CHAPTER 1

INVENTING SAN DIEGO

What is the matter with San Diego? Why is it not the metropolis and seaport thatits geographical and other unique advantages entitle it to be? Why does San Diegoalways just miss the train, somehow?

It was with some justice, back in 1923, that San Diego's preeminent business leaderJohn D. Spreckels chided earlier generations of city builders for their sincere butineffective efforts. Even a casual observer at the time, however, would have notedhow dramatically circumstances had changed for the better in just the past fewyears. In fact, the city and its economy had grown prodigiously after 1913 as a newdevelopment strategy gradually gained traction. During the first two decades of thetwentieth century, San Diego emerged as a player of note on multiple stages—California,the nation, and the Pacific Rim. After more than fifty years of frustration,indeed failure, to put their town "on the map," San Diegans had at last invented ameans of urban development for themselves that worked. They had found a wayto harness the limited, problematic resources endowing their region such that theycould now attract investment, in-migration, industrialization (of a very peculiarkind, to be sure)—in short, most of the trappings of modern urban growth.

What San Diegans of the nineteen-teens and twenties had wrought remainslargely visible today: an attractive seaport city well-appointed with desirable amenitiesfor business and tourism; a large military presence; impressive institutionsdevoted to culture, the arts, and higher education; a beautiful outdoors-orientedenvironment that includes beaches, bluffs, mountains, and desert; and a sprawling,bustling urban/suburban presence. Beneath that surface, though, lies a complexprocess of successive reinventions: Contemporary San Diego is a product of adistinctive pattern of evolutionary development, the investigation, interpretation,and understanding of which might provide valuable insights for engaged citizensin cities across the United States in search of new opportunities for progress.

San Diego of course suffers from the same kinds of urban problems found almostanywhere, including economic inequality, ethnic and racial tensions, governmentcorruption and fiscal mismanagement, decaying infrastructure, congestion,and pollution, to name the most prominent. Despite these, the city has still founda way to maintain its reputation as a relatively bright spot on the map, even in theface of major crises. Since the global economic downturn that began in 2008, forexample, San Diego has managed to steer clear of many of the difficulties that havemired other cities in gloom. According to federal statistics, San Diego's overalleconomy "not only continued to grow in 2008, but the pace of expansion accelerated,"even "as the rest of California and the nation significantly slowed." The U.S.Department of Commerce's Bureau of Economic Analysis attributed this feat tothree factors: First, federal military spending and defense procurement—longtimeanchors of the local economy—increased; second, the rebuilding activities thatfollowed a series of horrendous wildfires during the previous year generated considerableeconomic activity around the city and county; and third, professionaland business service industry groups contributed greatly to the city's strong performance,offsetting declines in other sectors such as real estate and trade, bothwholesale and retail.

A closer look at two of those areas in particular reveals a great deal more aboutthe invention and reinventions of San Diego's economy, political as well as otherwise.The federal component included not only increasing military payrolls, retirementbenefits, and activities of the Veterans Administration, but also aerospacemanufacturing and shipbuilding. Of greater significance was growth in the informationsectors, which encompass "professional and business services, educationaland health services, leisure and hospitality and government services." The publicsector alone contributed 17 percent to the region's GDP (gross domestic product),a much higher percentage than anywhere else in either the state or the nation. Along history behind that is one of the themes this book will explore in greater detailin the pages that follow.

Before traveling back in time, it will be useful to examine today's San Diegoand the pillars that support its civic culture and political economy. Although thestatistics enumerated in the following discussion may at first appear to be nothingmore than straightforward economic indicators, they demonstrate somethingmore profound about the nature of the community and its identity—issues hardfought and won over generations.

Many people from outside the region identify San Diego first and foremost as aprime vacation destination. The beaches, world-famous Zoo and Safari Park, SeaWorld, resorts to accommodate any taste or budget, and myriad other attractionsbring visitors to San Diego by the tens of millions each year. Their economic impacton the city is tremendous: The "visitor industry" contributes nearly 10 percentof the gross regional product (GRP), or $17.1 billion in 2011, and employs 160,000workers; the transient occupancy tax alone adds $177 million to the city's coffers.Tourism is in sum the city's third-largest source of income. Second largest, as alreadynoted, is government, composed of activities and income derived from state,federal, local, and military agencies. San Diego is perhaps equally well known asa Navy town, a reputation that began to emerge during the World War I era andthat, we will argue, became the city's predominant and most durable signifier everafter. The total economic value of the military in the San Diego region amountedto $22.3 billion in fiscal year (FY) 2007, or 8.3 percent of GRP, which representsa combination of highly diversified direct and indirect spending. In and...