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This page contains a single entry from the blog posted on November 27, 2005 3:05 AM. The previous post in this blog was Victor and vanquished. The next post in this blog is Jungle juice in the 'Couv. Many more can be found on the main index page or by looking through the archives.

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Sunday, November 27, 2005

Out on a limb

Over on Portland Commissioner Sam "the Tram" Adams's blog, he actually has a thread going on what would happen if the city pulled out of the aerial tram project [rim shot] between OHSU and the SoWhat district.

A pretty gutsy move on his part. Recent news accounts of the ever-expanding budget for this monstrosity ($45 million and counting, and that's for construction alone -- who knows how much it will cost to run the thing) have many of the city's taxpayers asking the same question. Recent revelations that there isn't much biotechnology being built in SoWhat despite the sales job, and that the first "OHSU" building down there won't be owned by the university, but rather by a private, "nonprofit" association of rich doctors, aren't helping the p.r. situation much, either.

So (1) how did the city get into this mess, and (2) what would happen now if it pulled out?

Adams's responses can be boiled down to this:

(1) Don't blame me. Though I was Mayor Katz's economic development expert at the time, I had nothing to do with it. It's all Jim Fracesconi's fault -- he was the transportation commissioner.

(2) Walking away from the project would force the city to pay extensive damages and wreck the city's credit rating.

Have some grains of salt ready and read the whole thing here.

UPDATE, 8:35 p.m.: The gods must be following this thread. A sign from heaven, Portland!

And while you're doing your tram reading, don't miss this.

Comments (15)

Wow, I'm stunned something as realistic as that article was printed. Hopefully this is a sign that good things are coming out of City Hall. I get the feeling that more than former PDX occupants are reading this blog with interest.

And the cancellation fees can't be too high, can they Jack? I mean, I've seen multi-million dollar projects go away for under 15% and some lawyer-time. Given that this bad idea is a distraction for the City Council from doing something useful (read: attracting real companies back to PDX) that seems like the best (albeit "money for nothing") answer.

There are several contracts that apparently compel the city to provide a tram, come hell or high water, no matter what the cost. "IGAs" or some such. And who knows what sorts of damages could arise under those?

I've asked to see them all. We'll see if I do.

It looks to me as though the fat cats up on Pill Hill are going to bankrupt the city. Chalk up another brilliant move by the city commissioners. Especially Sten and Saltzman, who were there from the beginning, but also Fireman Randy, who cast a few aye votes for the tram and should have known better.

I can see the movie now: “The Tram That Ate Portland”


"...but also Fireman Randy, who cast a few aye votes for the tram and should have known better."

I plead guilty.

However, I live by the old saying

"Fool me once, shame on you.

Fool me twice, shame on me."

Since the day of the announced price increase to build the Tram, my advise to Commissioner Adams and Mayor Potter has been either the developers and OHSU eat the new and future price increases or we, the city, pull the plug on the project.

And no, I will not agree to spend urban renewal dollars or any other city controlled resource, general fund or otherwise, to subsidize the tram.

I also think it is open to further discussion whether or not we can cancel the tram and not be liable to OHSU for damages and/or harm the city's credit rating.

But isn't the purpose of the Tram to provide an escape route for the nano-tech lab?

...either the developers and OHSU eat the new and future price increases or we, the city, pull the plug on the project.

If we tell the Tram Local Improvement District (LID) participants they will continue to fund any and all future price increases, they can elect to kill the LID by withdrawing their support for it. (They've been counting it as a cheap funding mechanism.)In that case, they --not the City-- could be construed as pulling the plug. Can OHSU sue the city for not completing a project OHSU pulled the plug on? And couldn't the City then sue OHSU for consequential damages and whatever contracts the City was induced to enter as part of the LID process?

OHSU et al may have anticipated a cap on their "contribution" but life doesn't work that way, and if you want a showcase project that hasn't been done before, expect surprises. (In fact, didn't OHSU contribute to cost over-runs by forcing a change in the upper terminus location, creating tougher design issues?)

I'm encouraged that Sam is talking tough, along with Commissioner Leonard. Whether we're stuck with this project, or not, its important we protect the City from further cost over-runs on this project that seems to have less going for it the further along we go,

Randy,
I genuinely appreciate your candor.

However, the Tram is indeed being funded in part by Urban Renewal. Funding which you voted for shortly after coming into office.
I suspect that is the "fool me once" event you referred to.

One of the most disturbing components of this unfolding story is who exactly fooled you.

I contend it is city staff at the planning department and PDC who is misleading public officials and the public at large.

The new revelations about the first OHSU building, for instance, did not come from city or PDC staff.
It should have. They knew the details. Instead that came from a couple private citizens, a good journalist and the WW.

Likewise when the PDC make the pitch for Trammel Crow Residential's "Alexan" tax abatement staff new the so-called affordable units did not include parking with the so-called affordable rent. They also knew the proposed rent had no real world subsidy as an outcome of the abatement. In fact the proposed so-called "subsidized" rent levels may have been above market rate for the small studios as presented.
But the PDC pitch that I witnessed misrepresented a gain of affordable housing in exchange for the multimillion dollar abatement approval.

I hear some retreats of sorts have been held with the Council and PDC.

I hope you are discussing the staff's lack of information or misinformation given to decision makers and the public.

Given today's information the Tram should either be mothballed or be funded solely by OHSU, the doctor's group and the voluntary LID only.

The true price tag is approaching the cost of replacing the entire Sellwood bridge, a vital transportation link used by with 34,300 vehicles a day. Until it's condition caused trucks and TriMet buses to be prohibited.

To be clear, the city's original commitment was for a contribution through the urban renewal district. I knew that when I voted for it and I will continue to abide by that commitment.

I will not, however, agree to contributions to the Tram project beyond the city's original commitment.

My "fool me once..." comment is on the promises made that the last increase of the projected cost of the tram would be the last.

Lyrics in the background: You gotta know when to hold 'em, know when to fold 'em...

Randy, you're starting to sound like a Portland taxpayer with your "fool me once" attitude. I like it.

If OHSU really wants this tram, it should pay for it out of the Oregon Opportunity funds they scammed from us in 2002 (Measure 11). OHSU has $300 million from state-funded GO bonds to pay for this and other biotech capital projects. I believe OHSU's current ante on the tram is just $4 million which is likely budgeted from Oregon Opportunity funds. We (the taxpayers of Oregon) are all on the hook for repayment of these bonds. Let OHSU use this money for the tram if it wants it so bad. Then Portland can go about wasting my money on other projects.

Jack, I respectfully request that you learn about this. Oregon Opportunity project:

www.ohsu.edu/about/opportunity

Otherwise, it might be worth a Pulitzer for some enterprising WW or PortTrib scribe.

All the OHSU tram project really needs for long-term success is the missing downhill ski run.

This is beginning to remind me of that Simpsons episode where Springfield builds a monorail that blows up on its maiden voyage.

Update: Governor Ted's 2005-2007 budget includes $32 million for debt service on the Oregon Opportunity Bonds, paid for with Tobacco Settlement proceeds. I believe the bonds will take approx 20 years to repay (which makes Oregon taxpayers obligated for at least $640 million to pay for $300 million in capital improvements on Pill Hill). Makes you long for the good old days of profligate spending of Sens Hatfield and Packwood.

Oops! We're in for the debt service on $300 million, which will exceed $320 million from state budget (approx $32 million x 10 biennia), not $640 million.

Commissioner Adams and Leonard (and the rest including PDC) should look at the Tram from a cost benefit analysis. The $45M tram plus a 15% building contingency amount (which the media leaves out, and most building industry experts say is a more realistic contingency for a project of this complexity) makes the hard cost total for the tram at $51.75M. Doing a 20 year life cycle cost analysis that includes costs for financing, depreciation, maintenance, operations, and land costs, the actual costs for the tram is at least $173,750,000.00 million dollars. A good share of it taxpayer dollars. That equals $65 dollars for each trip on the Tram. Compare that to a shuttle system of $2 to $3 dollars/trip. And remember that the shuttle system has to be inplace as a backup for bad weather and repair and maintenance days. Commissioners and PDC need to do a true life cycle costs of the tram. It is not too late. I'd recommend not having PDC do it for good reasons. Oh ya, I trust them, like when they intially told our neighborhood and city that the tram would be about $8.5M. Which the media reports the beginning price at $15M to $24M depending on who's reporting


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