Skip to main content"This is an opportunity that we can't miss," says Portland Mayor Vera Katz.
"It would be a huge shot in the arm for the city and the state," says City Commissioner Randy Leonard.
"This is a once-in-a-lifetime opportunity to bring in a huge and successful business that has the opportunity to transform our economy," says Drew Mahalic, director of the Portland Oregon Sports Authority.
"This is probably the only opportunity for this generation to attract a baseball team," says Don Furman, a senior vice president at PacifiCorp.
"It would be good for the region's economy as well as the morale of our fine state," says Wes Lawrence, president of Key Bank of Oregon.
"It's something tangible in our community that would create excitement and economic development," says Harvey Platt, owner of Platt Electric.
"Portland's got a lot of wonderful qualities, but...it's just not a big-league city," says Steve Kanter, president of the Portland Baseball Group.
"Our own view as we've mentioned here before is that the city and the state ought to work hard to get a major league team here and should do so now." --Oregonian editorial, Dec. 22, 2002.
"Yes, Oregon has more pressing concerns," wrote Oregonian columnist Steve Duin on Jan. 10. "But we can't let our problems trump novel attempts to seize the moment."
Is there any other cause or event in recent Portland history that has captivated so many civic leaders? Not the tram from OHSU to Macadam. Not the completion of Airport MAX. Not the prospect of connecting the Park Blocks. Not even the University of Portland's recent victory in the NCAA women's soccer championship.
Yet the possibility of landing a major-league baseball team has mobilized an extraordinary group of Portlanders--nearly all of whom, it appears, are motivated simply by a love of baseball and this city. The effort is so pure that it almost seems sacrilegious to ask the question, "why?"
Why, when Oregon tops the national unemployment charts; why, when the state's budget is written in red ink; why, when the city's relationship with its only existing big-league sports franchise, the Trail Blazers, is on the rocks?
Why, given all these circumstances, is there such electricity around the idea of bringing baseball to Portland?
It's partly because a baseball team--the Montreal Expos--is available. It's also partly because proponents believe that professional sports bring economic development. But most of all, it is because pro sports, and baseball in particular, have a mystical appeal for some people that defies logical explanation.
"Whether you like it or not, sports is the most clear example of how cities bond," says David Kahn, who is coordinating the effort to land the Expos. "There is an emotional connection between fans and teams that is undeniable."
If an existing major-league team simply decided to move to Portland, the issue of baseball would be less interesting and far less complicated.
But that's not going to happen. Local baseball supporters have been chasing a team for more than three years with nothing to show for their efforts.
There are two squads involved. One, the Baseball Group, includes two dozen volunteers and is led by Kanter, a former public defender who teaches at Lewis & Clark Law School. The other is the Sports Authority, a business-backed group led by Mahalic, a former pro football player who exchanged his helmet for a Harvard law degree.
In December, major-league officials told Kanter and Mahalic that if Portland wanted to land the Expos, the city needed to show that it could build a stadium. "We always thought that finding an owner with deep pockets was the key to getting a team," Kanter says. "But it turns out that the stadium is the key.
The first stop on the road to building a ballpark is the Legislature. Early next month, the Oregon Stadium Campaign (a coalition of Kanter and Mahalic's groups) plans to introduce a bill to raise $150 million for a stadium.
The bill will propose a creative but largely untested method of raising public money. Here's the concept: The state would sell $150 million worth of bonds, which would be repaid over 30 years by the income taxes of both home and visiting baseball players. "People need to understand that this money won't exist unless we build a ballpark," Kanter says. "It's not as if the money is coming from schools or social services."
The idea hasn't been used much elsewhere--in part, Kanter says, because the creation of new franchises or relocation of existing ones (which creates a new stream of taxes) is rare; besides, few states have income-tax rates high enough to make it work. One exception is the Arizona Cardinals pro football team, which will soon build a new $355 stadium partially financed by players' income taxes.
Financing a stadium with players' income taxes is intriguing. It's also risky. For example, legislative revenue office projections show that it would be 12 years after the bonds were sold before the taxes on the rising payroll would be enough to cover annual interest payments on the bonds. In the meantime, tax receipts would lag total interest costs by more than $50 million.
Taxing visiting athletes--a key part of the bill--is also relatively new and controversial. In some cases, it cannot be done. Already, says Ben Gille of the Oregon Department of Revenue, athletes who reside in California and play in Oregon do not pay taxes here because of a reciprocal arrangement between the two states.
Finally, legislators could decide to cut Oregon's income-tax rate during the 30-year life of the bonds. That would result in less money to repay the debt.
Baseball proponents argue that their legislation requires the team's owner to cover the difference between taxes collected from players and the interest payments.
But some people don't find much comfort in that requirement. "I'm not satisfied that the money is collectible," says state Sen. Charlie Ringo (D-Beaverton). "Right now, the owners could file bankruptcy and walk away."
In 2001, an identical baseball bill won the support of a majority of legislators in both houses, only to be killed in the session's waning days when senators Gene Derfler (R-Salem) and Len Hannon (R-Ashland) blocked a vote on it. (Then-Gov. John Kitzhaber was prepared to sign the bill. Gov. Ted Kulongoski has said that he, too, would have signed it.)
This session, baseball boosters, with financial backing from PacifiCorp, Adidas America and Stoel Rives, among others, will spend more than $100,000 on a team of four experienced lobbyists--Dave Barrows, Alan Tressider, Kevin Campbell and Marshall Coba.
Derfler has retired, but the lobbyists will need all their skills to get Hannon, 59, on Portland's team. A moderate Republican, the Senate's longest-serving member will wield considerable power in a chamber split 15-15.
Asked if there is any way baseball supporters can change his mind, the Ashland senator barks, "Hell, no."
"We're talking about making $500 million in cuts on Jan. 29 if Measure 28 doesn't pass," Hannon adds. "We can't educate our kids; we'll be kicking people off the Oregon Health Plan and turning criminals loose in the streets. This baseball idea is an insult to taxpayers."
Hannon isn't swayed by the argument that the bonds would be repaid with revenues that wouldn't exist without baseball. "It's a pig in a poke," he says.
He also objects to the precedent. If every new business in Oregon could divert its employees' income taxes for the company's own benefit, he says, there would eventually be almost no money flowing into the general fund.
Even if baseball supporters are successful in raising $150 million in Salem, they will be less than halfway to the $336 million cost of the stadium they hope to build.
David Kahn, a former Oregonian sportswriter and general manager of the NBA's Indiana Pacers, is currently seeking a big chunk of the balance--about $125 million--at City Hall.
Of all the local baseball boosters, Kahn has the most experience in developing a new sports facility. While serving as the Pacers GM, he oversaw the financing and construction of the team's $183 million arena, Conseco Fieldhouse, completed in 1999. "It would be presumptuous to say that we know how we're going to get this done," Kahn says. "But we do know that there cannot be any property- or income-tax increases."
It helps Kahn's chances that Mayor Vera Katz is a longtime major-league baseball fan. "I grew up as a latch-key kid," Katz recalls. "I'd get home from school, start my homework and turn on the radio to listen to the Brooklyn Dodgers. I never missed a game, and I knew all the players' batting averages."
Although she characterizes herself as "strong supporter" of the effort to lure a team, Katz says it's premature to discuss specific financing options. The most likely potential sources of local money, she acknowledges, are tax-increment financing (borrowing against a growth in future property-tax revenues), user fees on baseball tickets and tapping other public-sector partners, such as TriMet, which might gain ridership from a new stadium.
Katz will also seek help outside Portland. "I would hope that this would be a regional effort, but we haven't had those conversations yet," she says, quickly adding, "We will not do this project if it takes money away from basic services. If we sell bonds, we'll pay them back from the proceeds of the business."
Kahn will be working with Katz to develop financing options and a communications strategy. Over the past year, he has built alliances at City Hall as part of a group advising the city on ways to fix its ill-fated partnership with Portland Family Entertainment, which owns the Portland Beavers and operates city-owned PGE Park.
If Kahn can help the mayor find a way to finance Portland's contribution to a new ballpark, Katz will still need at least two votes from her council-mates to move forward.
Newly installed commissioner Randy Leonard will probably be her strongest ally. As a state representative in 2001, Leonard was a leading advocate for the baseball bill.
His willingness to finance a stadium might seem inconsistent, given that in his first month on the City Council, he raised a ruckus about tax breaks given to a high-end Pearl District apartment development.
But Leonard argues that public funding for baseball is different from subsidizing the Pearl because baseball would create far more jobs and development that otherwise would not occur.
Leonard acknowledges that critics will ask why baseball should get money when other needs go unmet. "That is the question that is causing politicians to shiver and run from this issue," he says. "But we aren't talking about the same dollars. Baseball dollars couldn't be used for any other purpose."
Leonard will need to spend time convincing his colleagues of that. Two of them, Commissioners Erik Sten and Jim Francesconi, say they'd welcome baseball but are skeptical that acceptable funding exists. "Baseball is not my top priority, but I'm willing to listen," says Francesconi, echoing Sten's sentiments.
Commissioner Dan Saltzman is even less enthusiastic. "I'm not in favor of raiding our urban renewal districts to make this happen," he says.
If baseball supporters do hit a home run in Salem and at City Hall, they may be able to avoid having a public debate on the central question underlying their effort: Does baseball make sense for Portland?
Put another way, is the expenditure of nearly $275 million of public funds for a baseball stadium a sound investment?
There's certainly no consensus about the economic benefits of professional sports. Although many analysts say pro sports are an financial strikeout, supporters swear that teams create jobs, spur tourism and raise property values around stadiums.
Jay Waldron, a lawyer who is the president of the Port of Portland Commission and a member of Kanter's group, says that landing a team would be akin to convincing a large, successful company to relocate here.
"How would you like to have 30 multimillionaires move to town?" Waldron asks. "How about 200 additional jobs that pay between $40,000 and $800,000 and a couple of thousand other seasonal jobs?"
A study done for the baseball group projects that a big-league team could pump $1.7 billion to $3 billion into the state's economy over the next 30 years.
Economists who have studied teams in other cities scoff at such figures. "Portland should not pursue major-league baseball if they think it is going to produce economic development," says Andrew Zimbalist, whose 1997 book Sports, Jobs and Taxes: The Economic Impact of Sports Teams and Stadiums presents dismal case studies from around the country.
Former City Commissioner Charlie Hales agrees with Zimbalist. "I'm spending a lot of time these days in cities that have tried to resuscitate their downtowns with sports," Hales says. "The results have been more like putting makeup on a corpse."
Waldron says it will be different here. "What if 82 nights a year you'd have 25,000 people downtown?" he counters. "Most of the time the studies that say there is no benefit assume that there is something already going on, and that's not the case in Portland."
But not even the most wild-eyed baseball fan would claim that any company has ever been offered $300 million to move here.
Last year, for example, when Vestas, a Danish windmill manufacturer, considered building a $100 million factory that would employ 1,000 people in Portland, the city offered what Sten and others thought was an aggressive deal. But the fee and tax breaks the city put on the table were worth no more than $10 million.
In 1999, there was an uproar when Intel--which had moved into Oregon 25 years earlier--received a $200 million property-tax break. Yet Intel was a proven success with a giant commitment to this state. At its peak, the company employed 15,000 people here, and it agreed to invest another $12.5 billion of its own money in Oregon.
Kahn argues that professional sports is fundamentally different from other industries. "The business model in pro sports is that teams fail without a subsidy," he says.
That belief is not always correct. Over the past two decades, the San Francisco Giants asked voters three times to pay for a new baseball stadium. Each time, the voters said "no." So in 1997, Giants owner Peter McGowan broke the mold and built Pacific Bell Park with almost no public money--95 percent of the financing came from private sources.
McGowan's effort reportedly upset his fellow owners. It's pretty clear why--his example threatens the golden subsidy goose that feeds professional sports.
The effort to land a baseball team in Oregon is definitely different from other economic-development efforts in one way: Supporters are trying to line up $275 million in public money to build a stadium before knowing who the team's owner will be.
Perhaps the owner will be somebody with local ties--like, say, Blazers owner Paul Allen. But it could just easily end up being somebody with no connection to Portland, because it is up to Major League Baseball, the game's governing body, to find and approve an owner.
Maybe baseball officials will pick a benevolent benefactor, such as McGowan, the Giants owner, or maybe they'll pick somebody more like former Cincinnati Reds owner Marge Schott, who was suspended from baseball in 1996 for expressing racist views. Nobody knows.
But even Kanter acknowledges that if Nike boss Phil Knight or any other tycoon were interested in bringing baseball to Portland, he'd be stupid to surface this early in the game. "If a rich owner steps up now, the public dollars will go away," Kanter says.
Portland vs. Washington
The Montreal Expos are for sale because they draw smaller crowds than turn up for the average wreck on the Banfield and because their television and radio audience is equally anemic.
Major League Baseball bought the failing franchise for $120 million last year, establishing what was always planned to be temporary stewardship.
When baseball officials invited Portland to compete for the Expos last December, they issued the same invitation to only one other city--Washington, D.C.
Portland's chief advantage, boosters say, is that PGE Park could provide an immediate interim home for the Expos until a new stadium could be built.
But baseball officials, including Commissioner Bud Selig, have previously expressed interest in having a franchise in Washington, as have several congressmen and senators. The nation's capital is also a far larger, far richer market than Portland.
Moreover, Washington Mayor Anthony Williams doesn't need to cajole legislators, and he has already pledged to provide an owner with $300 million in public funds.
Despite all of Washington's assets, however, some people think the Rose City remains a legitimate contender. "Portland definitely has a chance," says Doug Pappas, a New York lawyer who studies the business of baseball for the Society for American Baseball Research.
Part of Portland's appeal, Pappas says, is that a Washington franchise could spark a legal challenge from one of baseball's most aggressive owners, Peter Angelos of the Baltimore Orioles. Angelos has said that he thinks a D.C. team would violate his geographical territory.
Washington's effort is also less unified than Portland's. There are two competing groups there, one in Virginia suburbs, led by whites, and one downtown, led by African Americans. Both include boosters so influential, Pappas says, that the easiest answer for baseball politically may be to say "no" to both.
It may also serve baseball's long-term interests to keep the nation's capital on deck. "Washington should have had a team a long time ago," says Pappas. "But Major League Baseball wants to keep one attractive site out there for teams to threaten to move to."
Even if Portland comes in second in the Expos sweepstakes, however, local baseball boosters say there is a good chance that another team--probably Tampa Bay--will relocate soon. "What really counts is that we make a good showing," says booster David Kahn. --NJ
Trading PFE for the Majors
Helping bring major-league baseball to Portland could provide an indirect benefit--it could end the city's messy relationship with the financially troubled Portland Family Entertainment.
Should the Montreal Expos relocate here, baseball rules obligate the local minor-league team (PFE's Portland Beavers) to leave town. In addition to covering all of the Beavers' moving expense, the Expos would have to pay PFE compensation.
Such a payoff could reduce PFE's indebtedness--which includes about $864,000 owed to the city--and would presumably provide a palatable resolution to PFE's 20-year contract to operate city-owned PGE Park.
Mayor Vera Katz says she won't repeat the mistake she made when she accepted PFE's financial projections. "I learned that we have to be more conservative than any model available to us," she says.
Still, some people wonder whether the city is setting itself up for a major-league fleecing in its pursuit of the Expos. "The thing that has everybody scratching heads when you mention major-league baseball is the unmitigated disaster at PGE Park," says Steve Wynne, a Portland lawyer and the former CEO of Adidas America. "That's issue number one." --NJ
Kanter's group has commissioned a design for a $336 million ballpark that would hold 42,000 fans. The design does not include a roof, which would add another $60 million to $100 million.
Architects have identified a handful of potential sites for a baseball stadium (see www.portlandbaseballgroup.org ). Mayor Vera Katz favors the school district headquarters site, while Randy Leonard likes the intersection of I-205 and Southeast Foster Road.
National Climatic Data Center figures show that it rains less in Portland during baseball season than it does in 16 other cities with major- league teams. From April through October, it rains twice as much in New York and Chicago as it does in Portland.
Boosters say Portland is the largest metropolitan area in the country without major- league baseball and the largest with only one big-league sports franchise.
A review of 11 of the 12 major-league stadiums (see www.ballparks.com ) built since 1990 shows that the average deal includes about 75 percent public money and 25 percent owner financing. (Pac Bell Park is the 12th deal.)
None of the Oregonians considered wealthy enough to buy a team (Nike's Phil Knight, Klamath Falls window and resort tycoon Dick Wendt, Columbia Sportswear's Tim Boyle, Robert Pamplin Jr. or tire king Les Schwab) has expressed interest.
WWeek 2015