‘There were people there the minute it opened and it has never stopped’ : Horton Plaza Reaps Praises at 1st Birthday

Judith Bishop’s friends warned her. Don’t do it, they said, don’t open an art gallery in the new Horton Plaza. Anyplace else, yes. But downtown San Diego, no way.

“They tried to talk us out of it,” recalled Bishop. “They said people were afraid of downtown and that they wouldn’t come down here.”

But Bishop and her husband, John, ignored the naysayers and, relying on intuitive conviction, took the risk, opening a small, 1,300-square-foot store tucked away in a second-floor corner of the labyrinthine shopping complex.

Today, a year later, business has been so good that Judith and John, owners of Bishop’s Gallery, have opened a second store downstairs from the first. In October, the two galleries will be one, linked by an interior staircase, thus enlarging the original size sixfold.

“I’m a native of San Diego, and I didn’t have a doubt in the world,” Judith said recently, her words strong and confident. “We knew the market was here . . . they just needed someplace to buy. We were right.”

“We were right.” That’s a phrase much in vogue these days as the $140-million experiment known as Horton Plaza celebrates its first birthday.

By almost any standard, Horton Plaza is a success:

- It has had the best first-year retail sales per square foot of any of the 50 shopping centers the Ernest W. Hahn Inc. company has developed.

- Its popularity has brought tens of thousands of people downtown, including longtime San Diegans who had never ventured there before. People poured in the day it opened last Aug. 9 and the flood hasn’t receded. An average of 30,000 people visit Horton Plaza each day. That translates into 11 million people in a year, a figure officials say is conservative.

- It has become, according to the city’s Convention and Visitors Bureau, a major tourist attraction, competing in allure with the San Diego Zoo and Sea World.

- Its architectural design--whimsical, multilevel, an open-air concoction of stairs, ramps, escalators, elevators and terraces washed in pastels--has been likened to Disneyland and has generated nationwide attention.

Even Horton Plaza’s detractors, who question whether the center is too isolated from the rest of downtown, nonetheless like it and call it a positive addition.

But Horton Plaza’s triumph goes beyond dollars and cents. It has transcended its genre. It is just another shopping center like the Golden Gate Bridge is just another bridge.

Horton Plaza was born in a city without a center, a focus, a heart, and in 12 months has put a there there.

For a suburban Sun Belt city seeking to re-create its core and establish an identity beyond the proliferation of bland, high-rise office buildings, that is no small achievement.

“There were people there the minute it opened and it has never stopped. We were all expecting this big drop, but it’s never happened,” said Jon Jerde, the Los Angeles-based architect who designed Horton Plaza. “This was, after all, a project in the middle of a bunch of vacant lots. It was so pitiful down there it was pathetic.”

“It was a gamble and risk of the highest order,” Jerde said, who calls Horton Plaza a “turning point project,” as large cities across America look to regenerate and re-energize their downtowns.

The unique quality of Horton Plaza, Jerde said, is that it has become a “communal adventure . . . and that in itself is an enormous change in direction.”

Dan Pearson, developer of the Horton Grand Hotel two blocks south of the center, is critical about some aspects of the shopping complex--mainly the skeletal look of its 4th Avenue parking garage--but says that does not outweigh the positive changes that have occurred.

“It has exceeded my expectations and has changed everyone’s attitude about downtown,” he said. “There’s just a whole new glow. We got a big winner downtown and we haven’t had that in 25 years.”

Part of Horton Plaza’s success is that it has become a genuine tourist attraction. A spring survey of 1,000 shoppers conducted by the Hahn company revealed that one-third of the people at the complex of 156 stores, restaurants and theaters live outside San Diego County. And a profile compiled by the San Diego Convention and Visitors Bureau found that, of the 7.5 million tourists visiting San Diego last spring, 12% named Horton Plaza--then only 8 months old--as a destination spot.

The trend has continued this summer, carried on by people like Rose Manzone of San Clemente, Patricia Dee of Scottsdale, Ariz., and Honey Smith of Farmington, Mich., all vacationers interviewed one afternoon last week as they wandered through the center.

“Three or four people told me to come down and see it. It’s fantastic,” Dee gushed. “We have large shopping centers where I live, but nothing like this.”

“I’d rather come here than shop in Costa Mesa, and I probably will at Christmas because there’s more variety here than anything near me,” Manzone said.

“This was my first time here and we passed right by it because there is no sign in front saying, ‘This is Horton Plaza.’ We saw the Robinson’s store and I said, ‘Oh, look, there’s Robinson’s. I wonder where Horton Plaza is?’ ”

Few tourists, however, match Honey Smith’s enthusiasm. A sales representative for Republic Airlines, she remembers a business trip a few years ago when Horton Plaza “was just a hole in the ground.”

She saw it again for the first time three weeks ago during another business trip. Smith was so impressed that when she and her family arrived on their vacation last Tuesday morning, they were strolling around Horton Plaza by the afternoon.

“A mall is a mall, but this is wonderful,” Smith said while she and her daughter, Dawn, relaxed on a concrete bench overlooking the main pedestrian causeway.

“This place is happy, it’s delightful . . . where we come from everything is indoors,” said Smith, whose only complaint was she had to pay $5 to park nearby because there weren’t any signs directing her to the center’s free parking garage.

Another indication that the center is more than a collection of stores comes from the response to another Hahn survey question. People were asked what they would be doing that day if they weren’t at Horton Plaza.

About 40% answered they would have gone to another shopping center; 25% said they would have sought an alternative form of entertainment, such as the beach or zoo. But 35% responded that they would have simply stayed home.

“I’ve never run across anything like this before, and it certainly doesn’t fit the mold of any suburban shopping center,” said Scott MacDonald, a Hahn company vice president. “We have very different types of components . . . the hard-core shopper, those seeking entertainment and tourists. It really is amazing.”

From a business standpoint, the center has exceeded projections, though some stores have done far better than others. Only one store has closed, Valcom, a computer store that experienced corporate difficulties that led to the closures of several branch stores.

John Gilchrist, Hahn company president and chief executive officer, said his firm had projected making $200 to $220 a square foot during the first year. “We’ve exceeded that,” said Gilchrist, who has been involved with the project since its origins on paper 14 years ago. “We’ve been extremely pleased with the acceptance over the last year.”

Horton Plaza has consistently ranked in the top 10% of the Hahn company’s shopping centers in monthly sales, sometimes ranking first or second, and no lower than fourth since December, according to Bob Dobson, the center’s general manager.

By all accounts, the busiest of Horton Plaza’s four department stores has been Nordstrom, followed by Mervyn’s, The Broadway and Robinson’s. Center officials estimate that when Nordstrom launched its recent semi-annual sale, 60,000 people poured into Horton Plaza that day, the most since the center opened.

“We’ve exceeded our expectations,” noted Jammie Baugh, Nordstrom San Diego regional manager. “It seems to us that Horton continues to be where people go for an event . . . a destination-type shopping place where people spend time instead of just stopping by and picking something up.”

The reasons for Nordstrom’s success, according to center officials, is that it is more experienced than its competitors in operating downtown stores and employs a decentralized system that allows its buyers to purchase just for San Diego tastes.

“We are able to react to what our customers want and get it out a little faster,” Baugh said.

At the other end of the activity spectrum is Robinson’s, a full-line department store that offers household wares and appliances as well as clothing, in contrast to Nordstrom, which sells only apparel and accessories.

“I think that, frankly, Robinson’s and The Broadway brought in suburban stores. The Broadway and Robinson’s have limited experience in downtowns,” Dobson said. “Specifically, they have stores with departments that sell sheets and towels . . . and things like that.

“It’s going to take a year for them to adjust. Next year they should do better.”

Kim Wenrick, Hahn company corporate communications director, said: “The Broadway and Robinson’s are not doing what they projected. They don’t cater as much to the tourist trade. I think what has to happen is some marketing changes.”

But according to Robinson’s officials, no major tinkering is necessary. They are willing to wait for their market to grow.

“I think Horton Plaza has been a very exciting and positive force for San Diego and it has an excellent future,” said Steven Regur, Robinson’s vice president for management information systems and marketing.

“As far as not being pleased with our performance, that’s a bit off the mark. In the case of Horton Plaza, we were extremely bullish and aggressive . . . maybe more than we should have.”

What Robinson’s wants to avoid, Regur said, is making changes that confuse customers by removing certain items from the store. “We’re more a full-line store,” he said. “We don’t want people wondering, ‘What’s there and what isn’t?’ ”

Executives for The Broadway were unavailable for comment.

Business at the center follows the sun. As long as there’s daylight, the crowds converge. When night falls, the drop in people is significant.

Businesses, particularly the restaurants, continue to complain about a lack of dinner-hour customers. The opening of the multiscreen United Artists movie theaters--so successful the company is contemplating expansion--and the Lyceum Theatre, with two live stages for the San Diego Repertory Theatre company, have helped, but not enough.

“They haven’t helped that much,” said Bill Bender, general manager of the Third Avenue Restaurant. “When we opened at the end of November, we thought there would be more people at night. There’s a need for more nighttime activity.

“However, our lunches are very steady and we’re getting more tourists this summer.”

Fellow restaurateur Jim Murphy, vice president of operations for San Diego Culinary Concepts, which owns the Harbor House on Top of the Plaza, says much the same thing.

“Dinners are disappointing,” said Murphy, who was reluctant to be more specific because of a lawsuit the Hahn company has filed against his firm for not opening another restaurant called America’s Cup.

Dobson, who notes that the center’s first nightclub, called Rio, is now under construction and should draw nighttime visitors, acknowledges that night business is still a tough sell.

“Once the convention center is built, that should help,” he said. “It’s going to take a while. . . . For 30 years there was no reason for people to come to downtown. To change that attitude will take time.”

One area where change is apparent is crime, a source of worry when the center opened because of the street people and transients who had for years literally occupied the area.

Vandalism, graffiti and assaults against shoppers in the center are practically nonexistent, according to the San Diego Police Department.

Perhaps more important, the drop in crime has extended beyond the center’s large, fortress-like walls.

Overall, the crimes of assault, rape, robbery, burglary, grand theft and petty theft decreased 7% downtown from 1984, when the center was being built, to last year. That trend remains stable through the first six months of this year, according to Lt. Claude Gray of the Police Department’s central division.

The decrease is more dramatic the closer one gets to Horton Plaza. Across the street on 4th Avenue, where bars, an arcade and a card room have closed in the past year, crime is down by 35%, Gray said.

“Crime is really low in the center itself,” Gray said, “even lower than at other shopping centers. Even shoplifting is much lower.”

“The architecture and planning may have a lot to do with it . . . there also seems to be a lot of community pride in the center,” he said. “Over a long period of time, a criminal element became rather entrenched downtown. The center has made it much more difficult for them and they’ve moved on. Also, undesirable businesses are leaving the area.”

The force pushing those undesirable businesses away is yet another component of the Horton Plaza story. The center, like an expanding galaxy, has become a catalyst for spin-off developments.

Across the street on Broadway is the renovated, $80-million Grant Hotel.

Under construction next door to the center is a $55-million Omni Hotel.

In the Gaslamp Quarter directly to the east, major remodeling of buildings that once housed adult-entertainment business is under way along 4th Avenue.

To the south, along G Street, two large apartment projects, Marina Palms and Market Street Square, have broken ground.

Judd Halenza is a partner in Meric, National and Halenza, the firm building the 180-unit Marina Palms complex, scheduled to open in May. Asked if his company would have contemplated construction without Horton Plaza as a neighbor, he quickly replied: “Absolutely not.”

“Horton Plaza is the catalyst for that area,” Halenza said. “We wouldn’t have tried it without the center. We were counting on its presence.”

Even Seaport Village, the bayfront tourist attraction that is several blocks and a railroad track to the south, has benefited.

“For a long time we were the only thing here, but there was no vitality downtown. Horton Plaza has added that vitality and that’s very, very good,” said Lee Stein, president of Seaport Land Co., which operates Seaport Village. “We’ve increased our tourist volume because of it.”

Despite these spin-off benefits, there is concern that portions of Horton Plaza’s facade, particularly the open parking garage on 4th Avenue and the blank wall along G Street, are ugly and a slap to its neighbors.

“My biggest disappointment about Horton Plaza is the garage,” said Pearson, the Horton Grand Hotel developer. “Somehow, we’ve allowed ourselves to be stuck with part of a skeleton. It’s a disgrace to the City of San Diego and I lay it on the redevelopment agency.

“At night, with the lights that shine out of it, it looks like a space ship has landed there.”

Voicing a similar complaint is Larry Monserrate, executive director of the Gaslamp Quarter Council, who is responsible for promoting and helping rejuvenate the Gaslamp Quarter, the historic 16 1/2-block area of turn-of-the-century buildings east of Horton Plaza.

“There’s been some spillover effect and there’s more traffic and people on our streets,” Monserrate said. “But we’re still disappointed by the lack of improvements along the center’s 4th Avenue side. The meshing that was promised is not really happening.”

“The project looks unfinished . . . it doesn’t take an expert to see that. It doesn’t show us its best side,” Monserrate said.

The reason that part of Horton Plaza looks unfinished, say the center’s officials and its architect, is that it is unfinished.

Jerde, the center’s architect, said the complex is “raw on three of its edges,” noting that there is 55 feet between the garage and 4th Avenue, space designated for future street-level uses and high-rise office or residential construction. “The garage was (designed) never to be seen except from the inside,” he said.

The second phase of Horton Plaza construction envisions a 300,000-square-foot office or residential building. It would be constructed over the roof of the center’s 2,500-space parking garage and cascade down the side and to the street.

But because of the high vacancy rate in downtown office buildings, second-phase construction is probably several years away, Hahn company officials say.

In the meantime, though, Hahn company president Gilchrist says his firm intends to landscape and add about 10,000 square feet of street-level shops along G and 4th streets.

The transformation of the closed Balboa Theater--a landmark structure next to the center whose vacant facade faces 4th Avenue--into the San Diego Art Center is scheduled for next year, if financing is available.

The opening of the Irvine Ranch Farmers Market in November, at the 1st Avenue entrance at G Street, is also expected to bring new activity to that side of the center.

One unexpected victim of Horton Plaza’s success are several small stores a block away, along 5th Avenue and C Street. They have not survived the new competition and their doorways have turned into derelicts’ urinals at night.

Hahn executives and others say they are surprised by their demise, but note that it was to be expected that weak businesses would die.

The strong business success of Horton Plaza, as a public-private venture, has become the focus of a 154-page case study by the Massachusetts Institute of Technology Center for Real Estate Development.

“The development process led not only to ingenious problem-solving, but also to a series of changes that transformed the project from a conventional shopping center into one that left few rules of the industry unbroken,” the report says.

No one knows that better than Gerry Trimble, executive vice president of the Centre City Development Corp., who negotiated the development deal with the Hahn company.

With the completion of the Lyceum Theatre, public financing for the center--in the form of land subsidies, public improvements and construction grants--is now at $40.2 million, according to Trimble.

“I feel it’s a terrific success story. We were criticized for taking a long time . . . but now it seems better that we didn’t rush into it too much,” Trimble said. “Horton Plaza is an attempt to create spaces. . . . The (people) power is in the sidewalk uses.”

Despite Horton Plaza’s first-year success, there is concern that, as the novelty wears off, so will its attraction, like the luster of an old Christmas toy.

To that, Jerde the architect responds: “There’s no question in my mind it will last.

“It has an endearing eccentricity that people lovingly hold on to . . . people begin to adopt it.”