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March 11th, 2009 NIGEL JAQUISS | News Stories
 

Soccertown Or Suckertown

City Council faces a lot more questions than it has answers before stadium vote.

     
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WHAT IS PAULSON SMOKING?: When the value of stocks, real estate and many other assets have declined dramatically over the past six months, Paulson still claims he will pay the league’s original $40 million asking price for a new franchise.
IMAGE: Lukas Ketner

Like a long, scoreless soccer match finally heading to sudden death, Portland is on the brink of a result on Portland Beavers and Timbers owner Merritt Paulson’s proposal to bring Major League Soccer to town.

After a year of meetings and debate (see “Paulson’s Pitch,” WW, Nov. 26, 2008), City Council is scheduled to vote Wednesday, March 11, on a deal to entice Major League Soccer to expand here.

Negotiated by Mayor Sam Adams and City Commissioner Randy Leonard, the deal calls for Paulson to plunk down $40 million for a franchise. The city would then find about $88.8 million to renovate PGE Park into a venue designed specifically for soccer and to relocate the Beavers to a new, baseball-specific stadium in the Rose Quarter.

Paulson has agreed to contribute some money—about $12.5 million—to renovation costs. But the deal still poses unanswered questions and risks to taxpayers in the economic downturn. Among them:

How solid are the numbers? Here’s the most sobering sentence from the report Adams’ soccer committee issued this week: “The city revenue projections for MLS at PGE Park and relocated baseball are based on the preliminary pro forma provided by Shortstop LLC.” In other words, the city didn’t crunch numbers independently but relied on Paulson’s Shortstop LLC to evaluate its own deal. The projections depend on huge ticket and concession revenues and rely on a visitor tax stream already stretched thin. Meanwhile, money is so tight at the city that Adams’ transportation bureau is proposing to save $1.5 million next year by cutting street maintenance and cleaning, and $153,000 by turning off streetlights. Although the pots of money are separate, Adams and his colleagues will have to explain to voters why replacing minor league soccer with Major League Soccer is more important than providing basic services.

Why is Multnomah County so angry? For years, county leaders watched passively as the city created 11 urban renewal districts all over town. Those districts siphon property taxes from the county, schools and other taxing jurisdictions and will drain about $20 million from the county’s general fund this year. That’s a big number in the context of the county’s $45 million budget deficit. But Paulson’s deal proposes dipping further into urban renewal by using $18.5 million from the existing Convention Center district to help build a baseball stadium and $15 million from a proposed district around PGE Park that stretches the statutory requirement that a district suffer “urban blight.” Multnomah County Commissioner Jeff Cogen says, “I think it’s fair to say this calls into question how faithful the deal is to the underpinnings of urban-renewal law.”

What’s FUR got to do with it? In 2007, a group called Friends of Urban Renewal sued the city over plans to expand the River District Urban Renewal Area and to use some River District money to build a new school in the David Douglas School District (see “PDX’s Robin Hood Tale,” WW, Sept. 26, 2007). That litigation has dragged on for a year and a half, stalling other projects. It’s not hard to imagine FUR or other opponents challenging any attempt to declare the area around PGE Park as blighted. “We have a clear concern that urban renewal has just plain been abused,” says former PDC chairman Bob Ames, a leader of FUR. “This winds up continuing to cost a lot of basic services and cash flow.”

What do other cities know that Portland does not? In recent months, three cities—Montreal, Atlanta and Miami—dropped out of the competition for the two MLS franchises the league planned to award this spring. Corporations are exiting sports sponsorships and advertising. And David Beckham, marquee star of the MLS’s L.A. Galaxy, decided he’d rather play with the big boys at AC Milan in Italy than return to America. Will our “Soccer City” support MLS in the long run? Nobody knows. Here’s what Adams’ task force said: “The task force requested but did not receive from [Paulson]—and did not have time on its own—a market research survey measuring demand for MLS within the Portland area.”

Where are the votes? As of press time, WW could count only two yes votes on the five-member City Council: Adams and Leonard. Commissioner Amanda Fritz has raised multiple concerns about the deal. As for Commissioner Nick Fish, he’s a diehard fan of the University of Portland women’s team. And Commissioner Dan Saltzman’s chief of staff, Brendan Finn, is a soccer fanatic. But from a larger perspective, Fish and Saltzman are up for re-election next year. Both must consider whether there’s any political upside to helping out a wealthy sports team owner at the expense of county social service programs and school funding at a time when the city is cutting basic services.


FACT: A key assumption in Paulson’s numbers is that 2011 ticket revenues from baseball will be 95 percent higher than revenues in 2008.

READ IT: For updates on the Council hearing, go to WWire.

 
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