessible civic center,” he contends. "A major civic improvement like this should be used to give the urban fabric a higher level of organization and order — to make the city more livable.”

At the outset of their study, Dramov’s group was told to look at three areas of downtown: city hall’s present Second Avenue and C Street location; the utility yards now owned by San Diego Gas & Electric at the comer of 12th Avenue and K Street close to the bay; and the ultimately selected four-block site in the vicinity of 12th and Broadway, just south of City College. During their analysis. Dramov and his colleagues were guided by the Centre City Planning Committee, a 25-member group chaired by developer Hahn and appointed by Mayor O’Connor to develop a new master plan for the development of downtown.

“Ernie Hahn said Centre City East was the new frontier,” recalls Dramov. "There was a historical trend of uses there not being as viable in this location as the rest of downtown. It needed a showing of commitment.” Hahn’s first choice for the civic center was the SDG&E location, but that idea was eventually discarded after ROMA determined that it was too far away from the center of downtown.

Observes Hahn: “I didn’t think the city would have the volition to go in and do the condemnation [of private property] needed to assemble the land [on east Broadway]. Since the SDG&E site was in a single ownership, I originally thought it would be easier to purchase. In light of [the disputed Southern California Edison takeover of SDG&E], it’s just as well we didn’t end up there.”

Dramov says he and his associates finally concluded that the existing city hall location and the proposed site at 12th and Broadway were about even on the scale of preferences. “We felt both sites would work, but the old location would have less potential for clarifying the image of Centre City,” he says. Hahn, of course, put his substantial clout behind east Broadway. “No doubt

about it,” says Dramov. “Absolutely, he kept it there. Ernie, in his ability to look at big ideas, is a godsend to San Diego.” There is, however, one big difference between the two locations: cost. According to a financial analysis done in conjunction with Dramov’s study, tearing down the old 1965 city hall along with the adjacent outmoded convention facilities and building an entirely new civic center from scratch would cost about $178.2 million, close to $20 million less than the $195.3 million that ROMA said it would cost to build the 850.000-square-foot first phase of the east-side city hall. ROMA attributed the difference to the higher cost of buying up private property and relocating the existing businesses near the 12th and Broadway site.

But when the second phase of the east Broadway proposal, which incorporates an additional 200,000-square-foot office building, is included, the cost differential between the two alternatives jumps to an astounding $89 million — a grand total of $275.3 million. This huge cost, along with a growing concern that the moving of city hall would weaken the city's core, attracted the attention of tow downtown business groups, San Diegans, Inc. and the San Diego Taxpayers Association.

Robert Lichter, the broker and developer who is president of John Burnham and Co., conducted his own analysis of the two proposals on behalf of San Diegans, Inc., and the results were not positive for east Broadway. “We did a preliminary letter asking. Why not do a major remodel of the existing [C Street) tower?” Lichter recalls. “Ernie Hahn was getting very pissed off at me because I was slowing up his train. That’s when [deputy city manager] Maureen Stapleton called and asked if we could get together.”

Stapleton and Hahn, fearing that the entire project might be derailed by the sudden opposition of the business groups, proposed that Lichter meet with city staff to work out some kind of compromise, under which he and his group would endorse moving the city hall to the east side — or at least remain neutral. As a result of those contacts, recounts Lichter, he drafted a letter to the city council in early January, spelling out what amounted to an agreement by the two business groups to remain on the fence.

In his letter, Lichter stuck to his original assertion that the cost of a new city hall on east Broadway would run about $275 million. On the other hand, he concluded, “remodeling existing facilities [C Street city hall], acquiring a [neighborhood office building], and constructing a new parking and office tower ... the high estimate ... could be in the range of $186,000,000."

But he determined that if the city leased out the old Community Concourse site and took other steps to increase tax revenue from the old location, the new site would cost “only” $6 million more than remodeling the existing complex. “Whether you elect to stay in place with the remodel alternative or move," he wrote, “we believe either choice is financially defensible.”

Then he added a warning: “We would caution you. however, that the key to the financial justification of the move is the city's ability to use the {Certificates of Participation] at the [interestj rates projected [his emphasis] and to generate at least $4 million in annual rent from the lease of the Concourse. If this proves unfeasible, the cost difference for east Broadway could become too onerous to support.”

Milton Clow, then president-elect of the Taxpayers Association, added that “the City ought to establish clear priorities for its capital improvements with a city-wide perspective before committing any additional general funds.”

Today Lichter marvels at the rousing reception his newly stated neutral position, laden with qualifications, suddenly won him among council members and the press.

“Before that letter, one of the newspapers had given me the onion award for being an ‘obstructionist.’ After the letter I went from being the bad guy to the champion [of the new city hall]. It’s almost laughable.”

During a recent interview, Hahn went so far as to claim erroneously that Lichter’s group “reversed their public stand and came out in favor of’ the east Broadway proposal after “Bob Lichter spent almost two months studying it.” In a January editorial, the Tribune announced that San Diegans, Inc. and the Taxpayers organization had “jumped on the bandwagon for a new civic center complex on east Broadway.” adding: “Endorsements from these two reputable organizations removes all organized opposition to the East Broadway Plan.”

Since January. Lichter hasn’t heard from Stapleton or anybody else at city hall, but he says that the project still needs to be monitored carefully. “I’m really derelict. I should have been the watchdog, but I just ran out of steam,” he notes. “The hope was that some of those caveats [in the January letter] would be adhered to, but I have no way of knowing what’s going on over there now."

One big risk for taxpayers, says Lichter, is the tendency for large public improvements to exceed their original budgets. The new convention center, for example, was originally estimated to cost no more than about $95 million when it was presented to voters for their “advisory" approval in 1983. Now nearing completion, it is coming in at about $60 million more than that. The tab for that building is being picked up by the San Diego Unified Port District, not local taxpayers, and hence does not adversely affect the city budget.

The $275 million debt for a new city hall, on the other hand, would be retired by money from a variety of sources: the general fund; hoped-for revenue from renting out the old city hall site to a private developer; and an annual repayment on about $64 million in “loans” the city made to its own redevelopment agency to help subsidize downtown projects like the Horton Plaza shopping center.

Under current plans, property taxes that would be collected on the private office building to be built on the site of the old city hall would also be diverted to help pay off the debt. Lichter seems especially dubious of the city’s ability to successfully turn that location over to a private user. "They have to pick the right developer and ward off other public agencies," he says. “Everybody [in local government] has got their talons out for cheap space. If they lose that source of revenue, they’re screwed.”

Lichter concludes that if the project exceeded its projected construction costs at any point or if interest rates rose above present expectations, the city council would be hard put to make up the difference in a way that would not require taking more tax money from the city budget. “If they can’t keep the cost of capital down,” he notes, “they are dead meat.”

About a mile away from Lichter’s suite on the 20th floor of the John Burnham building with its wall-to-wall view of San Diego Bay. Juliette Mondot lives with her husband and three young children in a modest Victorian cottage on the east side of downtown. Mondot and her husband have spent most of their adult lives living and working downtown, first in a loft in the Gaslamp Quarter and later at their current home, which they purchased in 1984.

Mondot, who has long been active in downtown development issues, is skeptical that a massive city hall complex on east Broadway will answer what she feels is the need for more attention to the severe social problems of the inner city. "I call it economic feudalism,” she says. Mondot contends that the successful redevelopment of the western portion of downtown, with Hahn’s Horton Plaza shopping mall as its crown jewel, was accomplished at the expense of the social stability of the east side.

“They have turned a residential area into a de facto refugee camp,” she observes, pointing to the sidewalk near her house, where several homeless people lie in squalor. Around the corner, in front of a rescue mission that was relocated from the Gaslamp Quarter as part of a city-financed effort to revitalize that area, an even greater number of transients congregate on the sidewalks and in the street. To encourage them not to defecate on the street, the city has installed porta-potties.

Though Hahn denies it. many observers of his east Broadway city hall initiative quietly argue that it is his attempt to protect the dazzling success of Horton Plaza — by pushing downtown's unsightly street people farther from its doors. “Nonsense.” avers Hahn, who notes that he no longer has an equity interest in the shopping mall, although he serves as a paid consultant to the company that does. “I don’t regard that as a conflict of interest.”

But whether or not the migration of homeless to her east-side neighborhood was intentionally caused. Mondot contends that merely shifting them from one part of town to another is not an adequate response by the city to the escalating problem. She complains that the bad planning of the past has already created a "low-end ghetto" of drug abusers and people living on the street. Centre City East, she argues, has been used as "a dumping ground for Social Services and as a human landfill for the problem people of the city.”

Of the 25 members of the Centre City Planning Committee, appointed by the mayor in 1987 to revise the 1976 downtown plan, only one, Glenn Allison, director of Episcopal Community Services, has a professional background in social work. Most of the rest are architects, planners, or business executives with ties to major downtown property owners.

Allison says he fully backs Hahn's city hall proposal. “Ernie Hahn is a visionary,” he proclaims. “He’s really trying to make downtown a place where people of varying means can have the amenities they would want to have.”

To Mondot’s assertion that the new center city plan should quickly address the specific problems of the east side, such as lack of sanitation and untreated drug and alcohol addictions of those roaming the area, Allison answers: “We are painting with a broad brush. The fine tuning comes later.”

Though Allison originally wanted to put the city hall on the old SDG&E utility yards to the southeast, he now feels the new building should be built at the 12th and Broadway site without delay. “How long a vision do you have? It’s not going to get any cheaper if you wait,” he observes. “Those who have vision will act. We can build something cheaper, but it will also be uglier. Visions cost."

Allison, soon to be ordained an Episcopalian priest, also defends the planning group from charges that it has acted without regard to existing social service agencies to be displaced by construction of the new civic center. The Salvation Army, in particular, claims that it was effectively locked out of the [planning process) and now is being forced to move its 100-bed Adult Rehabilitation Center, along with its main thrift store, to an as-yet-undetermined new location.

Observes Salvation Army spokesman George Molyneaux: “Where can we go that’s equivalent to what we already have? If we move, the city is jolly well going to pay for it. Since we’re the biggest single occupant of the area, we think they should have consulted us.”

Ten years ago, the city was required to put up the money to move the Salvation Army facility to its present location near 13th and Broadway in order to make room for Hahn’s Horton Plaza shopping mall. Today. Allison maintains that no social service provider, including the Salvation Army, should necessarily expect to remain forever in Center City East once redevelopment begins to occur there.

Even Father Joe Carroll’s Joan Kroc Center, the widely heralded $12 million center for the homeless at the comer of 16th Street and Imperial, would not be exempt, according to Allison. “I could envision in the future that [the Joan Kroc Center] would come to be regarded as an impediment to growth and development there,” says Allison. The cost to taxpayers of relocating the agencies, he maintains, “is not an issue. When it is functional and makes sense, the resources will be there.”

For his part, Carroll says he has no plans to move and in fact is now working quietly with City Architect Michael Stepner and some members of Hahn’s committee to develop a proposal for a ten-block “social campus” that would group many social service providers in a concentrated area in the vicinity of the Joan Kroc Center.

Notes Hahn, who thinks the idea has merit: “We’re trying to see if we can, over a period of time, gather some of these agencies that are scattered all over and get them into a social service campus. There are some 32 or so different ones. Some of them shouldn’t even be downtown.”

Allison, however, is adamantly opposed to the ten-block campus idea, contending that concentrating too many transients in one area would be self-defeating. "What scale campus?” he asks. “Thirteen hundred is too big. Eight hundred is still too big. Maybe you could make it 500; it might be the right size. You could have several. Then 1 don’t see any reason why City College couldn’t be one of those campuses. It could become a laboratory school, with dormitories, just like they were at a real bona fide school.”

The debate over the social fabric of the east side is destined to continue, Allison admits. The draft center city plan, while calling for the immediate construction of the new city hall, defers for up to five years a final resolution of the homeless and other social issues.

Indeed, the plan, unveiled in June, which refers to downtown as an “urban resort,” offering

  • everything from water taxis to trolleys, from street vendors’ hotdogs to haute cuisine, from shopping at Horton Plaza to gallery hopping along C Street, from avant-garde theater to the mimes in Balboa Park

makes no reference at all to the idea of concentrating downtown’s transients in a “social campus.”

When the Centre City Planning Committee put its stamp of approval on the new city hall scheme last October, only 14 of its 25 members turned out to hear the debate and vote, but 11 of them, including Allison, ultimately favored the east-side move.

One vote against was Scott Jones, whose family owns and runs Ace Parking, which operates enormous parking lots in the downtown area, including the ten-story parkade at the current Community Concourse, which it leases from the city.

The minutes of the meeting show that Jones, who declined to be interviewed, argued that the move east would “hurt the Centre City core.” That view is shared by Susan Carter, one of the few so-called “community activists” appointed to the panel. Carter, who represents Citizens Coordinate for Century Three, a nonprofit, volunteer planning advocacy group, contends that the current core is too “fragile” to withstand the exodus of the activity and employees who inhabit city hall.

“Moving it away would leave a big hole,” she insists. “I can look around the Concourse area now and see empty office space.” But although she voted against the Hahn plan. Carter says that the “goal to redevelop that eastern area is laudable.

We’re definitely in favor of the new civic center.” In the eyes of C-3, according to Carter, the cost differential between the two locations is “not really a factor.” Carter, however, also expresses support for quickly settling the question of how to finance and build a new central library, whose present facility at 8th Avenue and E Street is generally regarded as deteriorated and too small to serve the million-plus population of the San Diego metropolitan area.

In contrast to the advanced financing scheme for the new city hall, the question of how to pay for the new library is still unresolved. The city staff has argued that construction of the library on the campus of San Diego City College, just north of the proposed east Broadway city hall site, would save $4.4 million in land acquisition costs. But where the rest of the money would come from remains disputed.

Councilwoman Judy McCarty notes that the city manager’s office has been pushing a plan to sell general obligation bonds, requiring a two-thirds vote of approval for passage, to come up with cash for the library. “They want the library on the ballot, but not the city hall. I wonder why?” she asks, observing that G.O. bonds have a notoriously poor record of acceptance with San Diego voters.

Hahn, who lives outside the city limits on a sprawling estate in Rancho Santa Fe, far from the social ills of Centre City East, modestly denies having any special interest in the day-to-day progress of the civic center plan attributed to him. “Maureen Stapleton is calling all the shots,” he insists. “I’m not a political animal.”

Councilwoman McCarty, although an avowed opponent of the project, says she admires Hahn for his diligence and speculates that the city hall project may, in his own mind, be his last hurrah after decades of being the powerhouse behind literally hundreds of mammoth shopping centers scattered across the nation. “It’s like putting a big puzzle together for him; he’s gluing the giant pieces down where he wants them,” she notes. “There are people who look at any piece of land, no matter where, and say, ‘It’s underutilized.’ That’s just his personality.”

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