LOS ANGELES -- San Diego defaulted Friday when it failed to make a scheduled $1.61 million debt service payment on assessment bonds issued in 1987 to fund land improvements in the city's Mission Valley.

City officials want to meet late this month with the 135 affected bondholders in a last-ditch effort to restructure the troubled issue. In August, bondholders rejected a restructuring plan developed by members of the original bond financing team.

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