Oregon Public Broadcasting

After six months of negotiations, a final deal to renovate Portland’s PGE Park for a Major League Soccer franchise is now ready for city approval.

The $31 million worth of renovations are deemed necessary to please soccer officials who awarded a franchise to the city last year. 

Soccer owner, Merritt Paulson has already committed $40 million for the team, and he’ll be responsible for the lion’s share of the upgrades at PGE Park.

I’m joined this afternoon by OPB’s Rob Manning who’s been following this story.

Good afternoon, Rob.

Hi Beth.

So, what is this deal?It’s a $31 million agreement where close to two-thirds of the money comes from Merritt Paulson, and a little more than one-third comes from the city. The city side is a little less than $12 million.

Paulson is putting up a little over $19 million, in upfront cash and guaranteed payments.

I spoke to Mayor Sam Adams – who’s in Washington, D.C. at the National Conference of Mayors. He says a deal with this much private investment is a big deal, in the current economic climate.

Sam Adams: “I’m here in D.C. and hearing the impact of the recession on other cities – and like Portland, it’s pretty devastating. The fact that we can, with this deal, that largely pays for itself, leverage the tens of millions of dollars in private funding to make this happen, it’s pretty remarkable.”It was last March that Paulson and the city first learned that a Major League Soccer franchise had been awarded to Portland. And since then, the city has struggled to find a home for the other tenant at PGE Park – the baseball team, the Beavers. Right – Paulson tried three different locations – the Rose Quarter, the Lents neighborhood of Portland, and Beaverton – and none of them worked out. This proposed deal on PGE Park doesn’t address the Beavers. OK. The city also ran into opposition in terms of how renovations at PGE Park would be paid for – particularly around the use of urban renewal money.

Yes. There was a tentative deal earlier, back when a Lents baseball stadium was on the table that would have used a lot of urban renewal money for a new park. And there was the potential for urban renewal money for soccer renovations in earlier discussions.

Randy Leonard: “Well, what made it take the time that it did was the the crux of most Portlanders’ anxiety, which was ‘how can you spend money for soccer at a time when we’re cutting other services?.’ And in fact, we’re not going to spend any taxpayer money, it will all be from Spectator Fund ticket tax.” The Spectator Fund comes from ticket and parking revenue associated with entertainment and sports venues, like the Rose Garden and Memorial Coliseum. So that’s where the nearly $12 million is expected to come from.

So, is this deal going to go through?

Adams and Leonard will obviously vote for it. The question is how many more votes they can get.

Amanda Fritz has been reluctant to support the stadium efforts. I don’t know about Nick Fish since he declined to comment today. The most likely third vote at this point might be Dan Saltzman. I spoke with him this afternoon.

Dan Saltzman: “This to me looks like an acceptable deal. I’ll certainly always listen to the public testimony we’ll hear next week. This is certainly within my framework of something that does not require any city general fund resources, doesn’t require the creation of a new urban renewal area.”

Adams and Leonard emphasized that the deal has “personal guarantees” from the Paulson family including Merritt’s father, Henry Paulson, who was Secretary of the Treasury under President Bush, and head of Goldman Sachs.

But that guarantee tops out at $20 million dollars. That means if the project goes far over budget, and soccer struggles for whatever reason, Merritt Paulson might still be on the hook, but the city wouldn’t have the Paulson family guarantee to rely on.

Adams and Leonard, though, insist that these guarantees are as strong as you’ll find anywhere for sporting arenas.

Last, Rob – is this going to mean big changes at PGE Park?

Yes. There will be bleachers along one side of the park where there aren’t any right now. There will be a medical facility for the athletes, which will be open to the public during the day. The concourses and restrooms will be bigger.

The park itself probably won’t be named PGE Park before long either. Whose name is on it will be up to Merritt Paulson’s company, but Adams and Leonard suggest that decision may be subject to some degree of further negotiation.

And we’ll hear more about this when city council officially takes this up, right?

Correct. 

Thanks, Rob.