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Thursday, October 15, 2009

Paulson goes into cornered-rat mode

The continuing saga of the Paulson family and their two spendy sports stadium projects took a wild turn the other night when His Lordship Henry III got up in front of the Beaverton City Council and said that unless and until he gets a firm deal on a new minor league baseball stadium somewhere, he won't bring "major league" (by U.S. standards) soccer to Portland.

This bombshell, which was clearly news to the rubes at Portland City Hall who have already promised the Paulson boys yet another hopeless renovation of PGE Park for soccer, came on the heels of some other fascinating news: Even if the Beaverton council cuts a deal with the Paulsons for a new $60 million baseball stadium, the voters of that 'burb are going to put it on the ballot. And the prospect of the project winning a majority vote of the city's electorate is far from a sure thing.

Let's take a closer look at these stories in reverse chronological order. First, His Lordship's announcement:

At Tuesday night's meeting, Beaverton City Councilor Cathy Stanton questioned whether Paulson has secured an agreement to buy and operate the pro soccer franchise beginning in 2011, requiring a $31 million renovation to Portland's PGE Park.

"Yes," Paulson responded. "But it's conditional on finalizing the deal with Portland. And if I don't get a baseball deal done, I'm not going to finalize the deal with Portland. So MLS will not come to Portland unless I do a deal for a new baseball park."

This is the same ploy the Paulson folks tried when they were attempting to railroad a new pro baseball stadium into Lents Park in Portland. "If I don't get my way with you, I won't do the soccer deal. And then all my soccer fans will blame you." The residents of Lents had the intestinal fortitude to show them the door anyway; it's not clear that the Beaverton folks will react the same way.

Meanwhile, outside the city government, the citizenry of Beaverton has discovered that it should be easy to force any stadium deal onto the ballot. Given the relatively small population out there, they don't need a huge number of signatures to require a public vote on any bond measure that would pay for the new minor league stadium. From the Beaverton Valley Times on Tuesday afternoon:

Opponents of the plan to build a stadium, who showed up in loud numbers at the council meeting on Oct. 5 and demanded that the issue be put to public vote, can make that request a reality if they choose. A bond decision can be forced to public vote if 5 percent of the electorate signs a petition within 60 days. That would be about 2,200 people, city officials say.
And from the opponents:
Wilson said her group has no money and is only loosely organized. But she said there would be "no problem" getting enough signatures for a vote.

"If the citizens of Beaverton want this, we will accept that," she said. "But we don't know that."

Cities hate bond elections. They make the Wall Street types nervous, and they slow things down considerably. One of Paulson's primary tactics is the short deadline -- the guy's a veritable font of deadlines, most of which aren't real -- and a bond election takes a while. And if the outcome of the election is negative, His Lordship finds himself back to Square 1 on baseball.

Now he says he'll be back to Square 1 on the soccer stadium, too.

The drama on the Paulson deals never stops. If ever there was adequate warning about the stability and business acumen of a private enterprise that the politicians are going to bank eight or nine figures of public money on, this is it.

Comments (28)

I suspect that the comments about soccer going to winter play is going to give this thing the wet blanket treatment.

The "short deadline" gambit worked for Obama's health care proposal. I wonder if Paulson has been talking to someone in the current executive branch.

Yeah, all his soccer fans will blame them for not letting the deal go through. Let's get a show of hands: everyone who wants major league soccer in Portland who isn't expecting massive kickbacks and skim-offs from stadium construction, raise your hand., there's two...

What the mainstream media has not yet reported on (but Bojack has) is the fact that PGE Park can't meet -- or even come close to meeting -- Major League Soccer's minimum requirements for restrooms, seating, and food concession stands. And in order for the City of Portland to sell bonds for this project, it will be required, under federal law, to make that information public. So, how is the city going to sell bonds for a project that it must acknowledge is completely flawed? By the way, those MLS guidelines are contained in the document, "MLS Venue Design Guide," dated September 1, 2008. So, why wasn't this document made public during the city's soccer task force hearings which started in December, and before the city council voted to approve the deal in March? In fact, the document wasn't made public until September 3, 2009. So, again, why hasn't the mainstream media reported on any of this?

Let's hope that they can get this onto the ballot so the citizens of Beaverton can decide for themselves if they want taxes that would otherwise be hidden away in their electric, gas and property tax bills. 2000 signatures in 60 days sounds very realistic.

Peter asks, "So, how is the city going to sell bonds for a project that it must acknowledge is completely flawed?"

Now that's the funniest thing I've ever seen here.

The answer is the same way the other completely flawed projects were handled.

Bureaucrats along with high paid ouside consultants will be directed to come up with a plan where the flaws are miraculously gone.

You see they can make up anything at all and not be scrutinized or held accountable for anything. Then on follow up the same bureaucracies self evaluate the success of the project and it's on to the next boondoggle.

I see the Oregonian editorial today says the Beaverton plan will only cost the average homeowner $5 a month.
Yet another mission creep of government into what is none of their business resulting in misappropriation of millions in tax dollars.
And later these elected scoundrels and staff will be disparaging taxpayers for not wanting a tax increase for basic services.
With millions comitted to what never should be, basic services are in perpetual crisis.

"if I don't get a baseball deal done, I'm not going to finalize the deal with Portland."

So what? Are politicians in this town that stupid to buy this ploy? Erm, wait this is Portland after all.

Maybe we need Sherriff Randy to ignore pattrolling the lawless water reservoirs and inject some more intelligence into the argument. Erm, wait this is Portland after all.

I think he's stringing Beaverton along, and that he still wants the Beavers in Portland--he was hoping that Portland would come running back after it truly looked like Beaverton was going to work out, but now that that failed, he's playing the next card: freaking Portland out by making them worry that their soccer team will leave if the Beaverton voters don't do the right thing.

Rarely have I seen a wheeler-dealer want to make a deal so bad that he turns it into a traveling sideshow.

Yet local governments keep trying to line up and buy tickets by borrowing taxpayer money, so taxpayers can line up and buy a ticket later to "help the local economy".

Truly, only the most sinister or most stupid politician could fail to admit (or see) the shell game being played on them.

Usual Kevin,

Don't be so cynical. My friend and I killed a fraudulent HUD-funded city project in Southern California in 2001, when we discovered that city officials and a consultant had cooked the books in their HUD application, which was signed under penalty of perjury. Once we let city officials and HUD officials know what we had discovered, that project quietly died a few days later. So, the system can work if you don't give up. I once met a city official whose reputation was that he was "too smart to get caught," but even he said that you've got to realize when you've reached a "drop-dead point," and simply walk away from a project.

I hope the voters of Beaverton won't be snookered about the real financial costs of this proposed deal.

The average tax rate bill is $18 dollars/$1000 dollar valuation in Beaverton. That means that for a $60 Million dollar facility the real tax benefits to Beaverton should be $1.1 Million dollars per year if in private ownership. But since the taxpayers will be owning it, no taxes are paid.

What's even more disgusting is Paulson has kindly offered only $875,000 in rent payment per year. This amount doesn't even cover the cost of the lost property tax bill-a $125,000 loss. And the facility maintenance costs, administrative cost, and the debt service cost on $50 Million ($2.5 Million per year) isn't even covered.

What a sweetheart deal for Paulson. Don't buy it, Beaverton.

Jerry, am I missing something or did you slip a typo into your estimate of the damage?

$1.1M - $875k = $2.25k difference, yes?

George, thanks. I didn't slip a typo, I was being kind and only noting the difference between the lost tax revenue and Paulson's paltry rent payment. You're right if you add up other hard costs the $2.25K is correct.

What I want to know is who is giving Paulson his advice? I mean, really! He has walked into one public relations disaster after another!

Is he actually paying someone to advise him, or is he making this up all by himself? Whatever he is paying anyone, it is too much.

Unless his instructions were: "Make me look like the biggest a****le in town."

Peter Apanel

You must not have read my post very carefully. I said that getting 2000 signatures in 60 days is "very realistic". This should have a very good chance of going to the voters, and if they decide to vote for this boondoggle then I'll shut my mouth.

I think this brief story shows that Paulson, apparently, is a 12-year-old with a Blackberry.

"$1.1M - $875k = $2.25k difference, yes?"

No, it makes $225K = $225,000/yr.

I sure hope Little Lord paulson doesn't get splinters when the door hits him in the ass on the way out.

Leave LLP, leave, and take what is jokingly called MLS with you.

Usual Kevin,

Sorry about that. I was responding to the post by Ben.

Good for Beaverton if they can get this on the ballot. Andvit sounds like they can. But...

As a longtime resident of, and recent home buyer in Clackamas County, I'm a little more worried now about the "talks with Clackamas County" they keep alluding to without detail. I sure don't want to get stuck paying for this turkey either!

So, what kind of funding mechanism(s) [i.e.,sweetheart deals] might my county come up with for MP? Would it most likely be some tax like Beaverton is proposing, or some other scheme like urban renewal $ the way Portland tried? I know so little about this stuff, any info - however speculative - would be most appreciated.

It would be harder, I would imagine, to mount a successful grassroots campaign against this at the county level, than it will be for Beaverton. There's the bigger population, which would require more signatures be gathered, for one thing. The huge geographical area that is Clackamas County wouldn't help either. I just hope we don't get some crazy boondoggle sprung on us at the last minute.

I think LLP should talk to Boardman. They were very interested in the NASCAR track proposed for Kitsap County, Washington, and since it looks like LLP's "strategy" (for lack of a better word) is to threaten to move the facility farther and farther away from downtown Portland, Boardman sounds ideal.

This whole fiasco used to make me mad. Now I just shake my head and give a sigh.

Maybe by the time this is said and done, Paulson will be forced to go get a real job.

Robber Barons don't believe in real jobs.

I felt the same way. The senior Paulson's devastating moves with the economy are one thing - that will always make me mad.
But Merritt? I am past the anger stage, and the stage where I shake my head and sigh. It took some real work, but I'm now enjoying these shenanigans. In fact the situation has become a pure delight.
Randy was just on the local news saying Merritt needs to adjust his attitude, and it was topnotch comedy.
What happened to the lovefest?

Merritt looks like a pouting preppy who just found out his valet's been banned from campus.

My new dream scenario is MLS in the winter with the Timbers Army drinking beer in a January snowstorm with Merritt and Randy scrambling to find the funds to build a dome over PGE Park.

Keep up the laughs, fellows. I wish more comedy was this good.

One request: Can we get Lents in the mix again? Cameos are great, but those people deserve a reoccurring role.

Merritt was just on saying that he's always confident that things are going to work out. Hey, dumb ass, if our fathers had 700 million we'd be more confident about things working out too.

Keep it up! I love your work!

Call my people - we might be able to get you a show on Comedy Central.

"Randy was just on the local news saying Merritt needs to adjust his attitude, and it was topnotch comedy."

It was comedy indeed. In that same news report, they mentiond the LLP had been seen late afternoon at City hall trying to corrall commissioners.

You can bet that baseball is soon to be Portland's problem again.

Does the signature of 5% of the registered voters in Beaverton to get a bond measure on the ballot apply to Portland? If not, why not?

I'd sure like to get the PGE Park once-again-remodel on the ballot so the taxpayers have a voice. I'll throw in $500 to the petitioners. That's what it will cost me if I live another 20 years.

"I'd sure like to get the PGE Park once-again-remodel on the ballot so the taxpayers have a voice."

Agreed, lw. In this entire stadium fiasco, this bugs me the most...that outside of the overgrown frat boys (Timbers Army) and those who stand to make a few quick bucks off the latest remodel, I don't know of anyone in favor of this nonsense.


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