Ace friend seeks Horton Plaza deal

Mall's collapse could prove costly for taxpayers

Horton Plaza: Vacant storefronts bear witness to the collapse of brick-and-mortar retail.
  • Horton Plaza: Vacant storefronts bear witness to the collapse of brick-and-mortar retail.

Downtown's Horton Plaza shopping mall, which used millions of tax dollars to level acres of historic buildings in the late 1970s, has itself been hollowing out of late.

Pete Wilson statue in Horton Plaza.

Pete Wilson statue in Horton Plaza.

Multiple levels of vacant storefronts bear grim witness to the collapse of brick-and-mortar retail in the age of the Internet and the drawn-out failure of current mayor Kevin Faulconer to handle the crisis.

Scott Jones of Ace Parking in joint venture with Stockdale Capital Partners who are looking at Horton Plaza.

Scott Jones of Ace Parking in joint venture with Stockdale Capital Partners who are looking at Horton Plaza.

Insiders say it's been clear for years that the shopping center, opened by Pete Wilson backer Ernie Hahn in 1985, would ultimately fall to the wrecking ball, at a sizable but as-yet-disclosed cost to taxpayers.

Steven Yari, co-founder of Stockdale Capital Partners with his brother.

Steven Yari, co-founder of Stockdale Capital Partners with his brother.

E-mails retrieved from Faulconer's office under the state's public records act show that two years ago the city conducted confidential talks with representatives of mall proprietor Westfield America and its registered lobbyist, Southwest Strategies, regarding a public subsidy deal.

Shawn Yari has drawn criticism regarding his company's developments in once-sleepy downtown Scottsdale, Arizona.

Shawn Yari has drawn criticism regarding his company's developments in once-sleepy downtown Scottsdale, Arizona.

"On behalf of our client Westfield, we are requesting a meeting between Mayor Faulconer and Bill Hecht, the Chief Operating Officer of Westfield America," lobbyist Chris Wahl emailed the mayor's office on June 3, 2016.

"The purpose of this meeting would be to provide the Mayor with an update on: 1.) Major tenant plans at Horton Plaza 2.) Development plans for Horton Plaza and Mission Valley 3). Opportunities to streamline permit requirements at [University Town Center].”

Records reveal that Westfield was seeking to reach an "incentive agreement" with the city regarding redeveloping the downtown property.

"In connection with Westfield’s ongoing discussions with the City regarding Horton Plaza, please see the attached clean and marked Economic Development Incentive Agreement," wrote Douglas Praw of Holland & Knight, Westfield's law firm, on July 7, 2016. "We look forward to working with you on this transaction."

The shifting proposal, let alone its existence, have not been shared with the public, but the emails suggest that at least one proposed subsidy plan was thwarted by 2016's Proposition H, which routed sales tax growth to infrastructure spending.

"I just wanted to make sure you’re aware that if approved by the voters the proposition may, as a whole, adversely affect the Westfield [incentive agreement] as currently structured," city attorney deputy Katherine A. Malcolm emailed city development director Erik Caldwell.

"The City, on an annual basis, would have to find the remaining 50% from somewhere else, likely the general fund, to meet its obligation under the [incentive agreement] or be in breach of contract."

Now comes L.A.’s Stockdale Capital Partners which, per an April 19 disclosure filing by lobbyist Southwest Strategies, is seeking "Horton Plaza land use entitlements related to redevelopment of the site." The same document shows that Southwest is also lobbying on behalf of Westfield regarding "economic development strategies related to Horton Plaza."

Stockdale's website identifies the partners and co-founders of the firm as Steven and Shawn Yari. According to accounts in the Arizona Republic, Shawn Yari has drawn criticism regarding his company's developments in once-sleepy downtown Scottsdale, Arizona. In one case Yari fired back with a March 2012 defamation suit against Bill Crawford, president of the Association to Preserve Downtown Scottsdale's Quality of Life.

"Crawford has been a critic of Yari and his developments and is opposing his latest proposal for Scottsdale Retail Plaza, a restaurant, nightclub and retail complex with an indoor-outdoor beach club," the Republic reported in April 2012.

Though the new would-be developers are from out of town, they are tied to a famous local family of parking lot proprietors who are generous political donors to city campaigns.

“Stockdale Capital Partners has purchased a 241-stall garage at 350 Beach Street in San Francisco’s Fisherman’s Wharf neighborhood,” said a Stockdale news release last September.

“This is the second parking acquisition completed by the Los Angeles-based investment firm for its institutional joint venture formed late last year with Grosvenor Group and San Diego’s Ace Parking Management

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Public Hearings should be required. These back room deals and shifting or diverting of public funds to private businesses were crucial factors in the City's Pension Crisis....Funds were diverted from general revenues to pay for pet projects. Pension payments were not made for years and years and years... When the aggregate and amortized interest and payments not made ballooned, then public employees were blamed for mismanagement by the City Manager, City Council, Mayor and "city professionals".....

The Horton Plaza Improvement Project was approved in November 2012. Major art installations were also planned (but not funded at that time). It later went over budget, and took at least a year longer to complete. Westfield was supposed to put on all types of events, like they do at the well-attended Pioneer Square in Portland, OR. But it didn't happen as planned. Then the homeless moved back into Horton Plaza, stores closed, and the whole thing fizzled like a wet firecracker. At the time of approval, then-councilmember Kevin Faulconer called it a “great project."

Just like every politician....Tell a lie over and over and people will believe it’s the truth.

or it turns off more voters with the thought their vote ( voice) does not count.

The shopping mall has been a disappointment from the start. Pete Wilson was convinced that bringing retail back to downtown San Diego was the key to a renaissance there. And so, for many years he expended energy, time and political capital in selling the idea to a reluctant city and city council. It wasn't easy to find a developer who had faith in the success of a mall there either. Finally, with many financial inducements, Ernie Hahn was enticed into becoming the developer of the mall. He wasn't well-regarded, especially in the construction industry, and that was key in that he was his own general contractor.

Pete and other boosters expected the activity generated by the mall to spill over into the surrounding blocks of downtown. That did not happen. More than ten years after the mall opened, on a Saturday most of the stores along C Street (a mere block away) were closed. They depended upon the office workers in the high rise towers for trade and on Saturday there were too few to be bothered staying open.

Many customers disliked the layout of the mall, which was most unconventional. Others disliked the parking arrangements, although there was plenty of parking. But some folks really liked it, due to its unique layout and appearance. But as it was, the mall was at best an island of retail activity in a sea of indifference. It didn't provide a nucleus for rebirth of downtown into something other than an office tower ghetto.

For me, it is no surprise that it is on the ropes. Most malls in the county are on the wane, with only two that seem to be enjoying anything like prosperity.

"an island of retail activity in a sea of indifference"

What a great quote! Thank you!

Return it to its pre-Wilson state, bum housing

They should pay for their own crony-capitalist mistakes.

And Repubs criticize Dems for incentivizing green energy businesses and calling it "picking winners and losers".

Repubs do the exact same thing only it is usually "crony capitalism"..

Isn’t the Mayor looking for low income housing sites?

Ironic because Ace parking recently lost their parking management contract at Horton plaza to another parking company.

I'm just surprised that these large retailer-based shopping malls still exist. Shopping online eliminates traffic, parking, dealing with strange people, etc. The only thing online shopping doesn't provide is the face to face social aspects of mingling among large groups of people, eating bad food on dirty tables, and the movie theater experience, oh, and walking around, but anyone should be able to walk around near where they live.

With the recent closures of several key large retailers, you'd think shopping mall owners would at least take the hint and focus on diminishing the hassles and enhancing the positives of shopping in a mall. Movies and meals should be discounted, parking always free or heavily discounted, etc.

Does anyone really expect shopping malls to continue to exist in their current form even twenty years from now?

Many malls have already converted to office space. That works due to good locations and lots of parking. Converting to housing is not so easy, so demolition would probably happen. Maybe Manchester can do that for Horton Plaza. Oh wait.......he can't even fund his Navy property project!

There will be some malls, and a few will be great successes. Just how that will happen isn't clear yet, but people may return to them for the social experience and to buy things that need to be tried on or fitted or tasted or . . . Westfield is making a big bet on UTC and on Nordstrom, which itself is making a big bet on the all-new building they now occupy there. That is in a highly affluent area of the city. The other mall that still seems to do well is Fashion Valley with Nordstrom, Neiman-Marcus, and Bloomingdale's on the high end. But so far little is happening there in the way of investment. The rest of them in the county are in decline. So, will they exist in their current form? No. Their current form in most cases isn't the way they started out in the 50's and 60's.

Palm Springs demolished its enclosed mall, Desert Fashion Plaza, after it had remained empty for many years. It was never a big success. When anchor tenant I. Magnin moved out, the end was near. Time will tell if its new shops and a Kimpton hotel will do well.

[begin rant #27] Malls have never been about practicality. They have never been about providing stuff that you need. They are about fashion, ego. They are about food, drinks, movies and entertainment. They are about psyching people up to spend more than they can afford for things they don't need. Try to buy a hammer or an air filter for your car or a textbook for the kid or a peanut butter sandwich.

If every mall in America closed today, nothing would be lost. Other outlets can provide blue jeans, summer dresses, gym shoes and lipstick at a reasonable price without the glitter and fake glamor.

But if a real social experience became possible at a mall, like it is in our splendid Balboa Park or a school PTA meeting, it could make them viable. I think there's a hunger for rewarding social interaction. [end rant #27]

That was the plan for the new and improved Horton Plaza. But Westfield never came through with their part of the plan. They should be sued.

just another one of those everyone knows whats going on, but can't do anything about it. ( or in this case won't do anything about it)

Worse, San Diego will end up with an UNFINISHED concrete and steel Skeleton instead of Seaport Village.....

Seaport Village brings in the tourists, while Horton Plaza does not.

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