Portland Timbers get their stadium reno deal; Beavers future uncertain

It took a while, but yesterday the Portland city council approved a $31 million plan to renovate PGE Park to be soccer-only, clearing the way for the Portland Timbers to start play there as an MLS club in 2011. Most of the money will be provided by taxpayers, though partly via a convoluted “prepaid rent” scheme that makes it hard to understand exactly who’s paying for what.

Meanwhile, the Portland Beavers minor-league baseball team — owned, like the Timbers, by Merritt Paulson, son of former Bush treasury secretary Henry — will be without a home after the 2010 season. Paulson had previously threatened that this would be a deal-breaker for any renovation plan, but who really takes sports team owner threats seriously, anyway?

Portland to delay stadium financing until after stadium is complete?

The Portland city council is set to vote tomorrow on an agreement with Timbers owner Merritt Paulson to convert PGE Park to soccer-only, and inveterate blogger Bojack notes something odd about the deal: The city would apparently hold off on issuing bonds to pay for the renovation until the construction is already complete, instead using a short-term line of credit to pay initial costs, then later deciding whether to pay them off with bonds or cash. Bojack says that as a result, “Portland taxpayers won’t get to see (or pass on) the terms of the mortgage until after the stadium project is finished” — and, more important, wouldn’t have the opportunity to file a petition challenge to the bonds, because the project would already be complete by then. Tomorrow should be an interesting city council meeting.

Timbers release stadium design, construction schedule

Merritt “My Dad Gave Away Your Dad’s Tax Money” Paulson still doesn’t have a new home for his Portland Beavers minor-league baseball team, but that isn’t stopping him from moving ahead with plans to renovate PGE Park as soccer-only. Paulson’s Timbers soccer franchise released new renderings this week of how the renovated stadium will look, after a $31 million makeover being paid for by, well, The Oregonian didn’t mention it this time, but psst, mostly the taxpayers.

The most interesting bit here may be that they plan to begin construction in January, pause for the baseball season, then finish up next winter. Which certainly leads one to believe that at least some of the renovations could take place while still accommodating baseball. Also, apparently Paulson was definitely lying when he told the Beaverton city council that “if I don’t get a baseball deal done, I’m not going to finalize the deal with Portland” — unless he really thinks he’s going to finalize a deal with the other Vancouver before the construction crews are set to arrive next month.

Paulson puts kibosh on Beaverton Beavers

This just in: Portland Beavers owner Merritt “Son of TARPman” Paulson has pulled out of his proposed deal with Beaverton for a minor-league baseball stadium. His explanation: There isn’t enough time to get a stadium built there by 2011.

As explanations go, this is pretty unexplanatory: That would have been a tight timetable to get a Beaverton stadium done in any case, and it’s not like any other cities are further ahead with their stadium plans. More likely: All the Beaverton city council members hating on the plan, combined with behind-the-scenes talks with other cities, caused Paulson to figure he’d be better off putting his money on another horse, whatever that may be.

Portland City Commissioner Randy Leonard told the Portland Business Journal that the news doesn’t threaten Portland’s agreement to renovate PGE Park to be soccer-only for Paulson’s Timbers. Which is exactly the opposite of what Paulson said two weeks ago, but then this is a guy whose lines in the sand change every other week.

Paulson threatens Timbers deal if Beavers don’t get new home

The Portland Beavers and the city of Beaverton announced a tentative stadium agreement this week, and Beavers owner decided to mark the occasion the old-fashioned way — with a threat. “If I don’t get a baseball deal done, I’m not going to finalize the deal with Portland,” Paulson told the Beaverton city council Tuesday night. “So MLS will not come to Portland unless I do a deal for a new baseball park.” Which is a change from what he said four months ago, but new times demand new threats.

As for the mystery of how a Beaverton ballpark, that seems to have been resolved. According to The Oregonian:

In Beaverton, Paulson would pay $9 million upfront and make annual rent and ticket-tax payments for 25 years, beginning at more than $870,000. The city would sell revenue bonds to cover $50 million, to be repaid through higher property and utility taxes.

Taxpayers would be on the hook for about 60 percent of total project costs.

That’s a bit oblique, but what it seems to be saying is that: For a $59 million stadium, Paulson would kick in $9 million in cash and pay off about $15 million in bonds; the other $35 million would come out of taxpayers’ pockets.

A citizens’ group calling itself Let Our Voters Vote has launched a petition drive to force a public referendum on the stadium project. Mayor Denny Doyle has already countered by arguing that the monthly cost of a stadium would be less than half the price of a movie ticket; it’s got to be only a matter of time before somebody translates that into pennies.

Keeping naming rights could pay Portland’s share of Timbers stadium cost

Writing in The Nation, Dave Zirin and Jules Boykoff call attention to yet another problem with the problematic Portland Timbers soccer-only renovation plan for PGE Park:

PGE secured a decade’s worth of naming rights at a bargain-basement price of $8.5 million, but the deal expires after 2010.

If the naming-rights agreements signed recently by other MLS teams are any indication, Portland could get a lot more bang for its corporate buck.

In Toronto, the Bank of Montreal paid $24 million for a ten-year naming-rights deal. The Los Angeles Galaxy scored $70 million over ten years from Home Depot for soccer-stadium naming rights. Real Salt Lake signed a ten-year deal with Rio Tinto for approximately $20 million, while Dick’s Sporting Goods agreed to pay the Colorado Rapids $30 million over fifteen years for stadium naming rights.

If PGE were asked to fork over $19.7 million for the next decade of sponsorship–a figure in line with other MLS agreements–there would be no need to finagle the city for money.

Of course, that would mean Timbers owner Merritt Paulson giving up the naming-rights money — which the current stadium agreement would hand over to him, even though the city currently gets the money, and the stadium would continued to be owned by the city. See what I was saying about hidden costs?

Portland soccer deal: Team gets profits, public gets the risk

The Portland Timbers stadium plan took another step forward last week, as the Portland city council voted 4-1 to approve the preliminary finance plan for a $31 million rebuild of PGE Park as a soccer-only facility. (This would force the minor-league Portland Beavers baseball team — also owned by Timbers owner Merritt Paulson, son of Henry — to relocate elsewhere.)

The Oregonian notes, as I alluded to earlier, that much of the $31 million consists of hidden subsidies that could come back to bite Portland in the general fund. For example, the $11.1 million in “prepaid rent,” notes the paper, is actually public money, and expensive money at that:

The prepaid rent, which the city refers to as capitalized rent, is akin to Paulson providing the city with a construction loan.

In exchange for $11.1 million today, Paulson will avoid rent and ticket tax payments totaling at least $38.4 million over 18 years. That translates to some $27 million in interest payments by the city over the life of the loan — the equivalent of paying an interest rate of 8 percent.

And while another $11.2 million would come from future ticket taxes, it’s actually mostly taxes on basketball, not soccer: “The Blazers are effectively locked into their Rose Garden lease until 2025. If they left at that point, the Spectator Fund would become insolvent, unable to repay the final 10 years of soccer debt.” And, of course, even without that dire scenario, it would be $11.2 million that the Spectator Fund wouldn’t be able to use for other public projects.

For further analysis of the Timbers plan, see Bojack‘s report, which calls it “the most preposterous deal you’ve ever seen” and concludes: “Bottom line on the remodel: The Paulsons and their friends get all the upside, and Blazer fans and the taxpayers take a major share of the downside risk, which is substantial.”

Paulson: My stadium is “crap”

Running down your own stadium in the cause of getting a new one has a long, inglorious history, but Portland Beavers and Timbers owner Merritt Paulson still deserves some sort of award for telling Willamette Week that PGE Park is a “crap stadium,” just in time for his team to host the AAA All-Star Game there last night. That’s the All-Star Game, WWeek notes, that Paulson announced he’d landed two years ago with the statement that “we are thrilled at the opportunity to showcase Portland and our wonderful ballpark.” But that’s when he was more interested in selling tickets than stadium financing packages.

Paulson, Portland push new Timbers plan

The $15 million hole in Merritt Paulson’s $31 million soccer stadium plan has been filled, the Portland Timbers owner and city officials announced yesterday. Under the new plan, Paulson would pay $8 million in cash, and prepay $11.1 million in rent and ticket taxes; the city, meanwhile, would kick in $11.2 million in future tax revenue, plus a $700,000 development tax break.

So who would actually end up paying the $31 mil to convert PGE Park to soccer-only? It’s hard to say — if the previous plan was confusing, the new one is if anything more so: The $11.1 million in prepayments by Paulson, in particular, looks more like a loan than a private expense. The key point here, though, seems to be that this plan avoids using urban renewal money, which was a no-go with some city commissioners; since Paulson has already ditched the more-controversial minor-league baseball stadium plan for the time being, he seems to have given himself a leg up on getting the soccer deal done. We’ll know more in two weeks, when the council has to vote on the new financing package.

Paulson: Forget baseball, let’s talk soccer

Those protestors in Lents have to be thinking, “That was easy”: Portland Beavers owner Merritt Paulson withdrew his plan for a minor-league baseball stadium today, saying he wanted to instead focus on finalizing plans for a soccer stadium for his expansion Timbers team. As for the Beavers, he said he’s committed to keeping them “in Portland or the Portland area.”

It may or may not have been intentional, but Paulson has now pulled off a series of switches even slicker than his dad managed last fall. Let’s recap:

  • Two years after buying the Beavers and minor-league Timbers franchises, Paulson wangles an invitation to move up to Major League Soccer in 2011, provided he has a soccer-only stadium.
  • Paulson presents Portland with a no-lose proposition: He’ll build a new stadium for the Beavers, and renovate their current home park to be soccer-only. And all he’ll need is $30 million or so in tax money.
  • Everyone freaks out about where to put the baseball stadium. Paulson freaks out about the freaking out.
  • Mayor Sam Adams says, “We don’t need to worry about baseball to get soccer done.”
  • Paulson: “What is this ‘baseball’ of which you speak?”

While nobody knows what the soccer stadium deal will look like now — it was only presented previously as a package deal — Paulson is potentially sitting pretty, as the city has already identified a whole pile of different public revenue streams, any of which could cover the soccer costs if the baseball stadium is scrapped. Meanwhile, Paulson now gets to play “Who Wants To Build Me a Baseball Stadium?” with the Portland suburbs — both Hillsboro and Vancouver, Washington have been mentioned as possibilities — and at worst, he’s traded in two minor-league teams for one big-league one and a AAA baseball franchise that he can move or sell or whatever, which is a good swap however you want to count it. “Hey, how about you build me a new soccer stadium and make my baseball team a free agent?” isn’t a deal he likely could have gotten if he’d proposed it back in March, but what’s important is how you get there, or something.