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April 1st, 2009 BETH SLOVIC | News Stories
 

Randy Shoots

But can he score a deal to bring big-league soccer to Portland?

     
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TIMBER RANDY: Commissioner Randy Leonard was the chief negotiator in the city’s efforts to bring Major League Soccer to Portland. He’s only been to one Timbers soccer game.
IMAGE: Craig Mitchelldyer

Three short weeks ago, the prospect of drawing Major League Soccer to Portland seemed about as certain as Bikini Girl winning American Idol.

Portland certainly seemed to have a strong case compared to other cities vying for an expansion franchise—a strong fan base for the minor-league Timbers and a natural rivalry with MLS’s newest team in Seattle.

But one huge—and more basic—question loomed: Would a third member of the five-person City Council join Commissioner Randy Leonard and a scandal-plagued Mayor Sam Adams to OK spending public money on the project? During a budget-busting recession, would another elected official agree to redesign PGE Park for Major League Soccer and build a second stadium for Portland’s minor-league baseball team, the Beavers?

As everybody now knows, the answer was yes. But just days before the proposal went to City Council, neither Adams nor Leonard knew that, so they huddled to deliberate their next move.

“Sam and I actually talked about, ‘Should we actually have a hearing where we don’t know we have three votes?’ and my feeling was yes,” Leonard says now. “We’d worked too hard to just say, ‘We can’t nail down a third vote, and we don’t want to take a chance.’ I thought we had to take a chance.”

Adams didn’t disagree, so the two moved forward without that third vote in hand, a rare gamble in City Hall, where most decisions can be predicted easily before a hearing. Their bet paid off. At the end of a six-hour hearing March 11, Commissioner Dan Saltzman became the decisive yes over the objections of Commissioners Amanda Fritz and Nick Fish. The city would back the $88.8 million deal with Merritt Paulson, majority owner of the Timbers and Beavers.

The following week, MLS Commissioner Don Garber announced at a rowdy Portland press conference in front of hundreds of boisterous soccer fans that MLS would award Portland a new franchise, to start play in 2011.

Many people can take credit for these developments, if “credit” is ultimately what Portlanders think this deal deserves. Paulson, son of ex-Treasury Secretary Henry Paulson, had the idea and deep pockets (with help from his father) to pay $35 million for a team in the highest league of U.S. soccer.

Adams supported Paulson’s bid from the beginning, reversing the position taken by his predecessor, Mayor Tom Potter, who once told Oregonian sports columnist John Canzano his voters didn’t elect him “to build stadiums.”

And there’s Saltzman, who voted yes only after amending the financing plan to remove a slated $15 million urban renewal district around PGE Park. That proposed district had infuriated Multnomah County officials and school leaders who said the district would cut into their declining budgets.

Leonard is quick to praise Adams. And Adams is nearly as gracious, saying, “Randy’s done a fantastic job working with me.”

But there is serious doubt inside City Hall that such a politically wounded mayor as Adams could have successfully taken the lead on this high-stakes public deal without Leonard’s hard bargaining with Paulson.

Which raises two questions:

Why did Leonard, who has attended only one Timbers game in his life, do it?

And with the first key deadline looming April 15, and Leonard busy as usual on other hot-button issues, such as wresting control of the “Made in Oregon” sign from the University of Oregon, what are the chances Leonard can close the soccer deal? After all, there’s now a $15 million hole in the package, shaky financial assumptions and a trail of local leaders upset by his brash approach.

The first question, why Leonard championed Paulson’s cause, is easy enough to answer on the surface.

“My primary motivation is the economic activity it creates,” says Leonard.

Numerous cities have demonstrated that the economic benefits of building sports stadiums are sketchy at best, although elected leaders often claim it boosts cities’ financial well-being, says Jules Boykoff, a former pro-soccer player who teaches political science at Pacific University in Forest Grove. “You cannot find an independent sports economist who will support that assertion,” he says.

But Leonard remains convinced that committing public money to Paulson’s project will pay off for taxpayers in the long run. He and others say the $35 million to $37 million renovation of PGE Park, and the $48 million construction of a new minor-league baseball stadium, will create 600 well-paying construction jobs almost immediately, plus 300 long-term jobs in everything from food service and marketing to sales once MLS begins play in 2011.

Beneath the surface, there are obvious political benefits to the deal.

John Mohlis, secretary-treasurer of the Columbia Pacific Building Trades Council, sat on the task force convened by Leonard and Adams to scrutinize the deal before it went to City Council.

Also a member of the Portland Development Commission, Mohlis says the jobs created for the building trades council’s members through this project are essential as local homebuilding and other construction projects grind to a halt. The deal can’t hurt Leonard when it comes time for the building trades council, which represents numerous unions, to endorse candidates. “It’ll certainly be a consideration,” Mohlis acknowledges.

And of course, tapping into soccer fans’ passions in this self-styled “Soccer City USA” helps Leonard. In Seattle, a sold-out crowd of 33,000 attended the Seattle Sounders’ first MLS game March 19. And in Portland, 1,500 people have already put down $50 deposits on season tickets for Portland’s MLS debut, even though it remains two years away. If Portland can replicate Seattle’s enthusiasm, that’s a lot of happy voters.

Perhaps more importantly, Leonard has burnished his reputation as a deal maker, which certainly helps a politician whose profile—for all his attention-getting bluster about neon signs and public toilets—is now so low outside City Hall he doesn’t even have a Wikipedia entry.

Rumors percolate that Leonard is considering a bid for governor in 2010 or mayor in 2012, even though his old campaign website, RandyLeonard.com, is inactive and was recently advertising trips to Scotland. Leonard neither dismisses nor addresses those rumors. “Why would I?” he asks. (He’s right: No one ever believes a politician who denies harboring political ambitions.)

Leonard, the former longtime head of the Portland Firefighters Association, is prone to rush into burning buildings, both literally and figuratively. And his work to rescue the MLS deal is evidence.

Before Adams was sworn in as mayor in January, Leonard worked with the then-commissioner to form an 18-member task force to scrutinize the project. Potter was still mayor, however, and there was a limit to how much progress could be made given that Potter didn’t support a stadium project.

After Adams replaced Potter, the timeline for a deal became extremely compressed because MLS wanted a financial plan from Paulson by March. And, according to Leonard, the task force was bogged down in side issues like where to move Paulson’s AAA baseball team, although it hadn’t even settled the question of whether it supported the soccer bid.

At the same time, the rest of City Hall wasn’t exactly debating the merits of using city-backed bonds to help a wealthy businessman rebuild one stadium for soccer and construct a new stadium for baseball. Instead, Adams’ admission that he lied about his sexual relationship in 2005 with a teenage legislative intern consumed City Hall, and Adams’ new administration hunkered down to focus on political survival. That’s also when the fire alarm went off in Leonard’s brain, he says.

“It wasn’t that it was slowing down; it just wasn’t happening,” Leonard says.

To Leonard, it didn’t matter he had broken very publicly with Adams at the time over Adams’ lies about his sex life. When there was finally a chance for the city to commit to MLS, Leonard talked with Adams. It was the end of January and beginning of February.

“I said, ‘Sam, we need to figure this out,’” Leonard says. “Sam and I obviously had a very tense relationship, particularly right there in the beginning. But Sam and I were working on this project…. I’ve never said I don’t respect Sam. I’ve never said I don’t respect his work ethic or his skills. I’ve been real clear I have a lot of admiration for Sam. That doesn’t change. It just makes it all the more important to focus on the job at hand.”

Leonard’s move gave cover to the mayor, who could have been left dangling if he were the only one pressing for a deal. But that’s not why Leonard says he forged ahead.

“I saw it as an opportunity to take Portland to the next level,” Leonard says.

Adams’ reasons, either because of his predicament or despite it, are equally lofty. “I want Portland not to be the biggest city but the best, and part of that is to raise our international profile,” Adams says. “And the world speaks the language of soccer.”

The second question of Leonard’s ability to pull off this deal is just as tricky.

If Paulson is to begin revamping PGE Park in September, the city must ink a more detailed commitment on where to build the new baseball stadium next to the Rose Garden in the Rose Quarter by April 15. It must also finalize a second binding financial agreement (approving the issuance of bonds that might not be marketable in this economy) by Aug. 1.

The rough agreement the city approved last month includes a proposal to use $18.5 million in public money from the urban renewal district around the Oregon Convention Center, and $31 million from the city’s Spectator Fund (generated by ticket surcharges at PGE Park and the Rose Quarter, plus parking fees there). There’s also $12.5 million from Paulson and his family; plus an additional $11.8 million from pending state legislation (to allow income taxes on soccer and baseball employees’ and players’ salaries to boost the capacity of Portland’s bonds) and additional changes to the way the city services its debt.

That legislation, House Bill 2531, introduced by Rep. Tobias Read (D-Beaverton), has a good chance of passing, says Read. But a spokesman for Gov. Ted Kulongoski said Tuesday that legislation would not be a priority of the governor’s.

That leaves the biggest short-term problem: the $15 million hole in the plan’s funding.

To fill the $15 million gap created by objections to the proposed formation of a new urban renewal district around PGE Park, Leonard and Adams will be forced to be creative. They’re debating new food and beverage taxes at the two stadiums.

Multnomah County Chairman Ted Wheeler, other county leaders and representatives of Portland’s largest school district strongly objected to the idea of creating that new urban renewal district around PGE Park because it threatened to take property taxes from their already diminished budgets. Yet the possibility of creating a new district isn’t dead, meaning property taxes around PGE Park could end up supporting the project anyway.

Saltzman, who objected to the district before, says that could be OK as long as county and school officials are included in the new discussions and the district isn’t any larger than necessary.

Paulson says it’s the city’s obligation to plug the $15 million hole, but Saltzman disagrees and says Leonard’s success will depend on how imaginative he is prepared to be. “[Randy’s] fixated on, ‘It has to be city money,’” Saltzman says.

Even if Leonard pulls that part off, longer-term questions lie ahead.

There’s the uncertain long-term prospects for the 16-year-old MLS. The recession has forced much more established sports leagues like the NFL, NBA and MLB to make deep cuts. “We live in a crowded sports marketplace, and we’re trying to insert ourselves as the last kid on the block,” admits Garber, the soccer commissioner. “We don’t live in a market like every other market in the world where soccer-slash-fútbol dominated the life of everyone from the media to the fan.”

While American soccer enthusiasts have predicted for decades that high-level soccer is poised to take off in the United States, generations of soccer-playing kids have yet to translate into more than a blip when it comes to the television ratings that really drive the money in pro sports.

And there’s the deal’s dependence on strong cash flow from a powerful sports organization­­— the Portland Trail Blazers—unenthusiastic about the deal the city cut with Paulson. It is premised on the assumption that the Blazers, whose lease at the Rose Quarter runs through 2025, will continue to pour $2.4 million a year into the city’s Spectator Fund through surcharges on Blazers tickets and Rose Garden parking fees. (By comparison, PGE Park contributes $1.20 million annually.) The city hopes to use that fund to support construction bonds for the two stadiums. But that would mean less money available from the fund for the Blazers’ ambitious plans for the Rose Quarter or for maintenance of their home arena. And although the Blazers have no official say in how the Spectator Fund is spent once it’s in the hands of the city, J. Isaac, a vice president for the Blazers, says there’s no guarantee the Blazers will continue to support the Spectator Fund as they do now.

“If something did happen with the Trail Blazers or the arena business in general, that portion of the revenue that would be covering the new PGE Park bonds would be at risk,” Isaac says. “The one thing we do know is, like a lot of businesses, the arena business is cyclical and the pro-sports business is cyclical. You have good times and you have bad times.”

The ultimate hammer the Blazers wield is the prospect that billionaire owner Paul Allen could try to break the lease and move Portland’s signature 38-year-old NBA franchise to another city. That’s certainly at least a bargaining chip given that Allen lives in Seattle, owns the NFL’s Seahawks, and his hometown’s team just moved to Oklahoma City. Leonard scoffs at the notion, and Isaac says the team is committed to staying in Portland.

At the March 20 press conference to announce MLS’s expansion into Portland, Leonard butted in before the mayor to be the first elected official to speak. For a moment it seemed Leonard was grandstanding. But Leonard also seemed to be trying to give more of the limelight to Adams. “If Sam Adams had not been mayor, we would not be here,” Leonard insisted.

Paulson then handed Leonard a Timbers jersey that, for a brief instant, shattered that assertion. As Leonard waved the jersey in front of television cameras, the gathered crowd probably couldn’t help but notice the number on the jersey. Leonard was No. 1. Then Adams spoke. He too got a jersey, and he too was No. 1.

It remains to be seen where taxpayers rank.

Toilets And Big Neon

What Ramps Randy Leonard Up


IMAGE: Patrick Morgan

Commissioner Randy Leonard has always had a nose for headlines. Here’s the most recent sampling of his attention-grabbing projects.

The Portland Loo
In December, Leonard unveiled a new public loo, open 24 hours a day, at the corner of Northwest 5th Avenue and Glisan Street. The $140,000 loo worked great—until heavy snowfall covered its solar panels, draining the battery that powered its lights. Leonard has vowed to keep going, adding more loos to the city’s streets.

McCall’s Waterfront Cafe
Calling it the Portland Rose Festival the Eiffel Tower of Portland, Leonard embarked on rehabilitating McCall’s Waterfront Cafe on the west bank of the Willamette River earlier this year for the festival's new headquarters. He wants to return the dilapidated building—designed by respected Northwest architect John Yeon in 1949—to its past glory. The cafe has been controversial in recent years as city leaders and various business owners tussled over its best use. In January, Leonard worked with the Portland Rose Festival to hammer out a $1-a-year lease. Now he’s working with Ramsay Signs to affix a giant neon rose to the top of the building.

The “Made in Oregon” Sign
Perhaps because he can’t get enough neon in his life, Leonard is also intent on keeping the “Made in Oregon” sign, owned by Ramsay Signs in Old Town. The University of Oregon, which now occupies the building that supports the sign, wants to change the landmark’s look and language to reflect the university’s presence. With Mayor Sam Adams and Commissioner Nick Fish, Leonard (a 1975 graduate of Portland State University) is bringing a motion before Council on April 1 to use the city’s power of eminent domain to buy the sign.

Randy’s Bromances

A handy primer on Randy Leonard’s bedfellows and broken hearts.

Mayor Sam Adams
In 2002, Leonard told The Oregonian he considered Adams (then Mayor Vera Katz’s chief of staff) a “soulmate.” In 2007, Leonard was protective of his “soulmate” when rumors surfaced about Adams’ relationship in 2005 with then-18-year-old Legislative intern Beau Breedlove. Leonard called the accusations “vile,” and ended his friendship with the man who raised the questions, developer and mayoral hopeful Bob Ball. Leonard’s defense came at a key moment before Adams’ successful mayoral run. Sixteen months later, Adams confessed he had had a sexual relationship with Breedlove. At first, Leonard reacted by saying Adams “never lied to me.” But their relationship cooled when Leonard learned Adams said he’d asked Breedlove to lie. Leonard and Adams patched things up to work together again on the soccer deal. Leonard was responsible for negotiating with Timbers owner Merritt Paulson. Adams was responsible for figuring out how to finance the project. “It would not have happened without Sam as mayor,” Leonard says.

Commissioner Dan Saltzman
March 11 was not the first time Saltzman tipped the balance for Leonard. In 1993, Saltzman was a Multnomah County commissioner when the board had to replace longtime state Sen. Frank Roberts (D-East Portland), who was terminally ill. Saltzman cast the deciding vote for Leonard, then president of the Portland Firefighters Association, to replace Roberts. Leonard and Saltzman’s relationship has seesawed on the Council. Leonard was ticked off by an audit Saltzman sought in 2004 of the Fire and Police Disability and Retirement Fund. In 2006, Leonard proposed a new cell-phone tax but was cool, at first, to Saltzman’s plan for spending that money on schools. And Leonard’s 2007 graffiti-curbing idea angered Saltzman, who said stores that sold spray paint hadn’t been adequately consulted. Yes, Saltzman approved the soccer plan—but not before amending it significantly to address the concerns of county leaders, including his own former chief of staff, County Commissioner Jeff Cogen.
Commissioner Nick Fish
The two Council colleagues started out as opponents. In 2002, they ran against each other in a special election to fill Charlie Hales’ seat after Hales resigned midterm. Fish, a rookie candidate, came in a surprisingly strong third in the primary behind Leonard. Fish had not known Leonard before running against him. But the two became BFFs when Leonard invited Fish for a night out at Pal’s Shanty in the Hollywood neighborhood after the 2002 race. Fish, concerned about how to pay for basic services as Portland faces budget cuts, voted against the soccer proposal. But he noted that he is “not in the habit” of discounting Leonard’s viewpoint. “After reading about Randy Leonard’s negotiating skills in the newspaper, I’m ready to send him as our special envoy to the Middle East,” Fish added. But before he could finish his compliment at the March 11 meeting, Leonard interrupted and said, “I might start a war, too.”
Consultant Greg Peden
After leaving his post as a City Hall lobbyist for the Portland Business Alliance, Peden went on to work for the Gallatin Group, a powerful consulting firm. When Timbers owner Merritt Paulson hired Gallatin to help him work with City Hall, it couldn’t have hurt Paulson’s prospects that Peden and Leonard were friends. Peden and Leonard met regularly beginning in January 2008, when Peden first went to Leonard with the idea of MLS in Portland.

Multnomah County Chairman Ted Wheeler
The March 11 meeting at City Hall featured a heated debate between Leonard and Wheeler in which the county chairman urged Leonard and the rest of the Council to slow down and consider the county’s concerns. Chief among them was the idea that forming a new urban renewal district around PGE Park would blow another big hole in the county’s leaky budget. Leonard and Wheeler proceeded to argue, in polite but forceful terms, about the short-term and long-term benefits of that financing tool. “Randy,” Wheeler later wrote in an email, “why you would think it is a good idea to try to beat the crap out of me when I gave a respectful statement is beyond me.” Leonard responded in characteristic fashion, without apologizing: “I am not sure why you thought I was beating the crap out of you.”
Commissioner Amanda Fritz
Admittedly not a “bromance,” it would be just as difficult to characterize Leonard’s relationship with the newest commissioner as a plain old-fashioned political romance. Even before Fritz joined Leonard this year on the Council, she clashed with him in her role as a neighborhood activist and planning commission member over “skinny houses” and public process. Leonard has joked about Fritz’s famous attention to detail, once calling her “Amanda ‘I’m Going to Drive Randy Leonard Crazy Every Day’ Fritz.” Fritz voted against the soccer proposal, saying voters elected her to provide basic city services first.

Correction: The original story misidentified the Portland icon Commissioner Randy Leonard likened to the Eiffel Tower. It is the Portland Rose Festival, not McCall's Waterfront Cafe, the new home of the Portland Rose Festival Foundation. WW regrets the error.


In 2004, a coalition of neighborhood activists known as the “Portland Six” ran against Leonard, saying he didn’t allow adequate public participation. Leonard won re-election with almost 53 percent of the vote. He wasn’t seriously challenged in 2008.

MLS’s initial asking price for a franchise was $40 million. MLS says it lowered the price to $35 million for Paulson because of the economic downturn. Paulson says he won’t redirect the $5 million he saved on the franchise fee to stadium construction costs.

After becoming a firefighter in 1978, Leonard won election to be president of the Portland firefighters’ union in 1986. He was a Democratic state legislator in Salem representing East Portland from 1993 until 2002, when he won the City Council race to fill the remainder of Commissioner Charlie Hales’ term.

In 2006, Leonard opposed an equally ambitious Portland project—the Portland Aerial Tram. He voted to block additional funding for the tram as its price ballooned from $14 million to $56 million, and lambasted the project for using “Enron-type” financing.

To minimize city taxpayers’ exposure on the soccer deal, Leonard says he’s worked to protect the city’s general fund by putting Paulson “on the hook” for cost overruns exceeding $2.5 million.

 
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