Mayor Sam Adams and City Commissioner Randy Leonard this morning rolled out their draft agreement
(PDF) with Portland Beavers/Timbers owner Merritt Paulson to renovate PGE Park into a soccer-specific facility and build a new ballpark for the Beavers where Memorial Coliseum is now located. Total cost of the deal: $88.785 million.
This afternoon, proponents of the deal are lobbying skeptics, including City Commissioners Nick Fish, Amanda Fritz and Dan Saltzman. Those three members of the five-person council fear committing city resources to a wealthy sports team owner when they're also cutting the city budget.
And then there are Multnomah County officials and schools advocates, who would lose out
because of the proposed $33.5 million in urban renewal bonds that are the biggest single source of the stadium deal.
The draft agreement is pretty interesting.
Here are some questions that will no doubt be addressed at the scheduled council vote on the proposal tomorrow or soon afterward:
1. Is the financing solid?
The city proposes to sell $31 million in bonds that would be paid back from what's called the Spectator Fund. But according to the city's final report
(PDF) on MLS, issued this week, the bonding capacity of the Spectator Fund is $25 million—maybe. But there are a lot of unknowns, including whether Paulson's financial projections are accurate and whether investors will believe the story he, Adams and Leonard are telling. This sentence from the city's final report on MLS doesn't inspire confidence: "There is a possibility that the Spectator Fund bonds may not be saleable in the public bond market."
2. How real is the $88.785 million cost
? Most major projects involving old buildings in recent city history—including the renovations of City Hall, the Multnomah County Central Library, The National Guard Armory
—prove more expensive than initially budgeted. The deal presented today includes two old buildings—PGE Park and Memorial Coliseum—but none of the specifics, such as design drawings—that allow for accurate cost estimates. Yet the plan commits the city to absorb the first $2.5 million of cost over-runs and Paulson to eat the rest. Really?
3. Are they gilding the lily
? Paulson promises to contribute $100,000 to "local youth-focused charitable organizations." He told WW
he's already doing that, so the city gets nothing new on that front.
4. Will there be grass?
There's no mention of an important operation question at PGE Park. MLS wants its teams to play on grass; yet, if Paulson complies, it's hard to see how he can continue to allow high schools, Portland State University and club groups use the field for soccer and football.
5. Are MLS franchise prices impervious to reality?
Paulson is now putting $12.5 million into the kitty for constuction. That's a big improvement over what he was offering previously—zero. At the same time, the draft agreement still claims he's going to pay $40 million for an MLS soccer franchise. That's the same price he was talking about paying six months ago before stocks and other investment grade assets lost 50 percent of their value, and in some cases more. So could it be that Paulson's contribution to the kitty is really just money he anticipates saving on the purchase price? After all, far more successful and established leagues such as the National Basketball Association have said their franchises are in serious financial trouble: why should Major League Soccer be immune from flagging corporate sponsorship, cash-strapped fans and other economic challenges? One of his advisers, lobbyist Greg Peden told WW
yesterday that $40 million is still the price. "There is a chance that the valuation of the team may come down but it hasn't yet," Peden says.
6. What do Paul Allen and the Blazers think
? Last week, Blazers brass briefed reporters on plans to develop an entertainment district in the Rose Quarter with the help of The Cordish Company
, a Baltimore group that has done ballpark and arena-related projects in Kansas City, Baltimore and Louisville. That presentation was very short on specifics—no price-tag, no time-table and no drawings. But the timing, coming just a few days before Paulson's deal was scheduled to be unveiled was probably no accident. Blazers President Larry Miller says his organization is open to the possibility of seeing Memorial Coliseum, which the city owns —and the Blazers manage— replaced by a AAA baseball stadium. Millier also denied speculation that the Blazers oppose MLS or any other potential competitor for sponsorship dollars and fans. Miller did say the Blazers hope for some public sector financing for their planned entertainment district, which means at the very least, Allen's organization may be looking to tap the same Convention Center urban renewal district kitty from which Paulson is getting $18.5 million.
's print edition tomorrow for more on the MLS deal. And check Wwire during tomorrow's council session for updates.