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Moreover, although city negotiators were not satisfied with the project plan, they postponed
decisions on design issues. The developer on the other side was taking risks as he was
uncertain whether the city will built the promised convention center and housing units. In fact,
construction of the convention center did not begin before Horton Plaza was opened in 1985.
The entire project is characterized by a significant mutually dependent construction
overlapping that can be considered as substantial different from the “control style of urban
renewal” (Frieden; Sagalyn, 1989:140). The argument that development deals are never final
was proven in San Diego. The Horton Plaza experience also shows that DDAs are partnership
agreements that allow some flexibility. Horton Plaza is a story of steady change. During the
development project several concessions on both sides had to be made. Several deals
including the profit-sharing agreement on rental income and on net cash flow from office
space as well as the parking agreement led to a complex deal between the developer and the
city. All together, “[...] the Hahn Company and the redevelopment agency amended the
development agreement five times, reconfigured the site, changed the design a dozen times,
[...]” (Hamilton, 1994:2). The essence of the deal is summarized by Frieden and Sagalyn as
follows: “As far as city negotiators were concerned, Hahn could have his redesign in
exchange for taking over increasing financial responsibilities for the project” (Frieden;
Sagalyn, 1989:150).
While becoming co-investor in the Horton Plaza project, the city adopted a highly
entrepreneurial style of urban governance. San Diego did not use federal renewal funds for the
Horton Plaza project. Nearly half of the city’s costs ($15 million) came from tax-increment
bonds (Frieden; Sagalyn, 1989:160). The Horton Plaza TIF district was defined in 1974 and it
has raised an exceptionally large amount of money into the coffers of the Horton Plaza
project. Moreover, CCDC received a loan of $9.5 million from the city (Frieden; Sagalyn,
1989:162). The rest of the city’s costs came from the project itself through land sales to the
developer, temporary leases of land and interests revenues (Frieden; Sagalyn, 1989:162).
According to Pamela Hamilton, Executive Vice President of CCDC, the city and CCDC are
receiving about $4.4 million in annual revenues from Horton Plaza at the moment; about $1.5
million in tax increment on average, about $100,00 on average in participation from overage
rents and about $2.8 million in sales tax. However, if one net out what the debt service would
be on the $33 million in bonds sold to cause Horton Plaza to occur (about $2.4 million in
annual debt service), then there is about $2 million in net revenues. All together, the city and
CCDC have received about $30 million in net revenues to date and the rate of increase in net
revenues is expected to grow.18 The substantial increase in tax-increment is largely due to
office building and hotel development. Thus, the City of San Diego has been very successful
with its equity participation approach in this joint venture. Horton Plaza is also considered a
successful product of government and private co-development by the city and CCDC as well
as some scholars (e.g., Trimble and Rogel, 1983). For the purpose of this paper, Horton Plaza
illustrated best how the city adapted entrepreneurial strategies in urban development by taking
risks and becoming financially involved in the project in order to revitalize its neglected
downtown. According to the proposed typology in II.D.4, the Horton Plaza redevelopment
project is a model of a formal, downtown-based public-private partnerships for economic
development.
The Ballpark project is an even bigger co-development project than the showpiece joint
venture Horton Plaza.19 The Ballpark is also a redevelopment project though it is not a
separate redevelopment project area like Horton Plaza. It is situated in the Central City
Redevelopment Project area and is managed by CCDC as well. The Ballpark project is more
than its name lets assume. In addition to a baseball stadium which is going to be built by the
18 Phone interview with Pamela Hamilton on the 21st of December 2000
19 One can find a lot of information about the project including some agreements on the following web page:
www.ci.san-diego.ca.us/ballpark