"Redeveloping downtown was a big political deal for the city," Dwayne Milnes, Stockton's city manager from 1991 to 2001, said in a telephone interview. "Downtown was deteriorating, businesses had left."

Affordable Housing

Then Stockton hit the radar of San Francisco Bay Area homebuyers, in search of affordable alternatives to escalating home prices. The city's population grew 20 percent in a decade. Tax revenue rose on a burst of homebuilding. The city began pouring funds and debt into sprucing up the downtown and developing the waterfront in an ambitious plan to spur economic activity.

"Our leaders were dazzled by rosy projections and their desire to jumpstart downtown revitalization projects," David Renison, president of the San Joaquin County Taxpayer's Association in Stockton, said in a telephone interview. "We're going to be paying the price for a long time."

In March 2004, the council agreed to issue $37 million in bonds to fund a $114 million plan to develop the waterfront. While acknowledging the financial risks, the lawmakers said the plan would draw people to return to the downtown and millions in private investment. Lawmakers said they were satisfied that the risks of the project, which eventually grew to $145 million, would be contained.

'Acceptable Risk'

"We're putting two-thirds down," then-Council Member Larry Ruhstaller said in debating the issue. "We're financing a third. That's a pretty acceptable risk in my eyes and that's why I'm for it."

Then-Council Member Richard Nickerson, the sole dissenting vote, expressed doubts and said he'd prefer to build the venues one at a time.

"We've strained everything we've got to get to a place where we can finance this project," Nickerson said during the meeting. "And if it doesn't go perfect, if the state is in trouble, if the federal government is in trouble, if we in this city are in trouble, heaven help us."

Diamond's Million

The ballpark and arena were completed the following year. In 2006, the city paid singer Neil Diamond, whose last Top 10 hit was in 1983, $1 million to perform at the arena. In 2007, the city bought the 8-story Washington Mutual building for $35 million with the intent of making it the new City Hall.

While the city borrowed for buildings, it also ran up compensation and retiree-health liabilities it now can't afford.