IMAGE: Lukas Ketner

Last November, four Portland Providence Health Services officials visited the Dallas area and an unusual medical clinic at the Major League Soccer stadium there.

Pizza Hut Park, the 20,500-seat stadium, has been home since 2005 to FC Dallas. And the clinic Providence officials visited inside the soccer-specific stadium was the Baylor Outpatient Therapy Sports Medicine Clinic.

Built in 2006, Baylor is a 6,000-square-foot rehabilitation center where middle-aged Texans suffering from carpal tunnel syndrome, tennis elbow and other sports-related ailments can seek treatment.

Inside City Hall, Merritt Paulson—owner of the minor-league Timbers soccer team—has not been shy about the fact he wants to replicate Baylor’s treatment center at PGE Park when his expansion team begins Major League Soccer play in 2011.

He’s not necessarily concerned about Portlanders’ knees and joints. Baylor’s rehab center pays rent to Pizza Hut Park in a sponsorship deal, the details of which haven’t been made public. Presumably, a similar venture here would support the Timbers’ refurbished home.

But sources tell WW that Paulson’s desire to put a medical clinic in a publicly owned facility is one of the reasons city officials have held up signing a final financial agreement with Paulson. That deal—to renovate PGE Park for Major League Soccer—was supposed to have been signed by Oct. 1.

Instead, due in part to questions about the clinic arrangement from city chief administrative officer Ken Rust, the deadline has been extended until December or January. City officials and Paulson haven’t agreed on how to share rent proceeds from a proposed Providence clinic. Meantime, construction is to begin on the $31 million project three months from now so Paulson’s MLS franchise has a home by 2011.

Disagreement over the financials of the clinic is not the only holdup.

If Providence were to build a sports rehab center at PGE Park, Portland would have to change the zoning code governing the stadium. PGE Park is currently considered “open space.” And new zoning usually requires approval by the Planning Commission.

Jerald Powell of the Goose Hollow Neighborhood Association says neighbors support a stadium clinic but want ample public input to avoid unintended consequences.

City officials, led by Mayor Sam Adams, are also negotiating with Paulson’s Peregrine LLC over how much control the city could have over future naming rights at PGE Park, which expire next year. (PGE spent $8.5 million to have its name on the stadium for 10 years.)

None of this is being aired in public because the financial negotiations are considered confidential under state law, even when they concern a public facility.

“Both the City and Peregrine, LLC, have not yet agreed on a number of business terms,” Adams’ office wrote in an email. “If the parties are able to reach agreement in the next couple of weeks, then they will likely need a couple of months to complete the necessary legal documents to memorialize the deal. Once the documents have been completed, they will be presented to City Council for consideration.”

At the city’s request, Paulson emailed Don Garber, MLS commissioner, at the end of September to inform him of the deadline extension and to seek written confirmation from Garber that the delay wouldn’t jeopardize the league granting Portland an MLS franchise in 2011.

MLS president Mark Abbott said Tuesday he has no concerns about the financial discussions between Paulson and City Hall, saying “everything remains on track with respect to the construction timeline.”

If PGE Park is remodeled to meet MLS demands, Paulson’s Portland Beavers minor league baseball team will be homeless starting in 2011. But Paulson said he’s not dragging out the PGE Park negotiations because the Beavers’ future home remained uncertain.And he also said he’s not having trouble finding buyers for $11.2 million in stadium project bonds—his responsibility according to his pre-development agreement with the city.

Asked then if the deal’s delay stems from disagreement with the city over the health clinic, Paulson replied: “Standard public process.”