ROAD TO THE MALL: GREATEST EXPECTATIONS

October 1, 2022November 23, 2022 Jeff Elliott Leave a comment

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

"Santa Rosa Urban Renewal Project Area" as shown in a 1974 URA pamphlet. Yellow: Phase I. Orange: Phase II. Tan: Phase III. Blue: Phase IV - Possible community/convention center. Green: Phase V - Possible Railroad Square historic tourist center. — “Santa Rosa Urban Renewal Project Area” as shown in a 1974 URA pamphlet. Yellow: Phase I. Orange: Phase II. Tan: Phase III. Blue: Phase IV – Possible community/convention center. Green: Phase V – Possible Railroad Square historic tourist center.

ROAD TO THE MALL: MR. CODDING HAS SOME OBJECTIONS

September 9, 2022December 12, 2022 Jeff Elliott Leave a comment

There were good reasons to feel optimistic in the spring of 1973. The last American soldiers left Vietnam. The Watergate hearings started and people began taking the scandal seriously, with public opinion swinging from it being “just politics” to “very serious.”

In Santa Rosa, the Press Democrat published its “Outlook 73” supplement which painted a very rosy picture of things to come. We would soon have a wonderful downtown shopping center with three major department stores and up to 85 stores. And soon after that a renewal project for Railroad Square will include a community center with a 2,500 seat performing arts theater and a 50,000 sq. ft. convention hall.

The photo accompanying that cheery item portrayed a scarred landscape that looked like a war zone, with several roughly cleared acres half filled with pools of rainwater. Not long before, the area was home to mom ‘n’ pop stores, repair shops, apartment buildings and more. In the name of urban renewal, that business and residential district was turned into this scene of desolation – which is how it would remain for the next seven years. It’s tough to stay optimistic for that long, particularly when a growing number of people would start to question whether the shopping center was such a good idea in the first place.

(ABOVE: Hugh Codding holding the “key to the city” while dressed in 19th century costume during the March 16, 1968 Santa Rosa centennial. Photo courtesy Sonoma County Museum)

As introduced here in earlier chapters of the “ROAD TO THE MALL” series, this phase of urban renewal started in March 1970 when the City Council passed an ordinance ruling that pretty much everything between B Street and the highway was a “blighted area.” Hardly anyone made comments or raised questions at the public hearing; likely most expected a replay of what happened in the 1960s, when all the blocks surrounding Courthouse Square were similarly deemed unfit but only a few building locations east and south of the Square were affected. They couldn’t forsee that this time, however, the city would be demolishing everything in the area.

Nor was there much fuss when the first bulldozers arrived in 1972 and started bulldozing. A short-lived lawsuit on behalf of the 200+ low income residents still living in the area was quashed by the city’s promise to make good on its original promise to find them other places to live.

The same week that suit was filed, the Press Democrat said Santa Rosa approved “exclusive negotiations with a Hawthorne development firm for a renewal-area shopping center.” A shopping center was a radical new direction from what had been considered when the blight ordinance passed in 1970; at the time there were only fuzzy plans for a department store, motel and a convention center. Even though this major decision was made by a non-elected city staffer without any sort of public hearing, there seemed to be little concern – although normally this sort of undemocratic schenanigan was what you’d expect to set city hall watchdogs barking in alarm.

No group opposed to the redevelopment project appeared until the autumn of 1974 (the topic of a following chapter) but there was one Cassandra who warned from the beginning the situation was fraught: Hugh B. Codding.

In 1970 Codding was a member of the City Council. At that March blight-ordinance meeting he remarked the city’s Planning Director Ken Blackman and the Vice Mayor had tried to strong arm the Montgomery Ward department store chain.¹ Codding – who had offered Wards space at Coddingtown – said he was told the city officials had warned a company executive they would have to commit to building a new store in the project area or the company wouldn’t be welcome in Santa Rosa. Other council members pressed him for details and Codding provided the name of the Wards executive, yet the Vice Mayor still insinuated Codding was a liar.

That set the tone for much of what would happen over the next dozen years. It would be Codding fighting the city – specifically, its Urban Renewal Agency (URA) – charging that most everything leading up to opening day at the mall was shifty, if not flat-out illegal. In turn, city officials sniped back over his motives and embarrassed themselves with foolish remarks; in 1974 some council members suggested a boycott of Coddingtown and Montgomery Village. Yeah, causing the city to lose a large chunk of its sales tax revenue would really show Codding who’s the boss, you bet.

But don’t mistake Hugh Codding for a valiant knight wanting to protect his hometown from death by redevelopment. While he believed a mall at that location would force existing downtown stores out of business, he wanted to build on the site as well. Codding told the PD it would “resemble the old central business district plan and would include two department stores and shops, a conventional hotel center, exhibition hall and entertainment center.” He vowed not to touch the Cal Theater and said he would turn the old Post Office into a museum right where it was.

Codding’s main argument was the project area, dubbed “Phase II,” should be sold outright to a private developer (him) at fair-market value – as opposed to making a complicated deal that would be funded through the URA using public funds, including raising money via bonds.

And you can bet Codding was pissed because he wasn’t given a chance to even discuss those ideas with the URA, which rushed into exclusive negotiations with Los Angeles developer Ernest W. Hahn. This was more or less what had happened back in 1964, when he was blocked from making bids on the earlier redevelopment project because the agency made a sweetheart deal with local developer Henry Trione’s group.

Codding was on the City Council back then, so he confined his protests to snarky comments about unfairness. But now that he was no longer a councilman he unleashed Codding Enterprises’ attorney, William J. Smith, who would keep busy filing lawsuits intended to monkeywrench Hahn’s mall project. The Press Democrat was unabashedly a cheerleader for mall construction and had long disliked Hugh Codding but Bill was a great lawyer, if only because he kept Codding’s anti-mall viewpoints in the paper. Reporters knew he was the go-to guy for a dramatic quote: The mall project was not only a “land grab” but “the biggest ripoff in the history of Santa Rosa.” Without his colorful quips much of this important history might have slipped by unnoticed.

(RIGHT: Richard Codding and Bill Smith looking at plans of Coddingland Shopping Center in 1971. Photo courtesy Sonoma County Library)

Codding was further motivated to stop or slow down the Hahn project because he didn’t want competition. Besides Coddingtown and Montgomery Village, since the mid-1960s he planned to build “Coddingland” (!) – a large regional shopping center on the west side of Rohnert Park. As explained in the intro to this history of the mall, a commonly-held notion at the time was that a shopping center was vital to a community’s economic survival; failing to have the best one within driving distance of most people in the area and the local Chamber of Commerce might just as well start handing out STORE FOR RENT signs.

Before continuing, I want to repeat an earlier point that cities and counties all over the nation were making similar stupid, irreversible decisions in those days. I don’t find a whiff that anything actually illegal was going on here in Santa Rosa – it was good intentions, not greed or corruption, which led to the dismantling of “The City Designed for Living.” (Here’s also a reminder this chapter 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.)

But a year before Smith’s first lawsuit was filed, it seemed like Codding’s proposal might get a hearing at the agency after all – although URA Executive Director James K. Burns originally told the Press Democrat he hadn’t even considered speaking to Codding because Hahn’s company had far more regional experience. Lordy, that must have stung.

The exclusive deal with Hahn was for a 120 day feasibility study. “Mr. Codding went away with the understanding that if Mr. Hahn’s firm doesn’t come up with a workable proposal in four months, his firm would be one offered a chance for a new proposal,” the PD reported.

Come July of 1972 and the study period was up. Hahn asked for a nine month extension, which was immediately granted by the URA. Replying to a question from Codding Enterprises, Burns said they were welcome to look at any area plans or studies that didn’t belong to Hahn’s company. What the PD actually printed, however, was they couldn’t see anything that was the property of the Burns Company. It was interesting no one at the paper caught this howling typo – but considering what happened next, it proved surprisingly prophetic.

Time fleweth by and it was now March 1973 – Hahn had had a full year to consider whether he wanted to build a mall or no. He could still cancel the deal without consequences, as his company had not purchased an option on any of the property and those months of study were really the sort of due diligence that his staff surely needed to do on every major project.

Attorney Smith appeared at the next URA meeting and accused the agency and their lawyers of stonewalling requests for basic information about the planned scope of the Hahn project and how it would be paid for. After a month of failed efforts to simply get someone to answer the phone, Smith said their behavior was “suggestive of governmental secrecy and closed-door dealings.”

The agency chairman demurred, saying they first needed to consult lawyers and have Burns write a report. That response only further raised red flags, as just a few days earlier Hahn was the speaker at a Downtown Development Association (DDA) dinner where he blabbed at some length about the size and layout of the future mall. As far as funding, he boasted it would “pay for itself.”

A few days later Burns gave Smith a copy of a memo which he said was soon going to be shared with the City Council anyway. It sketched out how much the URA intended to raise with bond money, which was in addition to the HUD grants. The scheme was either savvy (the project would “pay for itself” if everything went perfectly to plan) or reckless (Santa Rosa could end up bankrupt if it didn’t). The Big Ask would be for $13 million and include funding for “development of Railroad Square” and construction of a community center – both of which were to be quickly dropped from actual consideration, though they continued to appear in PR pamphlets touting redevelopment. ²

–

…AND HOW WOULD YOU LIKE TO PAY FOR THAT?

In March 1973 the URA told Hahn it would propose Santa Rosa use two kinds of bonds that didn’t have to be approved by voters. Neither type of bond was controversial in its own right, but Santa Rosa wanted to use them in a way more beneficial to the developer than the city.

A Lease Revenue Bond (LRB) is issued by government (state, county or city) to pay for a public building that wouldn’t be used to generate income, such as a firehouse, school, or a prison. This is how Sonoma County funded construction of the present courthouse after voters refused to approve a bond (five times, no less!) between 1960 and 1963. The government then rents the building from the bondholders.³

A Tax Increment Financing Bond (TIF, also called a “tax allocation bond”) has less specific purposes, but is usually to fund redeveloping an entire “blighted” district. Presumably such improvements would result in higher property taxes and more local sales tax income.

Both are long-term municipal bonds which would typically extend over decades. But Santa Rosa officials believed at the time the mall would be opened by 1975 and the city treasury would be instantly awash with tax money, which would pay off any bonds in 8-10 years.

The $13M TIF bond was dropped, but the city later sold $6.5 million in bonds for Phase II redevelopment. Another $1.8M TIF was not sold, but was a “tool” used to obtain a matching federal grant from HUD, according to a URA lawyer.

It was because of the proposed TIF bonds that the county sued the URA in late 1974. Because all new tax income generated by the mall was earmarked for paying off the bond, special districts for schools, fire departments and hospitals (etc.) would not enjoy any benefits.

Worse, the assessed property values in an active redevelopment area were frozen at whatever they were when the blight removal project began. To speed up HUD approval of the 1970s project area, the URA had used a loophole. They claimed this wasn’t a new project, but rather an extension of the earlier project near Courthouse Square. This meant property taxes for the new mall were to be set not according to the current year, but instead the “base year” when redevelopment was first approved – which in this case was 1961.

(This sidebar has been edited to correct details about the TIF bonds.)

This was in addition to the big tranche of HUD urban renewal money, and the URA intended to raise this other pot o’ gold via bonds – which led to lawsuits against the URA by the county as well as Codding. See sidebar.

Once Bill Smith obtained this “secret memo” between Hahn and the URA he unleashed his silver tongue: “The implications of this material are staggering. It is perhaps the most incredible document we have ever studied.” He objected to the absence of voter approval and that taxpayers would be “subsidizing land developers and large department stores.”

All true that, but left unsaid was those bonds represented a Point of No Return. After they were issued, Santa Rosa would be completely at the mercy of Hahn making good on his promises. Should he proclaim that, oh, the mall just might need another year of studies – or goddesses forfend, he might be thinking about walking away from the project – the city would still have to make bond payments on today’s equivalent of $84 million dollars. We were giving away all bargaining power on what impact the mall would have on the future of Santa Rosa.

Yet at every URA or City Council meeting concerning redevelopment, attorney Smith was there, reminding the officials that Codding Enterprises was ready to immediately present a $1M deposit to buy the property outright, with no bond funding required at all. So great was the animosity toward Codding they never had the courtesy to allow him to make a pitch. Maybe they were concerned his proposal would prove so popular it would put the brakes on the mad rush to hand over keys to the kingdom to a Los Angeles developer.⁴

A few weeks after the “secret memo” episode, Hahn was back in town for a URA meeting where he requested (wait for it, wait for it!)…another extension. This time it was for ninety days, and the agency approved it unanimously. Bill Smith was at the meeting, and I’ll bet his eyes rolled so far back in his head they made an audible clunk.

Hahn was also there to deliver a cashier’s check for $500,000 as “good faith” money – but should the deal fall through, Hahn expected all of it back, and with interest. Smith argued this amounted to giving him a risk-free option, and said Hahn had dragged out studies for a Richmond shopping center for two years before it was dropped. In response the URA chairman chided Smith for not being “affirmative.”

The new extension was because Hahn said he needed time to prepare a “predisposition agreement” required for HUD approval and review by bond underwriters. Said Smith: That means it’s a public document and I want to see it. He was told it was off-limits because it part of their exclusive negotiations with Hahn.

Thus Codding Enterprises immediately filed its very first lawsuit in the redevelopment saga, seeking disclosure of the agreement under California’s version of the Freedom of Information Act. He complained to the PD about the URA throwing out obstacles on “this charade, this costly proceeding to get a lousy letter.” When it was released shortly afterwards it was shown one department store was committed to the mall, another considering it, and a third straddling the fence.

In an imperfect (yet better!) universe this would be nearly the end of the story. Codding surrenders and Hahn’s mall is built in the mid-1970s. Yeah, it may be obnoxious but it doesn’t completely dominate downtown. It ends at Fifth street so it’s still easy to get to Railroad Square. The beloved Cal Theater remains in place, as does the Old Post Office and Masonic Scottish Rite Temple, with its precious Kurlander Collection of Santa Rosa’s historical artifacts.

But Gentle Reader knows this is not what happened. Bill Smith continued to protest. Codding continued to sue. In the following years others decided Codding shouldn’t have all the judicial fun and they filed lawsuits as well. In the compressed viewpoint of hindsight, that period looked like everyone was slugging it out with everyone else all the time.

We can pinpoint our unhappy turn of fate to May 22, 1973, which was when the City Council approved expanding the urban renewal study area to Seventh street at the request of the URA. Besides the aforementioned heritage buildings, this area included the Bishop-Hansel Ford dealership and the 75,000 sq. ft. Sears department store, which was less than 25 years old.

Smith argued those twelve acres were not blighted and thus would not qualify for HUD redevelopment funding. Burns countered it was the Council who determined where urban renewal was needed. The PD noted the underlying reason was to expand the mall’s footprint.

So here’s the executive summary of where things stand as we enter the summer of 1973:

Our coy developer, Hahn, is still not sure Santa Rosa is up to muster and is having trouble signing up anchor stores for the future mall. But maybe if we could see fit to supersize the amount of land we’re giving him, he will decide he likes us in spite of our failings.

URA Executive Director James K. Burns has taken to fear-mongering the city is “losing $100,000 in taxes monthly” until the mall opens. He and other URA members appear so worried Hahn might delay or take flight they attempt suppressing all disclosure of their “exclusive negotiations,” skirting the law and giving their discussions the shady appearance of backroom dealmaking.

Codding Enterprises attorney William Smith is haunting public meetings and writing letters that warn the city is being hoodwinked.

There is still no organized public opposition to the mall project. It may be because Codding is leading the fight and some people really don’t like him. Since no architectural drawings appear in the paper most don’t understand Railroad Square might be blocked off. Or perhaps people just aren’t paying attention because it’s all so confusing. (“Tax increment systems?” Wha?)

Bottom line: Judge them not, because few, if any, can see what’s in store for poor, damned Santa Rosa.

¹ The Montgomery Ward building in Santa Rosa was demolished following the 1969 earthquakes, but they quickly reopened as a catalog store near the current location of the Mendocino Av. Safeway. In 1972 they moved next to the Flamingo Hotel.

² A full breakdown of Phase II and III financials by URA Executive Director James K. Burns can be found in the September 2, 1973 Press Democrat

³ No Lease Revenue bond was issued for the mall project (as far as I can tell) although it was described several times in the paper, including in a March 9, 1973 Press Democrat interview with Burns. It was probably just being used as a talking point in order to mention a community center which the URA kept dangling as a possibility in PR materials.

⁴ Since Codding Enterprises never had the chance to make a redevelopment presentation we don’t exactly what they would have proposed. The few times it was mentioned in the newspapers a department store, motel and convention center were frequently cited. Objections to the Hahn plans from William Smith sometimes mentioned the city’s Housing Element in the General Plan, and at least one letter from him stated “replacement and construction of housing for low and moderate income families and the elderly should be part of the downtown plan.” April 26, 1973 Press Democrat

NEXT: GREATEST EXPECTATIONS

ROAD TO THE MALL: THE CHOSEN ONE

August 20, 2022September 9, 2022 Jeff Elliott Leave a comment

There were two Santa Rosas in the early 1970s but unfortunately, the Press Democrat opted to only write about one of them.

The newspaper loved to showcase news about their reborn city. Ever since the 1906 earthquake, editors had touted Santa Rosa as a true (but unappreciated!) Bay Area metropolis which would someday bloom into greatness. Now work was wrapping up on the urban renewal projects directly south and east of Courthouse Square. Contractor vans and pickups still crowded parking spots but the tall office buildings with banks on the ground floor showed how much progress had been made in the 1960s. Our city hall complex, with its elaborate water feature in the courtyard and unadorned concrete walls so pure white you had to squint in bright sun, boldly said this was as modern a city as could be found anywhere. Why, if you didn’t know any better it would be easy to imagine all this wonderfulness was in Topeka or Schenectady or any of a hundred other cities.

–

SELF-DESTRUCTION WAS ALL THE RAGE

Future historians will look back at post-WWII America and want to know: Why did we destroy our cities?

During those years there was no shortage of experts praising the gospel of urban renewal at Kiwanis Club luncheons and business roundtables, singing to the famous tune from The Music Man: “Oh, ya got trouble right here in [your] city with a capital ‘T’ and that rhymes with ‘B’ and that stands for Blight…” Around 1960, Santa Rosa was visited by two or three of these blightarian preachers every year.

The message was always that too much of the place was old and rundown, either a slum or on the brink of becoming same – plus there were warehouses and auto repair shops and lumber yards which didn’t need to be anywhere near downtown. A commonly heard metaphor was that these low-income residential and light industrial areas were like a disease threatening the health of the city whole. Surgery was urgently needed.

Replacing all the old stuff with new stuff certainly sounded swell, but what ended up happening was anything but surgical. Those who lived there were the usual poverty suspects – people of color, the elderly and downtrodden – and told to get out because their buildings were about to be torn down. The properties were then purchased by the city using federal and state grant money; after bulldozers scraped everything down to the topsoil, multiple parcels would be bundled together and sold for pennies on the dollar to developers. Where once stood historic buildings and unique neighborhoods there were now gleaming steel commercial districts and/or high rise apartments.

Not every redevelopment project was a complete nightmare, of course; some cities made sure those who were displaced found decent places, even building subsidized housing. Strict architectural design guidelines can be found that ensured new construction would blend better into the existing area, or at least not follow cookie-cutter blueprints.

But more commonly heard are horror stories – politicians using redevelopment as a tool to isolate or smother minority communities, or how the local government oversight was so lax or corrupt the developers were allowed to run amok. Often cited in books and studies among the worst cases was the Bunker Hill Redevelopment Project in Los Angeles, the largest makeover of a city’s downtown core in our nation’s history.

Starting in the 1890s, Bunker Hill was the swanky part of LA. There were Victorian mansions that rivaled Newport’s finest and there was the picturesque Angels Flight tram to carry residents between their exclusive neighborhood and the downtown shopping district. When the rich began migrating to Beverly Hills and elsewhere in the westside “Platinum Triangle” the grand homes were broken up into apartments and boarding houses. During WWII those rooms were filled with aircraft industry and transient workers; afterward it was mostly elderly pensioners (watch a short heartbreaking documentary). By the time demolition began in 1961, there were up to 8,500 awaiting eviction.

The building program was beset by lawsuits and political meddling. Promised affordable housing never materialized. A 1966 audit found the city agency had done little except for acting like an inept real estate broker, spending top dollar to acquire large amounts of land while selling only a small portion of it – and that at cut-rate prices. The public was told construction would be completed by 1975, 1977, or 1979, tops. Today the area still isn’t built out, as Los Angeles recently gave the green light to a 64 story tower on one of the remaining vacant lots.

What the PD avoided writing about was the west side of downtown. Everything between B street and the highway was slated to be demolished, as detailed in the previous chapter. And starting in 1972, the wrecking crews came in and began to wreck.

Other cities had likewise dismantled whole sections of their downtown in the name of urban renewal, particularly Los Angeles (see sidebar). Newspapers in those cities took notice and ran articles describing what would be slipping away. Human interest stories of elderly residents who had lived in the area for years and were afraid what would happen to them; shopkeepers worried about losing their livelihood.

Not so the PD. Except for a single story about George and Tillie Cross, who had operated a breakfast and lunch counter on lower Fifth St. since 1929, little in the local paper personalized the upcoming demolition of so much of our community. There was no downside at all to throwing away about a third of the downtown in their editorial eyes.

Also ignored by the PD was that demolition began at a time when the city still had no plans on what to do with the land, except for vague notions that a convention center and department store would be nice. (Sorry, the city government is using eminent domain to force the sale of your home because a developer might want to build something there someday.)

In this Santa Rosa was following the script of Los Angeles’ ultra-controversial Bunker Hill Redevelopment Project from a few years earlier, where an audit had concluded that such a pre-emptive purchase of land – which might not be redeveloped in the foreseeable future – was wasteful and only proved LA’s urban renewal was a colossal flop.

Also like LA, our Urban Renewal Agency (URA) was directed by a five member board of non-salaried political appointees. They were stolid, civic-minded gentlemen but none had any apparent background in land development or urban planning; as identified in the photo below, there was a banker, an insurance agent, a civil engineer and two who worked in stores.

The Press Democrat didn’t criticize the board or city leaders for stumbling forward without a plan, which really shouldn’t come as a surprise – more important was they had already accomplished their initial objective, which was snagging millions of dollars from Washington for the new urban renewal project. A month after Santa Rosa was hit by the 1969 earthquakes, the mayor and the Planning Director were at the Capitol making a pitch for fast approval of federal grant money.

(A reminder that this article and others concerning the redevelopment saga are all part of the series, “YESTERDAY IS JUST AROUND THE CORNER” which offers an index covering everything on the topic going back to the 1960s.)

That Planning Director was Ken Blackman who would be appointed City Manager in mid-1970, a position he would hold for thirty years. Whatever you love or hate about this town can probably be traced back to Blackman in some way – and that includes the mall. The PD was absolutely smitten with him; a 1983 puff piece told readers he was the “true mayor of Santa Rosa…Council members know they are often considered little more than pawns, or a rubber stamp for Blackman and his staff.”

Blackman was first hired by the city in 1965 and within a year was named Planning Director (he had a degree in economics and a Masters’ in Urban Planning). Besides that job, when crucial decisions were being made following the ’69 quakes he was also Community Development Director and Urban Renewal Agency Director. Since these were all fulltime staff positions, the joke going around City Hall was that he was gonna be the richest guy in town.

Even Blackman’s adversaries agreed he was a very successful City Manager. He kept the gears of Santa Rosa’s (surprisingly large) bureaucracy running smoothly and held sway over the City Council so it would do exactly what he wanted. He spoke fluent politics and a campaign manager told the Press Democrat in that 1983 profile he had “the ability to sense which groups have political power and he takes care of them.” While he didn’t cause people to fear him he was described as aloof and something of a tyrant; the PD’s stock photo of him in the early 1970s had a phone pressed to his ear with a “stern dad” scowl. But make no mistake: Ken Blackman was the bossman in the City of Roses. L’état ç’est lui.

He was the earliest and loudest advocate for razing the entire west side of downtown but was largely responsible for blunders that hampered his goal. The city had made no plans about what to do with rubble from the few buildings needing to be demolished because of earthquake damage, much less the 89 structures in the area Blackman wanted to bulldoze (the county dump near Guerneville only accepted household waste). As explained previously, the city’s solution was to allow any vacant lot to be used as a construction material dump as long as paperwork was filed for a special permit which would waive zoning laws. (There were even appeals asking property owners to come forward as a civic duty.) It would be an interesting research project to see if there is a map of these sites and whether there were any subsequent soil tests for asbestos, lead, arsenic or other toxins.

Another urgent problem was what to do with the 200+ people living in the redevelopment area who were about to be displaced by the demolition. A San Francisco developer tried to build a 226 unit residential hotel at Second and D Streets but found the URA impossible to work with. One of the partners expressed frustration to the PD and said pressure from the Agency staff was making the project “much too complicated.” Comments from city representatives in that article strongly imply Santa Rosa was throwing obstacles in front of the developer because the real hope was to make a deal with the government to buy it (today it’s the location of the state’s Rattigan office building).

After the residential hotel project died in the summer of 1971, there were three very different templates for Santa Rosa’s future I can imagine:

BUNKER HILL DÉJÀ VU Santa Rosa could continue following the blueprint of LA’s Bunker Hill, albeit writ smaller. Let the impoverished residents fend for themselves, scrape the land down to a blasted heath then let it sit idle for years as the city tries to haggle jackpot real estate deals. Meanwhile, Santa Rosa collects millions in ongoing federal redevelopment grants because so much public money has already been dumped into the boondoggle project it’s become too big to fail.

REDEVELOPMENT LITE The 1960s redevelopment near Courthouse Square mainly resulted in those blocks being dominated by banks and office buildings. Santa Rosa could raze the east side of B Street between Fourth and Second for more of the same (which is how it’s now used, with CitiBank, Wells Fargo and Luther Burbank Savings there). The city also could build the convention center at Third and A which had been on wishlists for years. Everything else could be left undisturbed. As this plan would wipe out the Santa Rosa Hotel and a few small apartment buildings, Santa Rosa would probably get a couple of million dollars for relocation money. Funding would be available to buy the property for the convention center but Santa Rosa would have to pass a bond to construct it, as happened with the City Hall complex. In sum, this plan wouldn’t deliver those big federal bux.

BUILD BACK BETTER The existing area west of B street had been mixed residential/commercial since before the 1906 earthquake. Santa Rosa could let it stay that way, making available grants and other incentives for property owners to bring buildings up to code while doing any repairs. Gone would be any debate about what to do with the Old Post Office and Cal Theater because they remain where they always were. The downsides: Santa Rosa already had declared the entire area blighted and received a HUD grant aimed at completely taking down this “slum.” Oh, to be a fly on the wall should Blackman have needed to call Washington and explain we lied on the application because the area is really more of a fixer-upper and, um, could we still keep the money, please?

All signs pointed to Santa Rosa’s project becoming a replay of the Bunker Hill screwup. At this junction Ken Blackman did something that steered us on the path to our world today – he hired a professional who was a bulldog for getting projects done. His name was James Burns.

Kenneth R. Blackman and James K. Burns (from a 1972 Urban Renewal Agency brochure)

Burns was hired in late 1971 and weeks later was named Executive Director of the Urban Renewal Agency after his predecessor quit, saying he was “an advocate of responsible quality development” and wasn’t comfortable with the direction Santa Rosa was heading. The Phase II redevelopment project might not have been his top concern, however; at that moment there was intense pressure to rush approval for annexation and development of the Fountain Grove Ranch to satisfy a deadline set by Hewett-Packard (another long, sordid story).

Santa Rosa was the fourth stop in Burns’ career, having most recently held the number-two position in the Rochester, NY renewal agency. It appears he was all that held that office together; not long after he left four others resigned because of “unbelievable feuds” with his successor, according to the local paper. One of them followed Burns to Santa Rosa where he would work under Blackman.

Before that he was project manager for Bunker Hill. There was a shakeup following that damning 1966 audit and Burns came in after a new administrator took charge. The wholesale demolition and evictions happened before his tenure; he managed street tunnel extensions, grading 35 feet off the top of hill, and labor-intensive landscaping where flowers were continually replanted in a high visibility area to make the overall mess seem slightly less like a hellscape.

Most Santa Rosans in 1972 probably couldn’t name the fellow who previously had the URA Executive Director job (it was Donald Laidlaw, for those playing Trivial Pursuit at home) but James K. Burns quickly left his mark, starting with the ad shown at right; whether it appeared in any newspaper other than the Press Democrat or trade journal is unknown. As far as I can tell, this was the first time anyone from the city proposed a full-blown shopping center in the downtown core.

When the PD asked about the ad Burns replied, “Why have a costly study to determine the proposal when potential developers – the ones who might actually be involved in the project – can indicate the feasibility much easier?” (Of course they could trust developers to honestly report on the projected costs and impact their project would have on infrastructure, safety and the public weal. Nay, sir, why should there be any government oversight at all, including building inspectors?)

Nor did Burns expect to see an actual proposal. According to the PD, “The director said the revitalized agency will want to know the developer’s track record, source of funds, members of his development team, and their interest and motives. At that point, the agency will select the most competent development team and enter into a period of exclusive negotiations.”

While his criteria for picking a developer for such a bellwether project could scarcely be fuzzier, Burns was quite specific per the money he expected to come in: The shopping center not only would be built in record time but construction would bring in $18 million over 18 months. Compare that to the piddling million/year boost from the 1960s redevelopment project and it’s no wonder why Burns’ vision was causing everyone around Ken Blackman’s city hall to purr and mew.

A few days after the close of interviews, the winner of this beauty contest was announced: It was Ernest W. Hahn Inc. of Hawthorne (Los Angeles). Only two other developers had applied.^*

The Hahn Company was a seemingly uncontroversial pick; it was among the largest commercial developers in the West, having constructed about a dozen shopping centers to that date. Prior to that in the 1960s the company built pharmacies, supermarkets and department stores and frequently bid on contracts in the North Bay, including Santa Rosa. They had satellite offices in Hayward and Sacramento, where in 1968 alone the company did over $9 million in construction. Also in the state capitol in the mid-1960s was James K. Burns, whose first job was working at the Sacramento Redevelopment Agency, rising from trainee to project manager.

Still, given the short time window of three weeks to apply, it’s valid to ask whether the URA had a chance to interview all viable candidates. For example, it’s just possible Gentle Reader might recall Santa Rosa had its very own shopping center developer, someone who had built a couple of places called Coddingtown and Montgomery Village.

According to the Press Democrat, Codding Enterprises contacted Burns and asked if the Agency could “defer definite action on the developer selection until three weeks or so.” Company president Hugh Codding was on the City Council but his term would expire April 11. After that he would have no conflict of interest, so perhaps they “could then explore the developer proposal for a downtown shopping center to see if there are any areas of mutual benefit.” The PD article continued:

Asked later to comment on Mr. Codding’s delay request, Mr. Burns said the agency often is criticized for delays. He said the agency’s desire to hear from interested developers was given public notice locally as well as in the Bay Area. “If Codding Enterprises was interested, it should have come forward and explained the situation at that time,” the director said. Mr. Burns said he felt he would still recommend the Hahn firm even if Codding Enterprises had been interviewed because of the nature of far more regional experience.

Having lost the opportunity to negotiate for the largest project in his hometown’s history simply because of an arbitrary deadline, Hugh B. Codding accepted that decision and did everything he could to support the project in order to ensure the completion of the downtown mall just went swell.

Ha, ha, just kidding. By the end of that decade Codding had filed eighteen lawsuits (22, by another count) directly related to the Hahn project – and that was just the tip of the iceberg of court proceedings.

NEXT: MR. CODDING HAS SOME OBJECTIONS

^* The other shopping center developers were Desmond McTavish of San Francisco and the Hapsmith Co. of Beverly Hills.

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