Oregon Public Broadcasting

The city of Portland and sports owner Merritt Paulson reviewed a new, cheaper financing deal to renovate the city’s downtown ballpark for a Major League Soccer team.

The new arrangement costs $7 million less – and relies on less controversial funding sources, as Rob Manning reports.

The city council was supposed to be approving general terms for work at PGE Park – a new financing deal was not on the agenda.  But a new deal is what they heard about, from city finance chief, Ken Rust.

Ken Rust: “One of the benefits to the city is that we have a significant portion of this is guaranteed even in upfront payment, or through a guarantee with the Paulson family that’s to be negotiated. We also have a sharing of the upside.”

In other words, the city has a guarantee for the first seven years of rent from Paulson, regardless of how well the MLS team does. And Paulson is paying the rent up front, for close to two decades after that.

His payments total $19 million of the $31 million cost. Most of the rest would come from a city fund that collects money from events and hotel taxes.

The city also gets a share of profits, and the proposal avoids the controversy around urban renewal money for the park.

City commissioners seemed supportive, but had questions. Amanda Fritz asked about a no-bid contract with Paulson’s company.

Amanda Fritz: “Given that we’ve consistently gotten bids come in at one-third of the initial amount, why aren’t we putting the construction out to competitive bid?”

Commissioner Randy Leonard and Mayor Adams responded to her.

Randy Leonard: “That’s one of the reasons we’ve dropped the project cost of the project from $38 million to $31 million because I believe that we’re going to see actual costs come inhought.”

Adams: “So we’re banking on those.” 

After the meeting, Paulson said that he was comfortable with the deal.

Merritt Paulson: “If I thought it was going to be an overly material impact, I wouldn’t have gone forward, or we would have tried to delay when the franchise came to Portland.”

Paulson says urban renewal money could be back on the table for a second phase of the plan.

But before that, Paulson and the Portland commissioners face two questions: whether to sign off on the $31 million first phase - and where the Portland Beavers' baseball team will play, once the ballpark has been converted for soccer.