The paper is concerned with the formation of polycentric cities. The model we introduce includes two types of developers and planning authorities. Developers’ characteristics, such as scale of operations, availability of own-capital and time preferences lead to various decisions concerning the choice of location and development investment. They are influenced by planners’ decisions concerning developable locations. We present a cellular automaton model that simulates the interaction of various types of developers and planning authorities. We demonstrate that the joint dynamics of decisions by impatient, low scale developers, with others who are willing to wait a long time to realize returns on their investment can lead to the creation of new urban sub-centers.