News Scrapbook 1985

San Diego, CA (San Diego Co.) Evening Tribune (Cir. D. 127,454)

AUG 8 1985

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San Dlegti. Thur.;da~. Augu. t --T1/ ,,,, After a decade of peril, Ernie Hahn unveils a pearl By Robert Bli tfiZr DOWXTOWN-33 1'1-Jbur,, Sufi ~mer F or. MORE than a decade now, ever sinc:e he made a commitment to develop the 1) N , 1965 ~-· CJ

fallen in love with during fifth grade. They were both 21, and she was earn- ing $105 a month as a secretary. "We'd save up all month," Hahn re- calls, "so we could go out to a dinner that cost $1.25.'~ .

downtown or the future in San Diego, Ernie Hahn has been a man m peril. He wa m peril or petulant politi - cians, in peril or my planners, m peril of bankers ~ureaucrats in five public agencies and mortgage lenders and staggering jumps m the interest rates and cuts m the city budget and a recession. He was even investigated (and cleared) by the E!.EC Somehow, Hahn survived, and the story of his Pauhne perils - now so happily concluded with the opening tomorrow of Horton Plaza - makes/ the best tale of the summer · "tveryone thought Ernie was crazy to do this, myself included," said John Gilchnst, president of the Ernest W. Hahn Company, "But thJS. is having an effect on an entire city. It's a statement that can help make ~n Diego great " 7 Uchnst's point That Hahn has not Just built a shopping center, not even a new kind of shoppmg center, nor ha. he imply helped redevelop a downtown. He refers you to a recent piece m the Wall Street Journal whic:h notes that Hahn ha~ brough~ a fee l or Disneyland to something as mundane as a retail shopping center and created something absolutely new on the American scene The Journal article offered a kmd of backhanded compliment from a San FrancJSCo architect He felt the proJect was •·so kitschy, so L.A." that lt would become "one of the most dangerous projetts in the U.S. be- cause it will .. be immensely popu- lar " But there is httle danger that other Horton Plazas wlll start sproutmg on the American scene There aren't too many Ernest Walter Hahns around men who have the vi- sion, drive and know-how to turn a piece or downtown blight mto an ex- c1tmg place for people, even for peo- ple who arc not necessarily m the mood to buy hard goods Horton will have more than 100 shops and four department stores and a farmers ' market. But it will also have a hotel and two live the- aters and an art museum and a mgbt club and seven movie theaters and 18 restaurants Hahn explamed, "These things bring people Without JX'Ople, shop- ping Cf'nters would be very boring - and very unprofitahlP ·· Hahn admits he did not always have his priorities so clear. In post- war AmPrica, df'velopcrs (Hahn in- cluded) thought they were dealing with concrete, hnrks, mortar and glass, heat and light and landscaping and rost-per-!l(Juarf' fool. But, in tackling Horton, somewhere between 1974 and 1983, in thf' midst or his per- ils, he saw in a new way how import- ant people were in the f'quation In May 1983, at a mcrting in Las Vegas. Hahn told the philosopher-ar- chitect R Ruckmin~ter Fuller, "We are finally listening to the people in- stead of listening to our architects and our own vanity. we·re finally lis- tening to peoplf' and what they want, how they want to live, and that's ll'ading to some of thl' more innova- tive bazaars and marketing places because that's what people want to do.' Some see Horton as coming a step closer to the mile high vertical cities of the future as foreset'n by Paolo Soleri, another philosopher-architect. But the comparison prompted David Raphael Singer, a local arrhitect, to voice his concern. "In some respects," Singer said, "Horton gives the impression of being a walled city within the city. It opens out to Broadway. But on the other three sides, I see a lot of blank walls. It will be interesting to see how the existing businesses nearby survive. You know, the butcher, the baker, the dry cleaning establish- ments who serve the people who live and work downtown."

The middle part of the Hahn story is boring Hard work always is, and that was Hahn 's life, seven-day weeks for the next 20 years. After his World War ll service in the Navy, Hahn got into construction and then development of sbopp10g centers. Since 1967, he bas opened three a year, some the biggest, poshest in .._~:.a.....i , town, like the Town and Country Center in Houston, and The Fashion Show on the Las Vegas Strip.

People who know Hahn best re- mark on his ability to work with peo- ple. To Hahn's only son, Ron, 41, who worked with his father for yea~ be- fore be went into the development business for himself, this means Ernie knows "the art of compro-

mist."

"My dad has built more than 40 big regional centers," Ron Hahn said. "In all but five of them, he had joint partners. And, sooner or later, he was in a positJon_to take 'em out or Please see HflN, Page 34

ERNIE HAHN: NOT JUST A SHOPPING CE 'TER

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Singer admitted that he has seen Horton only from the oulqide. "Ev- eryone hopes this will be successful. But I thmk we will have to wail and ~ee." Hahn can only grimace at talk like th!s. "The media have been covering this story as if it were an either-or proposition 'Will it work or won't it?' The truth is. if we don't make this work, we're in serious trouble for 100 years." For most of hls life, Hahn has been making things work. He was born al- most 66 yearq ago in the Yorkville section of New York City, son of a German baker who had emigrated from Cologne, and a mother from Vi- enna The Hahns moved to Los Ange- les when Ernie was 2. His dad baked for the Pig 'N Whistle chain before he died at 71. Ernie pumped gas and carried hod ln the summers - for 25 cents an hour. A straight-A student at Luz- inger High, he won a scholarship to UCLA but turned it down because "there was a depression and r needed to work." He got a job as a $70-a- month messenger at the Bank of America. In four years, he had moved up to head teller, at a salary of $100 a month, enough then to marry Jean Briley, whom be had .. *Hahn CDnt111ut'd From Page JJ ;2~- 'b 1 squeeze 'em out But be didn't. He'd say, 'The more people that play, the more deals come back in the long run ' That was bis basic philosophy. He has helped a lot of people mate a lot of money." Jim Barrett, Hahn's former attor- ' ney rn Los Angeles, said, "Ernie would always say, 'You're going to deal with these people again. So don't try to grab every penny. Leave a 1it- • tie on the table.'" Barrett pointed out Hahn became a millionaire - al- most 200 Junes over, according to Forbes Magazine. Hahn would move bis corporate headquarters from El Segundo to San , Diego. He would fly bis own Beech- • craft and bis own $3 million jet, learn to master the sand traps on a hun- dred golf courses, develop a pretty , good backhand on any old tennis . court, become an excellent fly fisher- • man, and build a two-bedroom home.. in Rancho Santa Fe. With 8,500 : square feet of floor space, it may be the largest two-bedroom home in the • county. It sits on 175 acres, bas a guesthouse, a barn and stables for Jean's SIX horses, a swimming pool • and a tennis court. Hahn made his commitment to : build Honon Plaza in 1974. If real • estate development were the movie business, this would be a job for Cecil • B. DeMille. The wonder is that Hahn could take on so many other projects ,as well. But Hahn finished six major • shoppmg centers since 1974 and launched nine more, merged Erne.st W. Hahn Inc with Trizec, a Canadian conglomerate (pocketmg $90 million cash in the deal) and contributed er Medical Center in Palm Desert. Hagn serves on several local boards - notably Sc~ qinic and Research tQ.._un~ti2n.J!l La Jolla, and U~of SanJ)iego. James ColachJS, aTe1IowtJ'SI) trustee, said: "Many get on boards and it's a token thmg You hardly ever isee them./ Ernie's always there at every meet- ing. And he does bis homework." more than $10 million dollars to a variety of charitable and educational , institutions, including the University of Southern California and Eisenhow-

Hahn had no shortcuts at Horton. News dippin in the Horton-Hahn file tell a story of continual delays, postponements, passed deadlines, angry politicians, and unbelieving city planners. In 1975, an assistant city manager recommended the city not renew Hahn's exclusive rights as primary developer. In 1978, editorial writers supposed that Hahn was using the Horton deal to gain credibility for bis projects in Fashion Valley and the Unive~ity Town Center. In 1979, a city planner said in public that Hahn had "bit off more than he could chew." In December 1981, one bu- reaucrat told a reporter be suspected Hahn had no plan at all, that Hahn was a con man with a good supply of only one thing: "cow chips." Nor did it help when Fred Schnau- belt, a real estate syndicator who was then a city councilman, sued his council colleagues to stop them from giving the city away to Ernest Hahn. Schnaubelt's beef. that the city had to pay $12 million for the land, but was selling it to Hahn for $1 million. Schnaubelt got a lot of ink, but be did not stop a project that made econom- ic sense to Mayor Pete Wilson and the rity's power structure - U Hahn could only bring it off Hahn brought it off, partly by re- selling everyone concerned, again and again, despite the simultaneous rise in interest rates and construc- tion costs, which made it hard to get Horton started. Hahn's cash from the Trizec merg- er enabled bim to lend his own money to the city's development agency (which needed money to buy the land to give to Hahn). His loan to San Diego was at IO percent when the current interest rate was 13. When the city couldn't make good on its commitment to build a 3,600-ear parking garage, Hahn said, "O.K., we·11 build it." The move saved the city $60 million in construction and finance costs. Hahn lost $11 million. He was also supposed to get 30 per- cent of city parking revenues at Hor- ton in perpetuity. Over the decade, major tenants fell in - and out. "Three or four

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by the citizens that it was playing X- rated movies to stay afloat). Hahn took plaster castings of the Lyceum and the Bradley, rebuilt the old bulks and put them back into a master plan that now incorporates nine dif- ferent, but homogeneous, architec- tural styles in 49 pastel colors. And be gave the Lyceum Theater two stage.s - for $1 a year. Supporters ,and fonner foes alike see that Ernie Hahn bas brought it off and compliment him. Dean Dun- phy served for se.en years as presi- dent of the Centre City Development Corporation, the city's non-profit redevelopment ann. He said, "I doc't think anybody re- alized how sincere Ernie Hahn really was. It's perpleX1Dg, how I had to persuade some members of the board. So many of them wondered. I guess there are always a hell of a lot more doubters than there are pioneers. Let me iell you. A guy has to be damn dedicated to do what Ernie bas done. He's run his costs over substantially. But the city will not be spending another dime." Dunphy said the city will end up investing no more than $25 milhon in Horton, compared with developers' costs of $140 million. In return, the city will take in more than $2.3 mil- lion a year in property and sales taxes from Horton and from the Omni International Hotel (also part of Horton Plaza, expected to open in 1986.) He calculated that the Horton project bas already contributed to San Diego's economy by creating (,000 construction jobs over the past /

three years. And now, he said, the retail stores will employ 3,000. Fur- thermore, land values in the sur- rounding areas of downtown have quintupled in five years - from $17 a foot in 1979 to at least $85 today. Lucy Killea, assemblywoman in the 78th District who wondered about Hahn when she was on the City Coun- cil, said, "Without Ernie Hahn's pioneering, there would be no down- town development." Fred Schnaubelt, the councilman wbo sued to stop Hahn, said, "I ad- mire Hahn. Whatever criticisms he got from me, no matter who said what, he was always above pettiness, without any hint of arrogance. He un- derstood my position and never made me feel it was an ignorant po- sition." Furthermore, Schnaubelt said, Hahn has "found the key for re- vitalizing downtown. I see that. I ad- mire it." Hahn may not be arrogant. But he is demanding. Once he'd sold mer- chants on coming into Horton, be in- sisted they put big bucks into their decor. "We wanted everything in Horton to represent everyone's best," Hahn said. He avoided striking deals with na- tional chains. "If a Hallmark wanted to come in." said Sonny Sturn, one of Hahn's lieutenants, "OK, but they had to do something different. We didn't want their shop in Horton to look like any other store in the country." Hahn gives much credit to people such as Sturn, who bas been conduct- ing VIP tours around Horton for months now, convincing most visi- tors what a symphony Horton could

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years ago," said Jim Nordstrom president of the giant, Seattle-based department store chain. "Horton didn't look very good to me. But Ernie has always done what he's promised." Nordstrom has 41 loca- tions. with three new ones coming on line this year, all built by Hahn. "Hahn is the best salesman I've ever seen. He's never failed to convince us to come into one of his centers " Nordstrom said ' Then there were the history huffs. They sued to stop demolition of the Bradley Building and the Lyceum Theater (a treasure so little valued

morning while be listens (curre~tly) to a series of audio tapes on the lives of men be admires: Stanley Marcus, J. Paut Getty, David Rockefeller, Ray Kroc. On a toor, Hahn stops to talk three gardeners, then spins his Mercedes off to the northern half of the property. He has set bis fences back to create bridle trails "for Jean and for the neighbors." He bas also dedicated 32 acres here "for open space, in perpetuity." . . He has three lakes that sit in a little valley below the San Dieguito Dam. One of them, floating with lily pads and surrounded by purple ja- carandas, is filled with black bass. It is guarded, be said, "by eight egrets and three blue-white herons." Hahn admits be has never spent enough time with his th!ee.children,_ &ut they all live in the North County. He and Jean spend more time with them now, and with their three grandchildren and nine great-grand- children. Ron, 41, runs his own development company (and does some things in partnership with his diid). Charlene, 44, is a homemaker. Christine, 37, owns Village Travel in Rancho Santa Fe.

be - when all anyone could hear was jackhammers. And be is high on John Gilchrist 41 who bas been with Hahn since be ·w~ 20. "John's been like a son to me," Hahn said "And_, for the past three years, he's provided _the leadership to keep everything going. I am lucky to have had such a great team." Lois Stockert, Hahn's secretary for 25 Y.ears said she regards Hahn "like a broth~r." No wonder. Insiders say Hahn bas made Stockert a million- aire, with stock in the company, a home at Whispering Palms and a membership in the Fairbanks Ranch Country Club. Jean Hahn, another important member of the team, presides over the Hahn estate in Rancho Santa Fe, training her horses by day (s~~ ~on an endurance riding competition in a recent Senior Olympics), ready to en- • tertain with Ernie by night. She likes to fuss over the three Hahn schnauzers, and making beds for in- coming house guests is not beneath her. She and Ernie do their own cook- ing. The Hahns are partial to western art and have an Olaf Wiegborst bang- ing on one livmg room wall. They have a wine cellar. Their master bedroom has an eastern terrace overlooking a lemon grove toward the morning sun Hahn has a workout room, its floor filled with weight machines. To keep bis fighting weight at 168, be does 20 minutes on a stationary bike each

The Hahns look for chances to get everyone together. They had a fami- ly rendezvous last summer to part1~- ipate in the first legs of the Olympic Torch Run in the North County. Ernie bad fun with them: he said he'd arrange for pictures, but then an- nounced the film "didn't turn out." On Christmas, however, be presented each of the 10 Hahn runners with elaborate photo albums celebrating their separate torch runs. On July 7, he and Jean had an old- fashioned picnic here for the clan. But they haven't had a general fami- ly gathering since then. There are all these summer parties, all these char- ities pleading for their presence, and all the events surrounding this open- ing at Horton. On Sunday, when the Hahns will take a long delayed vacation to Can- ada, perhaps Ernie Hahn will h~ve a chance to think about the.meaning of all this. He knows he is a success because "I like people, I am curious, and I like to work." Of what he gives to others, he said simply, "It makes me feel good." This week, he is ~eel- ing especially good.

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In 1983, Ernie and Jean Hahn gave $1.5 million to Children's Hospital to , cap a $7.5 million drive for a new wmg, the Jean Hahn Children's Sur- • gical Pavilion. According to Tom " Gleba, the hospital's vice president : for development, "Ernie and Jean are always here, not onl when we need money, but with their ideas, too. Ernie's great for listening to us talk • a thing through, then coming up with the capsule formula we've been look- "' ing for.''