This page contains a single entry from the blog posted on March 10, 2009 1:52 AM. The previous post in this blog was A great night for the Blazers. The next post in this blog is What it would take to stop the Paulson stadiums caper. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Tuesday, March 10, 2009

Paulson stadiums fiasco is a done deal

Portland's dying daily newspaper is breathlessly reporting this morning that the Paulson stadiums deal is sealed. According to the O, Little Lord Paulson and his Bush administration honcho dad have "agreed to hold the city virtually harmless for paying... back... most of" the construction costs in the ill-advised plan to spend nearly $90 million on new minor league sports stadiums for that family's private teams.

There is so much weasel room in "virtually" and "most of" that you just want to scream, but until the details of the deal are revealed, there's no way to verify whether the O reporter's sunny, vague assessment is anywhere close to correct, anyway.

The basic algebra that we have been detailing here for the past week or so has not changed. Unless the rent on the stadiums pays all of the city's construction debt, the rest will have to come from taxes and city "fees." There's no other money in the picture. If the debt is $85 million and the interest rate is 6 percent, the debt service will be $6.2 million a year for 30 years. Today, suddenly, they're talking about only $60 million of "city-backed loans" -- no telling where the other $29 million of construction funds in the liars' budget are supposed to come from. But at 6 percent interest (which is low -- the rates will likely be higher), $60 million of bonds would require annual payments of $4.4 million a year for 30 years. Unless the Paulson family is agreeing to pay $4.4 million in rent on the two stadiums, taxes will make up the difference. New taxes, old taxes -- unless it's rent, it's going to be taxes. How much rent the Paulsons are agreeing to pay, no one at the O is saying, and they probably don't even know. If the rent is only a couple of million dollars a year, a guarantee of that rent doesn't come anywhere close to paying off the bonds without taxes.

And indeed, there will be plenty of taxes paying off those bonds. Just as we noted yesterday, there will be a huge new "urban renewal" area declared all over northwest and southwest Portland -- from NW Thurman Street to Portland State -- and all increases in property taxes from that area for decades will go to pay for these stadiums. Since the new minor league baseball stadium will be built next to the Rose Garden, the same will apparently be done with property tax increases in the grossly overdrawn "Convention Center urban renewal" area.

And of course, we're ignoring for the moment the $27 million that the city still owes on the last renovation of PGE Park in 2001 to 2003. We're all just supposed to forget about that.

You think it's hard to fix a pothole or get a cop to show up now? It's only going to get worse for the next 30 years. While they close fire stations and police precincts, and cut off funds for mental health assistance and child abuse counselling, all our taxes are being dedicated to junk.

The next fake drama -- replacing last Friday's bogus lovers' spat between Fireman Randy and Lord Paulson -- surrounds the question whether the Fireman and Mayor Creepy have a third vote on the City Council for the stadiums. Don't be silly; of course they do. Nurse Amanda will probably go along, and if she doesn't, old Dan "Big Pipe" Saltzman surely will. Most readers will remember the "profiles in courage" moment when Danny Boy cast the dramatic final vote for the SoWhat District and the aerial tram -- truly the low point in the fiscal stewardship of the city. This is another one cut from the same cloth. As long as some big construction company and the construction union workers get tons of tax money, it doesn't matter how ill-advised a project is. Portland City Hall always comes through.

Oh, and guess who just showed up as a consultant on the deal -- Steve Janik! Let's see -- Vera Katz, Janik, "The Don" Mazziotti -- about the only guys missing are Neil Goldschmidt and Homer Williams. Done deal, people. As in, totally done.

The other stunning thing about the latest news is the cavalier way in which major decisions have been made about public assets without serious public input. For example, the Memorial Coliseum will be knocked down for a minor league baseball stadium. Period. Missed the hearings on that? Me, too. Remember the neighborhood involvement process surrounding the idea of putting the stadium in Lents Park? That's over now. Period. Meetings cancelled.

But the financial tragedy is more serious than the process insults. Certainly, with this misadventure, Fireman Randy passes his old nemesis Katz in causing the most lasting damage to Portland over my three decades here. When you add in the looming police and firefighter pension debacle, for which he is singularly responsible, he surpasses even the current occupant of the mayor's stall for fiscal irresponsibility.

As others have put it so well recently, the future of Portland -- what little was left after Williams and Peter Kohler sucked up most of it with the SoWhat district -- has been sold to Henry Paulson, folks. If the voting public in the Rose City ever comes to its senses, it will be too late to turn things around. Sadly, it seems time to stop paying attention to these things. It doesn't do any good.

Comments (27)

One other thought -- no one has promised Sam Adams a war chest for his upcoming recall fight in return for this deal, have they? That could never happen in Portland, could it?

I sent this through your link:
Are you guys complete idiots? (Except newcomers Amanda & Nick who can consider this a cc)

You lost millions on the last stadium deal.

You wasted millions on the Pearl. When it returned a little excess money you want to spend it instead of repay debt or support police fire and other basic services.

You wasted millions on the SoWhat and are millions short of your promises to the millionaire developers.

And now you want to do another big deal.
How much will you loose this time when reality sets in?

I have a radical suggestion:
Just run the city’s basic services and quit trying to rebuild the city to conform to some idiot planner's wet dream. It has proven too expensive - when will you realize this obvious fact?

The boiler plate that you should take to heart:

Studies have consistently shown that building new stadiums provides no economic benefit. While you are being forced to cut essential services for hard-working Portland residents like myself, would you really consider giving millions of dollars away to the Paulson family for a new stadium? Please let your answer be a definite "No."

Do you rally want to enrich another well connected millionaire at the expense of Portland’s working people? (Sadly, the answer is probably YES.)

PS: If this is such a good deal, why cant Paulson put up his money?


Somebody should really put together a video on YouTube called "Aren't you tired of Portland being treated like a big joke?" With local material, it'd run 3-4 hours. I mean the taxpayers have lost total control of this town.

My guess is Saltzman will parrot the line about how Portland is doomed without Sammy's leadership and vote.

Get ready to click another $100M+ on the debt-o-meter. I can't believe the flimsy justifications for this boondoggle. Oh snap, I forgot what they tell us to get the streetcars and the crap Madoff could pull off.

If Paulson thinks I am going to let my kids ever see a Timbers game again, forget it.

I keep hearing about an Urban Renewal Area "from NW Thurman Street to Portland State."

Economically speaking, how can NW 23rd be included in a "blighted" urban renewal area?

Politically speaking, how can NW 23rd be excluded?

If this was such a great idea why doesn't Paulson bankroll this independently and keep all of the huge profits it's supposed to generate?

This is like the bank bailout. The banks get the profits (if any) from the loans and the taxpayers get the liabilities.

Heads I win tails you lose

I loathe professional sports. If it were up to me the Blazers would still be sucking wind in the city owned and paid for Memorial Coliseum instead of the struggling Rose Quarter. I went to a Blazers Basketball game once because someone gave me and my wife a ticket. It was the first time I ever watched a complete game because I couldn't turn it off. You couldn't pay me to go to a soccer game unless perhaps they played using Randy Leonards head in the first half and Sam Adams head in the second.

It'll be a sad day if this means losing Memorial Coliseum. The Beatles played there, not to mention the 77 Blazers. Looks like the last big historic event there was the Obama rally. May I suggest a plaque?
You couldn't ask for a better symbol of losing this city to the new visionaries than to lose a historic place like that.
All to get a minor league baseball stadium when we already have one. Memo to Lents supporters: You just got played.
Oh well, I guess the payoff for following the city council is that you are not surprised anymore.
I'm also not going to be surprised if there is suddenly a wave of stories about MLS's financial problems that starts up the minute the two new suckers have been fleeced. I sense a classic Ponzi scheme here but I could be wrong.
Getting a realistic view of the number of MLS teams currently operating at a loss, could be as hard as finding out what Daddy Paulson did with the TARP money.
Next I predict a wave of "Nobody could have foreseen" stories from the city council as they explain why they have to kick in more money or else the money we've already invested will be lost.

This time I think it'll be that the tax increases from the rising property values will not be enough because the property values didn't rise, and an emergency meeting will have to take place where the Mayor says sorry, we have to tap the general fund to meet our obligations - like we aren't really anyway by intercepting revenue before it gets to the general fund.

I also suspect the Paulson guarantees will turn out to be worthless in a crunch.

Then finally we'll get the golden moment when the city council says, "The second this is settled we are going to take a long hard look at how this fiasco happened. That way this will never, ever happen again."

There are fewer and fewer things in this world you can count on. In that sense it's reassuring watching a Portland scam unfold as it always has and always will.

I really, really like the idea of Randy and Sam's heads as soccer balls....the rest of the council should donate their heads to this cause as well.
Maybe this will be the fundraiser to get back some of the money that "LLP" (Little Lord Paulson)will have fleeced from the city that we need to support the schools, fund the police and fight the fires. It would make more money than a bake sale, that's for sure!

I haven't read everything so I missed where UR comes in.

Can you please clarify so I don't have to go back and search?
Of course I want to condemn it's use, but I'm missing a tee off.

The taxpayers are getting screwed on this. City Commissioners (and the Oregonian) are either completely incompetent or willingly misleading the public about the use of Tax Increment Financing. There is a general fund impact, it just isn't on the City. (C'mon Dan - you used to be a County Commissioner - you KNOW this!) Instead, Multnomah County and the school districts will pay the bill through lost tax receipts in the URAs. Using TIF in areas that ALREADY have tax base growth means you are shifting revenues from county services and school kids to the new ballparks. Can someone PLEASE show me the blight at PGE Park? Is it the MAC? The new Civic Towers?

There are two bright spots on the horizon. First, Nigel is still the only jounalist left in town, and he's digging into this deal instead of cheerleading it like the third-rate shills over at the O. Second, the county and school districts are already planning to go to war over the use of TIF. They can't afford to let this abuse of TIF financing to go forward.

Every taxing jurisdiction that receives property tax revenue loses with TIF.
Schools, parks, libraries, police, fire, or any other basic service that operates with any property taxes.

In the City of Portland/Multnomah County TIF diverts around $65 million away from arriving in general fund budgets every year and it's been growing as the thurst for more boongoggles is quenched by the reckless wonders at the PDC and City Hall.

This loss in revenue must always be back filled to keep pace with the routine yearly increases in the cost of basic services.

The routine/yearly, average property tax increase city wide and without UR "investment" is around 4.5%.
This increase, which if it were not taken every year pay UR boondoggle debt would help offsett the rising costs.

Unfortunately there is now $5 Billion in assessed value having NONE of it's tax revenue arrive to help with those costs.

So every year it must be got from the shenannigans which obscure the taking.

In one sense I gave up. I moved out of Portland because I could see the list of tax sucking projects continuing into the future. But I'm a bit stubborn so I will never give up on being wise and careful with the public's business. I still follow this and fire off a letter or email from time to time. Somebody has to do what's right. Jack, don't give up.

PS. Ask Dan Saltzman where his money is invested. Is it in Portland or elsewhere?

I never thought the day would come when I would wake up in Portland thinking "I'm back in Chicago again." This kind of city government garbage is the reason I left and resettled here decades ago. The citizens of the city of Chicago have no power and little influence over what the city council does. Sadly, neither do we. In Chicago, almost everything is done by political "clout" which is wielded by people with money or position or connections.

Again I will suggest that the $29 million construction shortfall will come from federal stimulus funds in spite of President Obama's warning that these funds are not intended to be used for a mayor's pet projects.

By the way, I read somewhere that Steve Janik was outside counsel to the MLS-3A Baseball Task Force. Is that how he ended up being a paid consultant or was he paid for the advisory work he did for the task force, too?

Recall Adams. Recall Leonards. Recall _________ (put your name here, third vote).

Roger Paulson, a more fair, simple solution to get Pearl UR money to David Douglas is to close down the Pearl (River District) URA-it's not blighted. Then the $2.8 Billion dollars of extra value in the district would be property-taxed and some of that money would go to David Douglas. See how simple it is?

The OR Supreme Court will uphold the Appellant Court that CoP and PDC "cheated" in trying to concoct the "satellite" concept; if they decide to appeal. I think the time has about run out to appeal.

There is also a problem in Shortstop LLC and CoP's plans to create a new URA for all of Westside Downtown including PGE Park. Portland is very near to the state required maximum amount of land area within all URAs within a taxing jurisdiction. It is time for our state legislature to police the misuse of UR and to tighten up the statutes, or get rid of UR.

The Memorial Coliseum is one of the finest works of Modern Architecture , and OUR Veterans
This is a deal breaker !
Put the ballpark in the PPS building site down the street.

I loved the way Paulson casually mentioned, during the TV interview, that of course the Coliseum would be torn down. I hadn't actually heard anybody put it into words until that point . . . as if Lents was completely out of the picture. Then he piously added as a sort of afterthought that of course there would be some kind of memorial to the vets (presumably to take the place of the Memorial Coliseum). Where this will be or what it might be is anybody's guess.

Does anybody know what happens to PGE's naming rights if this deal goes through? Will the city or Paulson have to buy them out through whatever remains of their contract?

Whatever name goes on the new venues, I'd like to think it would not be a for-profit, monopoly public utility using money gained through raising our heating rates for a purpose that has nothing to do with the delivery of electricity.

PGE can't even argue that it needs to advertise and keep its name before the public. It's not as though I can choose to run to Pacific Power if I don't like PGE.

PGE: No more sponsorships . . . no more floats. Just reduce our rates and do your job.

Please, please E mail the three fence sitting city commissioners, Saltzman, Fish and Fritz and demand that they oppose this idiocy.

The E mail addys are:




Please get an E mail out to Commissioners Saltzman, Fish and Fritz tonight.

Thank you.

You forgot one more thing, Paulson's promise of 300 new jobs:

$85M @ 6% = $6.2M/yr
300 new “living wage jobs” @ $50K each = $15M

Those two items and no other expense or profits are $21.2M/yr

Divide it by 28 games * 15,000 fans = 420K tickets

Those two items / ticket = $21.2M/420K = $50.47/ticket


DON'T write to the commissioners individually. They are unlikely to see your e-mail before the meeting.

Instead, if would like your comments shared with all Council members, please address them to Council Clerk Karla Moore-Love (kmoore-love@ci.portland.or.us)

It is my understanding that these will be either read aloud or included in any in-person feedback offered at the meeting just as they are at a hearing.

Does anyone know how the $85 million deal became a $129 million deal overnight? By magic beans or something else?

I think this is a Council vote that needs lots of citizens present at it -- just to witness -- just silently witness. No drama, no signs, just watching in silence. This is gamblers doubling down with our money when they've already lost the house, the car and mom's prescription money.

To answer my own question, it includes the $40 million franchise fee the Paulsons are paying.

It's too late for sign waving or (even more so) polite/silent witness. We need a flash mob version of the torch and pitchfork society. We need to start calling them out in the grocery stores and in restaurants. I've stood in line behind Saltzman at Fred Meyer's or the 7-11: I've bit my lip in the past, and kept my thoughts to myself, but I won't anymore. He's going to get a stream-of-conciousness piece of my mind until he walks out or the boys in blue arrive.

If that doesn't work, we can bang on pots and pans and stand in front of Sam's House, or the Paulson Estate.

If the City of Portland had an American Express Card, they would be paying us a princely sum just to pay it off and close the account. Sadly, the good people of Portland, Oregon don't realize their credit card is about to be maxed out.

NW Portlander -

Your advice to not personally address the three fence sitters is misplaced. By 7:00 PM last night I had acknowledgements from two (Fritz; Fish) of my E mail. I also sent copies to Ted Wheeler, Deborah Kafoury (my area rep on the county coucil) and Ruth whats her name on the PPS School Board (again, my area's rep on that board). I received a reply from Ruth last night as well.

The representatives / pols on the boards / commissions being robbed in this scam are standing up.

You called it Jack: Big Pipe for the win.

My favorite part of the entire discussion was when Amanda Fritz asked Steve Janik (somewhat incredulously) whether he was representing the City of Portland or Paulson. Listening to his testimony, it appeared even he may have forgotten who he was representing.

At least a portion of that debit will exceed 8% according to Ken Rust.

And let us not forget the unpaid principal (plus future interest payments) on the $27.5 million of outstanding 2001 Civic Stadium bonds: they will likely require additional support from the general fund if Peregrine LLC should fail.

Clicky Web Analytics