Pete Wilson takes the stage at the August 1985 grand opening ceremony for Horton Plaza. The late Ernest W. Hahn is behind him.

Horton Plaza shopping center started operating 20 years ago with its future — symbolically and literally — hanging in the balance. As part of its grand opening ceremony Aug. 9, 1985, an acrobat walked a high wire strung 80 feet above the plaza of the new mall. He stopped at midpoint, sat slowly on the wire and lowered a pair of scissors for the ribbon cutting.

It seemed fitting to launch Downtown San Diego’s most ambitious redevelopment project to date with a daring aerial act. For Horton Plaza developer, the late Ernest Hahn, had walked a fine line to make Horton Plaza a reality, balancing the interests of customers and retailers, urban renewal officials and historic preservationists.

There were plenty of skeptics who thought the $140 million project would struggle or fail. After all, Hahn — with strong support from former San Diego Mayor Pete Wilson — had created a 900,000-square-foot shopping island in a sea of neglected buildings south of Broadway. Most San Diego residents shopped near their neighborhoods, often at Hahn’s popular suburban malls. Would suburbanites really come back Downtown to Horton Plaza?

The mall’s planners and builders counted on an unusually innovative and fun design by architect Jon Jerde — plus ample validated parking — to reel in the customers. The strategy worked from the get-go. At the mall’s unveiling, thousands showed up, even though many of the stores and the movie theater had not opened yet. “Once the people got into the space, they weren’t quite sure why there were 49 shades of different colors or why the hippopotamus topiary was there,” says John Gilchrist Jr., then chief executive officer of Ernest W. Hahn Inc. “But I think they realized it was a one-of-a-kind retail entity.”

As the Westfield-owned and operated center marks its 20th anniversary this month, the uniqueness of this open-air festival marketplace — the intangible “it” factor of Horton Plaza’s atmosphere — is still attracting between 25,000 and 35,000 visitors a day.

Not only did the mall succeed as a retail and entertainment center, it helped propel Downtown San Diego into its phenomenal redevelopment boom. In turn, the redevelopment generated more business for Horton Plaza. “Horton Plaza re-established that there was a market for well-done retail in an urban atmosphere,” says Bill Shrader, senior vice president of the Burnham Urban Retail Group. “It actually started the wave of this new urbanism that is so much in vogue now in basically every major city in the country.” Without Horton Plaza, Downtown San Diego would have redeveloped anyway, says Shrader, but at a much slower pace.

The concept of the Horton Plaza shopping center began to take shape in 1972, when the city approved a 15-block Horton Plaza redevelopment plan. At the time, Downtown civic leaders were bemoaning the bedraggled state of the Centre City, which steadily worsened after Downtown stores followed residents into the suburbs. Mayor Wilson, too, wanted to reverse the urban decay and evict Downtown’s less reputable denizens. In 1974, the city chose the Ernest W. Hahn Inc. over the Rouse Co., which submitted a rival proposal designed by renowned architect Frank Gehry.

Opening ceremonies saw John Gilchrist, left, then chief executive officer of Ernest W. Hahn Inc., and Ernest Hahn being interviewed.

Hahn was best-known for building regional malls in the suburbs, including Fashion Valley, Parkway Plaza, University Towne Centre and North County Faire in San Diego County. Yet he was no stranger to urban renewal. His company had completed nine malls in California and Utah redevelopment areas before ground was broken for Horton Plaza.

Some complained later that Hahn engaged in a bait and switch. In 1975, the year that the city created the Centre City Development Corp., its urban renewal arm, Hahn tossed out the design that won him the job. In its place, he presented the city with a Horton Plaza shopping center design that critics faulted for being “fortresslike” and too suburban. The redesigned mall proposal would be enclosed and air-conditioned. It would have an ice skating rink. Two years later, Hahn hired Jon Jerde, an architect he knew from his work on the Pasadena Plaza. Jerde created his own firm, the Jerde Partnership, to take on the Horton Plaza commission.

Jerde lobbied for years for a shopping center with Old World European influences, while Hahn was preoccupied with lining up department stores. Although two major chains — Buffum’s and Ward’s dropped out — Hahn was able to persuade Mervyn’s, Nordstrom, the Broadway (now Macy’s) and Robinsons to open in Horton Plaza.

With the anchor tenants secured, Hahn turned Jerde loose, allowing him to design an open-air, vertical shopping mall with pedestrian bridges connecting four levels, plazas, walkways and arcades. It would rise on 6.5 blocks between First and Fourth avenues, G Street and Broadway. A Jerde memo in the summer of 1982 quoted Hahn as telling the architect, “This damn place (Horton Plaza) should have as little resemblance to a typical shopping center as possible. I don’t want to see a bench, a tree grate, a handrail or anything else that has ever been used before. I want it utterly unique!”

Design was only one of many issues that complicated the project before its 1982 groundbreaking. Preservationists, for instance, had raised public consciousness about the historic buildings on and around the construction site, and lawsuits flew. Ultimately, in the Horton Plaza redevelopment district, renewal officials decided to save the Irving Gill fountain in Horton Plaza Park, the Golden West Hotel, the Balboa Theatre and the Spreckels Building. The Horton Grand Hotel was relocated, and the Lyceum Theatre was demolished. However, a new 750-seat performance space was created below the Broadway Circle entrance to Horton Plaza. The Knights of Pythias Building and the Bradley Building were demolished. Their facades were recreated in the new center.

Not only buildings were in the path of Horton Plaza’s bulldozers. CCDC had to relocate 229 permanent residents and 58 businesses.

Meanwhile, Hahn and CCDC had struggled to put together financing for their public-private partnership. To get Horton Plaza off the ground, the renewal agency wound up spending more than $35 million for land acquisition, debt service, relocations and other site preparation expenses.

On the bright side, CCDC boosted its tax increment revenues by including the new Federal Building site in the Horton Plaza redevelopment project area. Owned initially by a private developer and leased back to the federal government, the property remained on the tax rolls and generated millions for the Horton Plaza project, notes David Allsbrook, the CCDC’s manager for contracting and public works.

But CCDC’s tax revenues took a tumble drastically in 1978 as California voters passed Prop. 13, a property-tax-cutting measure. When the agency could not finance construction of the crucial Horton Plaza parking garage, Hahn agreed to advance $15 million of his own money for the garage project. Even so, Prop. 13 was a double-edged sword, lowering tax revenues flowing into the city but giving huge tax breaks to the Hahn company and Horton Plaza’s land-owning private tenants. Gerald Trimble, CCDC’s executive vice president at the time and its master negotiator, says that in the wake of Prop. 13, CCDC was able to double the annual payment required of Horton Plaza department stores.

There were other financial jolts along the path to construction. Interest rates were soaring in 1980. In 1981, San Diego voters rejected one Downtown convention center proposal, forcing Hahn to persuade potential department store tenants that the ballot defeat was only a temporary setback.

In 1980, Ernest W. Hahn Inc. was sold to Trizec, a Canadian company, but Hahn remained deeply involved in the Horton Plaza project. “Unforeseen events led to a series of crises, and there were several times when the project looked hopeless and Hahn had legitimate reasons to drop out,” states a study of Horton Plaza done by the Massachusetts Institute of Technology’s Center for Real Estate Development. “Instead, Hahn saw Horton Plaza as one of the greatest challenges of his career and was willing to work cooperatively with the city whenever the project was threatened.”

Former Mayor Pete Wilson addresses spectators on opening day.

Gilchrist, now with the Corti Gilchrist Partnership, agrees that the personal commitment of the key players made the difference. “Ernie and Pete (Wilson) were the driving forces who said this needs to happen and it’s going to happen.”

Once the shopping center opened, Trimble says that some on the City Council thought their work was done. He told them, “We’re not finished. Take advantage of what has been created here and do other things Downtown.” Two years after Horton Plaza opened, Trimble left CCDC. For the past 14 years, he has been the vice president and San Diego managing partner of Keyser Marston, a financial analysis consultant for redevelopment projects.

Before Horton Plaza was built, Hahn had long preached that Horton Plaza would flourish if it was one element in a mosaic of redevelopment, ranging from a new Downtown convention center to new residential construction. Time supported his contention. In the past two decades, the pieces of redevelopment puzzle began to fall into place. The Gaslamp Quarter, formerly an X-rated entertainment wasteland, came to life with restaurants and nightclubs. The convention center was completed, the ballpark built and residential housing took off.

Despite its overall success, Horton Plaza remains a work in progress. The Horton Fourth Avenue apartment complex was ingeniously built to conceal the unsightly parking garage at F Street and Fourth Avenue, but a hotel proposal that would complete the G Street side of the complex is tied up in litigation and yet to be built. The long-awaited Balboa Theatre renovation is under way and due for completion in 2007.

The mall has had to cope with the ups and downs of its retail tenants and the shifting trends in the marketplace. In the 1990s, the center lost Robinsons-May, forcing redevelopment of a major space on the Broadway side of the mall. The changes enabled the movie theater to expand to 14 screens. An escalator was added, making it easier for Gaslamp pedestrians to ascend to the movie theater level. Not everything worked, though. Planet Hollywood caused a big splash when it opened in 1995 in the space fronting Horton Plaza Park. The venture fizzled a few years later. The former Robinsons structure is currently occupied by Sam Goody’s music store and smaller boutiques and shops.

Horton Plaza also lost many of its original local tenants. Among them were Bill and Joan Keller, who after nine years in Horton Plaza moved their Le Travel Store into the Gaslamp Quarter in 1994. Keller says he and his wife decided to leave Horton Plaza when their rent and common space charges reached $11,000 a month for their 3,000-square-foot space. They were able to purchase a 10,000-square-foot building in the Gaslamp Quarter for $645,000 and Keller never looked back. He reasoned that “if things worked out, if the neighborhood continued to improve, our customers who traveled to Europe are just the kind of people who would enjoy an environment like that (Gaslamp Quarter).”

Another Horton Plaza casualty was the Galaxy Grill, a 50s diner operating on the mall’s restaurant plaza. Owner David Cohn, one of the most successful Downtown restaurateurs, closed it after 10 years. He says that while the Horton Plaza fast food section enjoyed a lot of foot traffic on the opposite side of the mall, fewer pedestrians passed his location. “We aren’t anti-mall,” he says. “The main issue was basically competition. You only have a captive audience of a certain size inside a mall, and they kept adding food outlets.” The Galaxy Grill has been replaced with a McDonald’s.

Despite the turnover, Horton Plaza is hardly in a slump. General Manager Scot Turcotte says that there are virtually no vacancies in the center. The Samba Grill, a Brazilian restaurant, is slated to open soon in Westfield Shoppingtown Horton Plaza. Westfield purchased Horton Plaza for $206 million in 1999 from Horton Associates.

The retail scene is adapting to the times. “Finding the stores that fit the needs of our customers is our primary goal,” Turcotte says. That customer base has changed since its opening in 1985, when Horton Plaza relied more heavily on suburban shoppers. Today, the center benefits from the thousands of new Downtown residents, the Padres fans and the 800,000 conventioneers and 600,000 cruise ship passengers who arrive Downtown annually. Other changes are in the wind. Turcotte acknowledged that Westfield is in the early stages of discussing some Horton Plaza renovation concepts with CCDC. Consultants are looking at options that include repositioning portions of the mall to better serve Downtown’s surging residential population, as opposed to tourists, and the theaters are a candidate for redevelopment.

Meanwhile, the retail in the Gaslamp Quarter has begun to take off, attracting trendy stores like Quicksilver, Puma and Urban Outfitters. But potential shoppers walking in the Gaslamp neighborhood have few entrances into Horton Plaza shopping center. Gilchrist acknowledges that access was limited on purpose. At the time, there was no choice, he says, because the neighborhoods around it would scare off potential tenants and customers. No one had a crystal ball. Concludes Gilchrist, “If the project were being built today, and you had all the great residential activity going on and the activity of the convention center and the hotels, you probably would open it up a little more. But at the time, it was necessary to build it the way it was built.”

And, as history shows, the way it was built certainly helped build the Downtown of today.