In the spring of 1972 a couple of notable men came to Santa Rosa. Peanuts cartoonist Charles Schulz moved here from Sebastopol and Los Angeles developer Ernest Hahn entered “exclusive negotiations” with the city to build a downtown shopping center.

One fellow inspired powerful men to believe they could pull off an economic miracle for their town. The other invented a kid who tried to delude people into believing in magic pumpkins.

Since there are already plenty of webpages devoted to Peanuts, let’s just keep talking about the mall that many feel wrecked Santa Rosa.

This chapter is about public opposition to constructing the mall, particularly the “Save the Cal” campaign to preserve the town’s great Art Deco moviehouse on B street. (Here’s also a reminder that this is part of a broader series on Santa Rosa redevelopment: “YESTERDAY IS JUST AROUND THE CORNER,” which includes an index covering everything on the topic going back to the 1960s.)

Two years passed before there was any citizen pushback to building the mall. That may be surprising but as discussed earlier, there could be many reasons why people weren’t upset at first about a third of the downtown core being wiped out (and about to be sold to a developer for a fraction of its market value). Some clearly thought a big shopping mall would be a good thing – after all, that’s what the Press Democrat and all the city leaders kept saying. Some probably didn’t understand the scope of what was going to be built; Hahn’s architects hadn’t shown anyone drawings or models of what it might look like. And some were probably wary because Hugh Codding and his lawyer were loudly opposing the project with its giveaway land deal to a competing developer, and Hugh was never more of a polarizing figure than during those years.

“Save the Cal” is the protest we all commemorate today, but it wasn’t the first anti-mall dissent. More than a year before preservationists tried to protect the theater from demolition over 6,000 signed petitions to block demolition of the Levin Hardware building which was at the end of Fourth street next to the highway. The building had historic value, having survived the 1906 earthquake intact.¹

The hardware store struggle began in March 1973, when owner Sam Levin sent an impassioned letter to the City Council. His store was slated to be demolished before September, as the city’s Urban Renewal Agency (URA) was buying up all the property west of B Street and bulldozing it flat in expectation of soon selling it to the developer (see chapter three). Levin complained he only agreed to sell the land under duress because the URA was threatening to otherwise use eminent domain. His letter, bitter and angry, read in part:

…First, I protest the fact that H. Levin Hardware, my family company, is scheduled for extinction. This is a business which has served the Santa Rosa community for 50 years. This is a building with historical value to the city and county since it is one of the last existing old time hardware stores in the West. This is a structure which, according to engineers, suffered no [1969] earthquake damage, is essentially sound, and can meet the new earthquake safety code if I was allowed to spend the money to reinforce it. Therefore, this is a building which does not need to be torn down but which urban renewal intends to destroy in order to make way for the construction of a building which doesn’t need to be built…Although I fully support the basic concepts of urban renewal, I remain humiliated by and disenchanted with the actual program…

Council members were sympathetic and agreed the store should not be torn down just to create a vacant lot. One member pondered whether the building could be moved to Railroad Square on the other side of the freeway. Another wondered if it could be incorporated somehow into the future mall, which is yet another example that suggests some city officials envisioned the design was going to be something of a super-sized version of Montgomery Village.²

The hardware store dodged the wrecking ball for over two years. During that time all those petition signatures were collected and letters appeared in the PD in support of keeping the store where it was. There was talk of trying to get it on the national historic registry. Hahn donated $10,000 to assist the move and the Press Democrat ran a photo of him with Sam Levin and two other men. Finally in August, 1975 the business moved into a new building on the Sonoma Highway designed to resemble the original. The old sign can be seen on the wall and the mezzanine uses historic flooring.

While the original hardware store building ultimately was demolished, those cheering for mall construction – city officials, the PD and downtown business interests – were patient with Levin and his supporters, treating them with due respect as they worked towards a compromise solution. But at the exact same time, those interested in preserving the Cal theater were not treated so kindly.

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THE MOVIE PALACE ON B The Cal was originally the G&S Theater built in 1923 and cost about $250k (over $4 million today). Originally with 2,000 seats it was the largest movie/vaudeville house between San Francisco and Portland and had a 40×90 ft. stage. Besides showing the latest hit motion pictures, it was the mid-week stopover for acts on the Pantages vaudeville circuit. Performers were accompanied by a 9 piece orchestra or the Wurlitzer theatre organ, with popular tunes being played between acts or films.

The “Save the Cal” campaign launched July 18, 1974 with the announcement that a committee was formed to get a proposition on the November ballot. The ballot item would also call for the old Post Office and the Scottish Rite building to be saved, as well as for the city to build the long-promised cultural and convention center.

The city immediately tried to smear committee spokesman Eivin Falk as being a flack or patsy for Hugh Codding. Falk, who was the architect for the community center portion of Codding’s planned shopping mall in Rohnert Park, said he was considering suing URA director James Burns for allegedly calling him a “Codding lackey.”³

The Press Democrat chimed in with an editorial, where it sniffed the paper had “as much regard for our charming old buildings as anyone” the campaign was “another flank attack on the downtown shopping center” and didn’t have much community support. News articles in the paper shifted to calling our downtown movie palace the “B Street theater.”

Mention “Save the Cal” on social media today and most wax nostalgic about the fundraising rock concerts at the theater. The same evening the committee was announced, the Pointer Sisters plus Butch Whacks & the Glass Packs performed, with enthusiastic PD reporter Diane Morgan describing the audience dancing in the aisles and calling it “an indisputable success for the committee attempting to ‘save the Cal.'” (A video of the Pointer’s high-energy show from that time can be viewed here.) A concert by Boz Scaggs followed a month later.⁴

But here’s the obl. Believe-it-or-Not! twist: Neither of those concerts were fundraisers. The local promoters allowed the committee to hand out the flyer shown here in the lobby and it’s likely someone onstage mentioned preservation efforts.

Thanks in part to the smashing success of the concerts, the future of the Cal theater was about all anyone talked about in the following weeks. The PD tried to gin up controversy because Falk wouldn’t name others on the “Save the Cal” committee until they had incorporated as a non-profit.⁵ Hugh Codding and the attorney for Codding Enterprises repeatedly had to deny accusations they were secretly behind the group. Unable to prove any connection, the paper took to claiming they were “inspired” by Hugh. Towards the end of the preservation campaign the PD would print that the committee had been “entirely funded” by him but to date the group had raised all of $1,350 over about two months, not counting 57 bucks collected in donation cans around the city.

Hahn tried to get in front of the parade by announcing it was possible he could incorporate the theater into his mall, but after a quick look-see told the PD it wasn’t realistic:

Hahn said five engineers were testing the building’s structural soundness and acoustics. He said from preliminary reports the Cal looks like a “pretty bad building. We would practically have to rebuild the building.” And he said he wasn’t sure what might make someone want to save the Cal. “I talked to the owner and he does not know anything remarkable about it,” he said.

Likewise the president of the Redwood Empire Chapter of the American Institute of Architects said it had no architectural or historic value. And the Sonoma County Arts Council – which later received a $15,000 donation from Hahn – would not support preservation of the theater.

The PD quoted the city’s chief building inspector as saying the theater had “apparent damage” from the 1969 earthquake. Hogwash, realtor and committee member Oma Carpenter wrote in a letter to the editor:

…it’s structural safety is questioned now only because of political motives. The acoustics in the building are magnificent, the stage is very large, (one of the largest in Northern California) the 17 dressing rooms are very satisfactory, and the beautiful organ is in good condition, and is considered one of the finest pipe organs in California.

Also jumping on the bandwagon was Codding, who – true to form – came up with a brilliantly odd proposal. The Cal was owned by United Artists. That moviehouse chain rented a theater in Merced which happened to be owned by Codding. Let’s swap ’em! Hugh proffered. Predictably, the PD presented Codding’s new interest in the theater as more evidence he was really the committee’s puppeteer.

While Codding wasn’t involved with the committee (aside from making a $250 personal donation), they shared nearly identical plans. The Cal, old Post Office and the Scottish Rite Temple would remain untouched; there would be a major department store or two, shops, hotel, a convention/community center and housing. The committee’s design (shown below) included quite a bit of greenspace and called for connecting the project area to Juilliard Park.

What both resembled most were the plans envisioned by the city prior to the 1969 earthquake and before Hahn was welcomed to town. Yet while the Press Democrat spilled barrels of ink demonizing Codding as some sort of mountebank and the Save the Cal committee as misguided dupes, not once (as far as I can tell) did the paper observe they were promoting conservative ideas which were the accepted wisdom not so long before – redevelopment plans that fundamentally didn’t change the ways the project area had always been used. Alert readers might have caught the paper’s bias when it used character smears and innuendo to blast Codding and the committee, but harder to spot was when the press omitted such pertinent facts. Add this to the long list of ethical problems with the PD’s involvement in the race to build the mall.

Apparently rattled by the popularity of the rock concerts at the Cal, the pro-mall forces came up with a new talking point – ‘we know everyone wants a performing arts venue downtown but gosh darn it, we can’t afford it until the mall’s finished and bringing in tons of cash.’ To justify that point they dusted off a two year-old study from San Francisco consultants Bruce Lord & Associates. Here’s part of a September PD editorial:

It is becoming increasingly evident that the “Save-The-Cal” campaign is in reality an attempt to destroy Santa Rosa’s plans for a regional shopping center and with it the means to finance a convention-cultural center…We suggest that Santa Rosans who are interested in the true costs of such a convention-cultural center go back to the Oct. 16, 1972, study by Lord Associates with coordination by a committee chaired by Gaye LeBaron. They would find that such centers don’t come close to paying their own way. The only way such a center could be constructed in Santa Rosa would be with increased tax funds generated by the proposed new shopping center.

Except that wasn’t what the study and its local committee said at all. The main findings – even as reported in the PD at the time – were that Santa Rosa needed two facilities, one being a 2,500 seat auditorium and the other having an open floor for conventions, dances and such. As for financing, Save the Cal President Harry DeLope wrote a letter citing chapter and verse from the study (I’m amazed it was printed, as he exposed such blatant editorial misinformation). He pointed out the study projected the venue would break even after 180 events. Save the Cal followed up with an ad in the PD seen at right, showing the taxpayer’s cost of constructing the convention and cultural centers via the usual route of using muni bonds was almost exactly the same as developing the property before handing it over to Hahn. (Note the PD’s absurd number of typesetting errors.)

In September the committee asked the city to approve twelve locations where they could gather signatures for their ballot initiative. The City Council refused.

Not allowing citizens to sign a petition seems a mite undemocratic, but the City Attorney went even farther, saying the “initiative is illegal under state law and laws governing the city.” Voters had no say on the downtown plan because it was an administrative or executive action, he said. With a straight face. Oh, bullshit, said the attorney for Save the Cal, citing the City Code that specifically allowed that sort of initiative.

But that was just the beginning of the city’s attack on the citizen’s group. The mayor and vice mayor suggested they were going to have the District Attorney investigate them for fraud. The reason? Because they were collecting money under the name of “Save the Cal” while the initiative was, in essence, actually a referendum on construction of the mall.

URA Director James Burns also had been in contact with a San Francisco man who did some work for the committee preparing their alternative layout before being fired for misrepresenting himself (the paper called him an architect but his name isn’t in the PCAD database). He claimed to be owed $150 for his work and wrote to the city hoping they would pressure Falk or Codding into paying him.

Falk – who had announced earlier in the meeting he was stepping down as President of Save the Cal “so that I may not be the reason the City Council chooses to use for ignoring [the initiative]” – said he might start a recall against council members. In what he said would be his last public statement, he accused Mayor Downey and Councilman Jones of possible conflicts of interest:

It is below my professional dignity to seek further support from city council members who conduct themselves like a circus sideshow while in session…Of what are the council members afraid? That their vested interests may not materialize without Hahn’s development or that the future promises they may have been given may not come true?

The City Council and the Press Democrat remained determined to find some link between Codding and the Save the Cal committee. When Hugh Codding and wife Nell were spotted at a City Council hearing sitting near two members of the committee, the PD ran a large photo. A Councilman demanded Harry DeLope name any Codding Enterprises employees who attended a rally. “Remember, you’re under oath,” Councilman Poznanovich said. (The reason they gave for requiring speakers to be sworn was supposedly because remarks could be later used used in lawsuits. This example, however, reveals it was used for intimidation. And if it’s an act of perjury to be imprecise at a City Council meeting, I can think of a few developers who should be enjoying San Quentin vacations.)

The attorney for Save the Cal filed suit to force the city to permit signature gathering. Meanwhile, a new group, the Taxpayers Committee for the Right to Vote (which was mostly – but not entirely – financed by Codding) took the initiative and circulated a petition for a referendum that didn’t just propose to save the Cal, but to ask voters whether plans for the mall should be scrapped. The City Council decided it was just a stalking horse for the theater advocates, and indulged in some snarky banter demonstrating they didn’t take the issue seriously:

Councilman Gerald Poznanovich said “I understand they have a new name.”

“Save the World.” Councilman Murray Zatman said.

“Save Codding Enterprises,” Jones said.

To counter the Taxpayers petition drive, the Chamber of Commerce and Downtown Development Assoc. hired a PR consultant to collect pro-mall signatures. A few weeks later the consultant boasted of gathering 1,500 names. Then the Taxpayers group dropped off a box at City Hall with 7,000 – almost twice the number required to hold a special vote.

Predictably, the Council again refused to consider a referendum. The Taxpayers committee sued, as the Save the Cal group had done earlier.

That was at the end of 1974; looking forward 17 months, Superior Court Judge Joseph P. Murphy Jr. made a ruling. In a rather convoluted decision, he blocked referendums from either group. Yes, citizen groups may place referendums up for a vote – but in this case there was a conflict with state law on redevelopment, so the committees would have to show the outcome might have impact beyond Santa Rosa.⁶

And that was the death knell for the Cal. The public wouldn’t be allowed even an advisory vote on preserving the three historic buildings. Santa Rosans would not be asked whether or not they wanted the shopping mall. (In 1976, however, the Corte Madera City Council said “participatory democracy” was important enough to put an item on the ballot regarding a mall Hahn intended to build there. The vote was against the mall.)⁷

Save the Cal had not been dissolved when Judge Murphy issued his decision but a few months had passed without signs of activism or even letters to the Press Democrat. That’s likely because Hahn filed a $40M lawsuit against Codding and any person, place or thing associated with him. More on this can be found in the next chapter, but the suit mentioned “Various persons, corporations and associations, not named at this time as defendants herein, have participated and acted in concert and conspiracy with defendants…” According to the PD, the list included committee members Olma Carpenter, Harry DeLope, and the Falks.

As Gentle Reader knows today, only the old Post Office was saved and that was only because of generous donations made to the Historical Museum Foundation of Sonoma County (DeLope was the group’s secretary).

The last picture show at the Cal was July 5, 1977. It was a Disney double feature: “Boatniks” and “The Gnome-Mobile.” The PD headline for the obit was “Three years later…the Cal Dies Unsaved.” Gloat much?

There were requests to the URA for permission to hold a farewell event at the theater but all were refused. In August there was a liquidation sale. The ticket booth cost $500 and seats were $40 each. The Wurlitzer pipe organ was dismantled and went to San Diego’s California Theater. Gaye LeBaron offered an item about the old stage curtain:

One interesting note about the oleograph that has become the most sought-after item in the Cal sale with even the City Council expressing interest. That colorful piece of memorabilia, with advertising from Santa Rosa for forty years ago, is up to $2,000 now and bidding is still going on. A couple of years ago it was soooo close to the garbage can I cannot tell you how close. When the Pointer Sisters appeared at the Cal two or three years ago, manager Wes Porter planned to use the old oleograph for a backdrop but the fire marshal, examining its flammability, ixnayed that. Porter took it down, rolled it up and was just about to chuck it out when he had a second thought and shoved it in a closet instead.

The Cal was torn down over the course of several weeks in November 1977. The Press Democrat’s front page on the 13th featured a heartbreaking photo of a bulldozer inside the theater, plowing away the remaining seats. The article noted it would soon be replaced by a parking garage for an “ultra-modern downtown shopping center.”

NEXT: THE BIG BOOK OF RED FLAGS

1 It was repeatedly stated in the March 8, 1973 Press Democrat and other articles at the time that Levin’s building was fifty years old, which was an error. The Levin Hardware Co. apparently had been there since 1935, but before that the building was the well-known McKinney & Titus home furnishings and appliance store, which began advertising in Jan. 1907 for customers to visit their new store at 304 Fourth. Prior to the Great Earthquake it was “The Santa Rosa Department Store.” The building was constructed in 1898.

2 At its February 14, 1974 meeting, members of the city Planning Commission raised questions about whether it could be an open air mall (MORE).

3 Falk’s wife countered the “Codding lackey” insult by charging Burns had a conflict of interest because of earlier dealings with Hahn, and should be replaced as Executive Director of the Santa Rosa URA. Burns denied the accusation and told the PD he was briefly the vice-chair of the URA in Cerritos, where Hahn was planning to build a shopping center. As Hahn already owned the property, that Agency had no role in selecting him to be the developer. Mrs. Falk withdrew her statement and apologized to Burns. Nonetheless, the previously unmentioned Cerritos history showed Burns indeed had a connection with Hahn years before he took a position in Santa Rosa, where he advanced Hahn as the sole viable developer.

4 The same local promoters, Crossaxe Promotions, brought Butch Whacks back in October for a concert pairing the band with Pablo Cruise. That one was held at the Santa Rosa High School auditorium instead of the Cal which meant a permit was required, and reportedly the promoters had to assure the city it was not a theater fundraiser.

5 Besides Eivin Falk, the “Save the Cal” committee was Harry DeLope (President), Jack Spiegelman, Fred Barclay and Oma Carpenter.

6 “Murphy’s decision indicated Santa Rosa’s charter and city code provide for the exercise of the right of initiative and referendum while the state Community Redevelopment Law provides for legal action as the exclusive remedy. In cases where such conflict occurs, Murphy said, jurisdiction will be decided by ‘whether the subject matter is a municipal affair or whether it is of statewide concern.’ Murphy’s decision that the question was one of statewide concern resulted in a ruling for the city.” (Press Democrat, March 31, 1976)

7 The issue of the Corte Madera mall was introduced in the previous chapter, where Hahn was threatening a $17.5 million suit if he couldn’t build there. He did file a $10M suit alleging “inverse condemnation.” The Marin project was initially proposed to be 1.2 million sq. ft. but when The Village at Corte Madera was eventually built by Hahn’s company it was pared down to roughly a third the size.

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By Christmas 1974, Santa Rosa City Hall was at war. Not good, but at least the bleak concrete architecture that made the government complex look like a fortified bunker now seemed fitting.

The city was fighting its war on several fronts. The county was suing the city, accusing it of exploiting a loophole which would cheat the treasury out of millions of dollars per year. Hugh Codding was now on his seventh lawsuit to block Santa Rosa’s Urban Renewal Agency (URA) from working with the developer planning to build the downtown mall, and likewise the city had sued Codding to put obstacles in his plans for a shopping center in Rohnert Park. (A peek into our crystal ball shows that about a year later Rohnert Park will be suing Santa Rosa over building the downtown mall and the developer will sue Codding.) And meanwhile Santa Rosa’s City Council was warring with the public, not only refusing to allow a referendum vote on the shopping center but calling the referendum proposal itself as being illegal.

Watch “Game of Thrones”? What happened in Santa Rosa during 1974 and 1975 was filled with just as much conflict and intrigue – not to mention being just as difficult to follow, should you not keep up with each confusing turn in a story that seemed as if it would never end.

The key takeaway from this chapter should be there was never any resistance to building the downtown shopping mall from the City Council or other Santa Rosa decision makers. Making a deal with Los Angeles developer Ernest W. Hahn had broad support from the beginning, even from downtown merchants. They believed it would make Santa Rosa a more prosperous and better place to live.

But as the project became more ambitious the city became more dependent upon it being built, and they indebted the town in ways that would have been considered risky, even scandalous, in other times. City planners convinced themselves the mall would bring in staggering piles of cash and every delay in construction meant the town was being cheated out of what was its due. Money fever raged through the many offices in City Hall like a pandemic, and people who raised questions or urged caution were deemed enemies. Community betterment took a backseat to making sure developer Hahn was kept happy. That 1974 Christmas lawsuit was over the Board of Supervisors fearing school districts would be screwed out of funding in order to keep Hahn’s property taxes artificially low.

(Developments described here follow key events in 1972 and early 1973 which were introduced in the previous chapter. If there are unfamiliar terms or names “MR. CODDING HAS SOME OBJECTIONS” is a good starting point, with an index to the whole “ROAD TO THE MALL” series also available.)

Our story resumes as Codding’s second lawsuit was filed in June 1973. It raised a valid complaint there had been no public hearings concerning a downtown shopping center – much less, government approval to build same – yet the city was more gung-ho than ever over Hahn’s mall.

Another point made in the suit was more important, yet difficult to understand from coverage in the Press Democrat. Codding wanted to block a new city bond from being issued. The bond had “nothing to do with the shopping center,” the URA director told the PD – although that was inaccurate, as the main purpose of the bond was to obtain a federal grant to buy some of the property where the mall would be built. ¹

From that point onwards, there were major new developments almost every month.

The Renewal Agency opened the door to sell the land to Hahn (it was an “interim resolution,” so there was still wiggle room). At the same time, the Rohnert Park City Council – which was rooting for Codding to build his “Coddingland” shopping center there – said they were considering suing Santa Rosa because the mall would “monopolize [county] sales tax revenue”. The mayor of Santa Rosa told them to butt out; we hadn’t made a fuss over their projects.

Hahn announced he had commitments from Sears and Macy’s for his future mall. Macy’s was the whale that Santa Rosa failed to land in the mid-1960s for the Courthouse Square area, so that was undeniably an impressive win. But what was the deal with Sears? They already had a store at the corner of B and 7th and it wasn’t even that old. The official reason was the chain wanted to double their space to put more emphasis on fashion and home furnishings, but as discussed later there was quite a bit more to it behind the scenes.

At the close of the previous chapter, the City Council had expanded the border of the urban renewal study area from Fifth street to Seventh. As of that September, this additional acreage had a name: Phase III.

Phase Three was quite different from Phase Two. It was to have a single store (Macy’s, although that decision was apparently in the future) along with its surrounding parking garage. Nor was it mentioned in early newspaper coverage whether it would be attached to the mall, thus closing off easy access to Railroad Square.

What readers of the Press Democrat were told was the new combined assessed value of Phases 2-3 was $13.7 million – a 550 percent increase over the mixed-use neighborhood it was replacing. The PD loved quoting such figures from URA Executive Director James K. Burns: “Discussions with Burns leaves one’s ears ringing with the promise of millions of dollars of economic improvement in exchange for blight.”

(RIGHT: Santa Rosa “development value” from urban renewal projects, as shown in a 1974 URA pamphlet.)

Those figures were just the beginning. With each passing year, estimates of all sorts kept skyrocketing. The mall would create 1,000, 1,500, 3,000 jobs. It would more than double retail sales by 1980, which would “revitalize” downtown businesses yet not compete with them. New construction would bring in $18 million – no, wait, we meant to say $60 million. The increase in commercial taxes would pay to redevelop even more of Santa Rosa (“Railroad Square could become an exciting ‘old town’ tourist center”). Perhaps schools should have placed caviar on the lunch menus so kids could get accustomed to the good life they were soon to enjoy.

City Hall had better hope lots of money would result from adding Phase III, because there was no clear way to pay for it. “There is no more money for urban renewal for Downtown Santa Rosa,” Burns announced, as President Nixon had slapped a moratorium on new redevelopment projects.² Without the guarantee of free HUD money, Santa Rosa would be assuming a much higher risk – and Hahn made it clear there would be no mall without this extra land. Together with Phase II the footprint would be thirty acres and he said the usual shopping center size was 50 acres, leading Hahn to grump he would have to unhappily add a second floor to make up the shortage.

It would take months to have the legally-required Environmental Impact Report (EIR) and other studies prepared for the combined Phase II-III project, and to hurry it along Hahn allowed $98 thousand of his $500K “good will deposit” to help pay for it – although he expected the entire amount given back (with interest) once the project received a green light.

During this interim the first meek voices of opposition (other than the Coddings) began to be heard – with pro-mall forces eagerly waiting to shout them down.

At its February 14, 1974 meeting, members of the city Planning Commission raised questions about traffic and whether the mall could be open air, as was Coddingtown then. Commissioner William J. Weil, a vineyard realtor, mused that we should also consider whether or not the mall should be built. (This is exactly as it appeared in the meeting transcript, with the ellipsis probably showing rhetorical pauses in his remarks):

Has anybody really looked into this and said, you know, we need another shopping center in the town? And I think, especially the Urban Renewal Agency being a quasi-public agency, probably has a greater obligation than a private developer or private enterprise to look at the needs of the community and not to do something that is expedient for, …I don’t know how to say this thing without… in a sense feathering their nest. Then to look at the community as a whole and say this truly is the best thing. This is what the community needs.

Milquetoast as those comments were, they apparently set off alarm bells. The Press Democrat reported “Commission Chairman Donna Born said her group has been made ‘the bad guys.’ She said strong commission statements last week were meant to be constructive.” (Bookmark that “feathering their nest” comment, by the way – the issue will resurface.)

The PD was firmly in the Hahn/URA camp, and printed (wayyy too) many articles with Burns’ ear-ringing promises of great riches certain to come. The paper also downplayed news that might portray the developer poorly. The same week Planning Commissioners were being called “bad guys” only the most observant readers might have caught a passing reference that Hahn’s design at the time called for a 700 car, two story garage between his mall and B Street. So much for pretending Hahn had good intentions for the mall to be integrated with the rest of downtown Santa Rosa.

Worse, the PD tried to suppress news about Hahn threatening to sue a town that might reconsider plans to build a mall there. In January 1974 Hahn warned Corte Madera it would “suffer the consequences” if their City Council – which had recently elected an anti-mall majority – withdrew approval.³ Although the Marin I-J had published several articles about his $17.5 million threat, nothing about it appeared here for weeks, and then only after Codding’s lawyer, William Smith, slipped copies of Hahn’s ultimatum letter to the PD and members of the Santa Rosa City Council. Hahn told the Press Democrat the Corte Madera situation was completely different from here and insisted “we’ve never threatened a suit before.” Yet our local paper still managed to spin the news as if Hahn was being unfairly attacked, with the PD article framing it as “the latest development in the Codding Enterprises-Santa Rosa Urban Renewal Agency controversy.”

(RIGHT: Undated portrait of Ernest W. Hahn courtesy the California Homebuilding Foundation)

Probably many in Santa Rosa were shocked to hear of Hahn playing lawsuit hardball. He seemed such a damnably likable fellow, a grandfatherly neighbor who might rock on his porch swing after supper, sipping a Coors Light while listening to a ballgame on the radio. Hahn came to Santa Rosa and usually made presentations or answered questions himself. And although he was a big shot, someone on FaceBook commented they would see him riding the bus from San Francisco.

Unlike Corte Madera, the decision-makers in Santa Rosa gave Hahn their full and unconditional faith that he would do what was best for the city. Part of the reason might be because he told them what they wanted to hear. While URA Director Burns was promising the mall would rain down riches, Hahn told them to feel good about tearing down an existing neighborhood because nothing worthwhile was being lost. “There were a lot of old buildings and vacant land there,” he said to the PD. “What are you going to do with it?”

So tight were Hahn and City Hall that we asked him to lend us money. Santa Rosa was turned down for a conventional $3.5M bank loan in order to finish acquiring land for Phase II and III. Hahn agreed to the loan at eight percent interest, the highest we could pay by law. This short term interim loan would be paid back by the muni bonds, which would in turn be paid back by the increased taxes expected once the mall opened. Gentle Reader is forgiven for now muttering, “gee, this sounds like a house of cards.”

The way the URA planned to use bonds for nearly all of the mall financing was always legally shaky, particularly since the city could no longer count on matching federal grants (see footnote 2). The Press Democrat mentioned the Hahn loan several times but was light on the details – except for one article’s scary statement “Hahn could foreclose on the property” if a judge later tossed out this use of bonds. The city and Hahn negotiated the loan for over three months before the idea was dropped.

The PD also neglected to explain that relying on Hahn as a banker might not be such a swell idea. In 1973 he had been sued for fraud and “irregular banking practices” for his role in the largest bank failure to date. The overall scandal was mentioned briefly in a 1975 profile of Hahn in the PD, but not that he personally paid a large settlement.⁴

The failure to land a (relatively modest) $3.5 million short-term loan threw the entire mall project into crisis, and URA Director James Burns continually barked that every month of delay in construction was costing the city about $100,000 (!) and the sole cause of all these woes was Hugh Codding and his gang of hoodlums. According to Burns, the Codding lawsuits spooked bankers from having anything to do with Santa Rosa.

Hahn was never as strident against Codding, but while defending his threat to release a courtroom Kraken on Corte Madera in early 1974, Hahn commented to the PD, “[Codding’s] attitude could jeopardize the future of downtown Santa Rosa…Other than Codding, I haven’t heard one voice in the community against the project.” That wasn’t quite true – see remarks above from the city Planning Commission – but Hahn was about to hear from lots of other dissident voices, which is the subject of the following chapter.

But a year after the 1974 Christmas lawsuit filed by the county, Ernest Hahn filed a $40M suit against Codding in federal district court in San Francisco. As summarized in the PD, Hahn alleged “Codding and his firm, Codding Enterprises, are guilty of anti-trust violations, defamation of character, and interfering with Hahn’s business relations with the city of Santa Rosa.”

1 The court dismissed Codding’s entire suit as “premature,” as the bond hadn’t been issued. The $1.8M TIF bond (see previous chapter sidebar) never got beyond URA passing a resolution for it, and it is not clear if it was ever anything more than a financial gimmick to obtain a matching amount of Community Development money. It was intended to make up for an $800 thousand shortage in the city’s required share to the overall urban renewal fund. The remaining million was to be added to the pool of money for renewal projects, such as a proposed parking lot between A and B streets or redevelopment around South Park. The week following Codding’s suit over that bond, the URA was awarded the matching $1.8 million grant for land acquisition in the Phase II area.

2 In order to avoid cuts to the $18 billion military budget, Nixon froze large parts of the budgets for key health, education and housing programs from the Kennedy and Johnson years. The new January 1973 guidelines for HUD grants and subsidies required local governments to acquire the properties, do all improvements and sell it to a developer within one year. By September – the month Phase III was announced – the rules were tightened further, essentially ending all federally funded projects except public housing for the elderly. (MORE)

3 Of the $17.5M Hahn was going to demand in the Corte Madera suit, $2.25M was for studies, presumably like the ones Santa Rosa thought it was getting for free. The rest was for lost POTENTIAL income.

4 Hahn’s start as a shopping center developer began after U.S. National Bank in San Diego acquired a bank Hahn co-founded that was in trouble because of poor loans. Hahn was named to the USNB board and when the bank collapsed in 1973 criminal charges were filed against the bank president for tax fraud, securities fraud, embezzlement and bank fraud. Hahn, who had been an active director, was on sabbatical at the time but was among those charged by the FDIC for engaging in “unsafe and unsound” banking practices. He paid up to $2M for settlement and attorney fees. For much more, see this article in the San Diego Reader.

NEXT: SAVE THE CAL

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