The bouncy castle, photo booth and puppy petting area at Jefferson Smith's mayoral campaign party added a veneer of happiness to what most supporters knew going in: Tonight wouldn't involve a victory speech.

The Melody Ballroom in inner Southeast never reached capacity—the party capped out at about 200 people. Smith, as well as most of his supporters, acknowledged that polls and other signals leading up to the 8 pm election results wouldn't favor him. They didn't. Results were showing Hales winning 62 percent to 30 percent.

But the ones there were ardent, wearing buttons and T-shirts. "It's gonna be tough," predicted Charlie Burr, chairman of the Oregon League of Conservation Voters PAC, which endorsed Smith.

Smith made a brief appearance, only to disappear before the early election returns from Multnomah County. No one announced them—supporters instead remained glued to national races, and cheered when President Obama won re-election.

Smith emerged from a back room at about 8:20 pm, taking the stage to Journey's "Don't Stop Believin'."

"I'm Jefferson Smith and, until 20 minutes ago, I was running for mayor," he said, giving a new riff on his usual campaign line, before turning serious. "We didn't win, and I didn't do everything I should have done."

Smith said he had spoken with Mayor-elect Charlie Hales, and told Hales he would do whatever he could to help the new mayor. He thanked staffers, volunteers, voters, the press and his family. Not long after he finished, people headed for the door—or the bar.

After the speech, Jefferson and Katy Smith sat at a round table, and she rested her hand on his knee. Besides not winning, Smith says that his personal issues overshadowed the ones the city is facing.

"I needed to do better to work on being clear about who I am," Smith said.

Both he and campaign manager Henry Kraemer said they needed a few days to reflect on what they would have done differently in the race.

But one of the turning points, Katy Smith said, was "when the focus came off of what Jeff was talking about for the city, and turned very personal. Not just for him, but Charlie. That was one of the most unfortunate things that could happen in this town."

Smith said he has no plans to leave Portland.

"The world's a big place," Smith said. "I want to be somewhere where I'm useful."