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Tuesday, October 30, 2007

Crisis of the Century of the Week

Now that OHSU has a health club and aerial tram, it's suddenly discovered that it's out of money. In today's paper, the president of the institution (who makes what? $600,000 a year?) seems to be saying that it has only enough funding to run for another 20 months.

No OHSU after June 30, 2009?

Looks like a bailout is in order. Will they go for it in the upcoming "special" session of the Legislature, or wait until the next "regular" session? And how much will they try to bully the City of Portland's taxpayers into paying?

Hold onto your wallets, folks, because the bill for this one is going to be a doozy. We can't let OHSU fail. It must become a world-class biotech and nanotech center, creating thousands and thousands of new jobs and serving all the poor Oregonians who presently suffer without health care.

Like the tram, it's the linchpin of the state's economy! Without pumping more money into OHSU, we are all quite clearly doomed.

Comments (31)

Interesting to see OHSU now (in a veiled manner) talk about burn rate for their business. Last time I paid any attention to that rate was in the dotcom bubble of new startups. Who ARE these mis-managers anyhow?

Who ARE these mis-managers anyhow?

The friends, neighbors and confidantes of the West Hills gang.

What a week, and it's only Tuesday... can we begin to see a theme in Portland?

1. OHSU is running out of money.
2. Condo's aren't selling well in South Macadam.
3. Condo's aren't selling well in Pearl District.
4. Aerial Tram can't afford to let patients ride for free.
5. City says it doesn't have enough money to fix streets.
6. Guisto knew about the rape of a girl by Neil Goldschmidt.
7. Citizens are excluded from private meetings to rename Interstate Avenue. This, after Potter walks out of meeting, acting like a baby.

So what does Sam Adams do...
Let's find out where we can put more trolleys.

Passage of Measure 50 should help heal OH&SU's pain.

Nothing like a Tram Ride to bring in the unhealthy kids.

That providing the 'smoke smugglers' don't steal the pot of gold.

If you study (and even then, PDC and OHSU has obscured the numbers) the eight amendments to the SoWhat Agreements, taxpayers have already given many bailouts to OHSU and more are on the drawing boards:

$5 Million given to the OHSU for their Health Club for biotech jobs-not one job generated.

$3 Million for air rights for housing over OHSU's future 1400 space parking garage. The money was given to OHSU almost 2 years ago and now it is announced that OHSU hasn't the money to start the garage until 2010, if then. Pay for air rights before there's any opportunity to use such?

$18.1 Million for future biotech jobs, incentives for biotech, nano companies to come to SoWhat, condo purchase incentives to OHSU employees to buy in SoWhat, space enhancement funds for biotech companies to upgrade spaces for bio research, etc.

$5 Million in reduced/eliminated construction fees, permit fees for the Tram that is used by over 85% by OHSU.

Millions (PDC has no accounting of amount) given to OHSU for agreement with PDC/City Council that each dollar raised by lobbying with Feds/State, OHSU receives half.

Plus, theres more, but now let's examine the latest lobbying by OHSU's for more money that is now coming to light.

OHSU's representatives Mark Williams and Brian Newman (outgoing METRO councilier)are suggesting that the $60 Million budgeted I-5 exit ramp into SoWhat onto SW Macadam may not be needed even though it has been a major component of trying to alleviate the massive traffic problems developing in SoWhat. They have suggested to PDOT and the URAC that these fed/state funds should be reallocated for other uses in SoWhat. What this means is that they want these millions to pay for new streets for their OHSU campus on the donated Schnitzer property. PDOT is now involved in a "sensitivity model" study according to Art Pierce of PDOT, to evaluate OHSU's postulate. Interesting.

Mark Willams and other OHSU agents have also planted the seeds in the media that OHSU will need MILLIONS more of tax dollars to provide infrastructure for their SoWhat campus dreams.

And OHSU to realize even more millions for their Schnitizer campus have explored the notion of selling air rights, code allowed massive density for their property to other developers.

I am sure there will be more success and attempts to squeeze more $$MILLIONS from the taxpayers of Portland and Oregon than those listed above. There needs to be proper accounting, media attention, and public discourse of how our tax dollars are being used by OHSU.

Breaking News: We now need another Big Pipe Sewer Project just to flush the money for SoWhat down the drain.

Maybe all the biotech jobs were actually going to be nano-jobs, invisible to the naked eye. You have to wear special goggles to see them all. I wonder if they hand out goggles when the donors get their tours.

I deliver up to OHSU every weekend, and despite finding $50+ million for the tram, the road up there is in awfully scary shape - it seems to be sliding down the hill, visibly. I'll admit that is one argument in favor of the tram (reducing traffic on a geologically treacherous road), but I would think they might consider the safety issue... oh, wait, the injured would be clients. Hmmm...conflict of interest?

It is pretty appropriate that they named the new building after Kohler (why that building is going to create "additional profits," but other new buildings would not is beyond me). I wonder what we'll name after G.W.B. after he finishes "tramming" the USA.

Did anybody else notice the statement in the article that research and education loses money? Thank goodness for all the "downstream benefits."

All of this aside, I'm still not convinced that this whole boondogle isn't an overall benefit to Portland, given the other options for generating jobs in the city. I'm not saying it's been managed well or that it should have been greased, only that I'm not certain its net impact is negative.

Friends, it's time to get real. It's time to stop the financial bleeding of Oregon government. OHSU is going to run out of money?? Fine, let em. We'll survive.

One can say that Vera/Sam has done a fine job making the whole thing sustainable as the debt will be around for the "children"'s grand children to pay for. Let's see now, how can we get "greening" in this comment. Oh, the debt will be taking GREENbacks from the children's children's wallets forever. And to think this joker is going to be our next mayor!

"Who ARE these mis-managers anyhow?

The friends, neighbors and confidantes of the West Hills gang."

One Board Member is (used to be? ...still is?) Scott Gibson, of Intel, Sequent, and multiple other companies. He knows business and (from the OIT side) quasi-governmental entities. And he should know burn rate, accountability, and turn-around situations. If he is still there, he should step it up and kick some...

Just offering up the same old governmental response of "Hey, somebody put some more money in the old checkbook, we seem to be running low" ain't going to do the trick. OMSI school of mgmt is not very impressive to me. Especially coming from a private sector guy.

(OIT above should be OGI)

Having looked at the Board, I see only two business executives (Scott and Kirby, both ex-Intel). And the Leadership team is even weaker, with more PhDs than even Rajneesh Puram had in their heyday.

Reduce your expectations, and get out your check book.

I'm feeling a little déjà vu. Three year ago, I wrote to the City of Portland Auditor and testified before council regarding the LID assessments for the Portland Aerial Tram.

My letter said:

"In 2001, Oregon companies received less than 0.1% the of total nationwide bioscience venture capital. ... Cities that already have multiple research universities, large drug manufacturers, and access to large amounts of local venture capital are all seeking biotechnology firms (Portland Development Commission, Economic Development Strategy 2002 for the City of Portland). Indeed, even established institutions, such as OHSU, are facing vigorous competition for federal funding from institutions in other long-established bioscience centers (see "OHSU Sees Drop In Award Rankings," Oregonian, July 4, 2004). The gap between Portland’s components for critical mass is so large that it defies economic logic and common sense to assert that the Aerial Tram is the key to overcoming the City’s relative weaknesses in catalyzing development of this sector."

OHSU is portland's largest employer?

Liberal BIG GOVERNMENT will always have excuses to raise taxes - always.

Liberal BIG GOVERNMENT will always have excuses to raise taxes - always.

prove it.

Quite the diverse group. Do any of them own a printing machine? I meant a money machine.


Eric Fruits:

Although you were dead on the money in that testimony, the real corruption at OHSU is just that they intentionally bamboozled us about biotech to justify their SoWhat dreams.

No, that is just run-of-the-mill empire-building lies. No jail time for that, because you can't prove it was a scam.

The real corruption lies in all the stuff Jerry details above. Payoffs, money laundering, money for future airspace ....
THAT is the stuff that people might go to jail for.

But this is Portland. They don't go to jail, they just molest little girls.

This is all so depressing!
Where is the outrage, the protests, the just plain "I'm mad as hell and I'm not going to take this any more!" attitude on the part of the citizens of the city, the state, the nation!!!???
I cannot believe I am the only one screaming at my tv and computer screens.
Am I?

Here's something to chew on.
Yes it's money Laundering.

You know the 100 parking spaces (The Strand) that the PDC paid for with $6.8 million to Homer Williams?

Well that's $68K each.

A buyer of a Penthouse unit in the Strand had to buy a third parking space .
He paid $20K.

Not $68K but $20K.
The inflated $6.8 million was one of many payments to developers and OHSU. Some for compensating them for the higher Tram costs and their cooperation in making it appear like the public share remained small. Other payments bought other cooperation such as silence while the PDC and city hall sing praises form SoWa.

Discounted land and cash payments have bought everyone involved. OHSU has been channeld some 19 million in payments through money laundering schemes.
$3.5 million from PDOT went to SoWa streets just after $3.5 million in SoWa streets TIF money was paid to OHSU.
These are swindlers and money launderers.
The list is too long to add here.
But they're all getting paid big time.

There never was any biotech jobs coming,
that was a swindle.

The first OHSU building in SoWa is nothing but an multimillion payoff for the OHSU elite with lavish offices, health club and no propety taxes, business taxes or TriMet taxes.

The prior finished building on the hill sucked up $100 million of the $200 million voter approved "Oregon Opportunity" bond funds. The whole $200 is gone. That was a swindle. OHSU knew before the Tram and the luxury building at SoWa was built that they were 10s of millions short on equipping and staffing that new building on the hill.

OHSU used up the $100s of milions in Oregon Opportunity funds.

OHSU acquried the Oregon Graduate Institute and are now, as expected, liquidating it to pay their bills.

People with names made millions at every step. Managing the Oregon Opportunity Funds, taking manegement fees for OHSU projects, wheeling and dealing the OGI purchase and re-selling.

SoWa property owner/ developers had no use for the Tram. What they wanted was the sweeping zone changes to allow tightly packed high rises and hundreds of millions in free infrastructure.
All they had to do was go along with the Tram Scam.

Now Brian Newman is on board OHSU to spearhead the next swindle and money laundering schemes.

20 years from now we'll be reading stories asking who knew about it.

Where is the outrage, the protests, the just plain "I'm mad as hell and I'm not going to take this any more!" attitude on the part of the citizens of the city, the state, the nation!!!???

Thats just it, this is the government the people of Portland elected. Im guessing this is what they want, otherwise they wouldnt keep electing them again and again.
That, or they are letting it slide because of political ideology.
And you can bet money Sam the Tram will be elected mayor to continue this nonsense.

What kind of a mess is this?
Today the Oregonian calls it all "loose ends" and says biotech still has the potential to bailout OHSU?
"loose ends"?
Of course the editorial page editor,Bob Caldwell is married to OHSU communication director Laura Cuykendaul.sp?
How perfect.
The Tram has meant nothing but added debt and instability for OHSU requiring a yearly payment of around $3 million.

Oh but wait a minute. The PDC is making sure OHSU gets millions every year to make that payment.
Along with payments to developers, HOW BIG IS THE PUBLIC SHARE of the Tram?
OHSU doesn't have 20 months. They were broke 20 months ago when they began liquidating.
OGI- 15 buildingss on a 40 acre site. OHSU sold the property for $44,400,000, will then lease back the property for a minimum of seven years plus two, three-year options to extend the lease for up to 13 years.
I do think Kohler is a reptile.

Check this out from April 7, 2006


C. Explained the OHSU vision to strive to achieve excellence in all that we do, which translates into the following specific interrelated goals: Provide the highest quality education (strive for top 10 in all major areas). Provide the highest quality health care. Become top 20 in NIH funded research – a measure of research quality (peer reviewed, competitive grants) as well as research quantity.

D. Explained strategic elements. Challenge--How do you fulfill an ambitious public mission in an era of greatly constrained resources? Strategic Response--OHSU established a new organizational structure in 1995 that allowed a greater flexibility to generate and use investments in ways that can better leverage state support. Strategic Investments--faculty recruitment, two new buildings on Marquam Hill, Biomedical Research Building, Patient Care Facility, new campus at South Waterfront, linked to Marquam Hill by aerial tram.

E. Explained why a public corporation was formed. (“I think it was the right choice.”) As a state agency, OHSU historically depended heavily on state funds. By the early 1990s, that picture had changed dramatically. Measure 5 passed. Healthcare market was evolving rapidly (managed care). OHSU was poorly positioned to compete. Potential solutions ranged across a broad continuum--become a super state agency, stay the same, public corporation, not-for-profit private corporation, and spin-out hospital and clinics.

F. Stated Senate Bill 2 (now ORS 353) gave OHSU tools to compete. Streamlined governance structure. OHSU has its own board appointed by governor, confirmed by the Senate. Streamlined decision-making: business model. Gave us the ability to go to the bond market. Maintained public missions. Sustained educational programs even through Measure 5. Provided a partnership with state of Oregon.

G. Reviewed the school's growth and change. Showed that in 1975, OHSU had $14 million in grants. In 2004, this became $260 million in grants. State appropriations have gone from 42% in 1975 to 3.6% in 2004.

H. Explained the Oregon Opportunity.$200 Million Public Investment. $103 million for Marquam Hill Biomedical Research Building/Renovations. $12 million for Bronson Creek Building/OGI Renovations. $10 million for State-Wide Research Network/HERON. $75 million for recruitment and research infrastructure. $13 million Science and Engineering (Bioengineering). $48 million all other OHSU. $15 million indirect university costs.

I. Discussed new initiatives including the Advanced Imaging Research Center, Oregon Stem Cell Center (Flow Cytometry, Stem Cell Antibody Generation), Center for Bioinformatics and Computational Biology in Medicine, Proteomics, Pharmacokinetics Core, High Performance Computing, Gene MicroArray Shared Resource

J. Showed the Aerial Tram. Aerial tram has been the linchpin that made South Waterfront possible. City looking to redevelop brownfield that lay vacant for years. Identified OHSU as attractive anchor tenant. OHSU looking for flat land to expand. City eager to keep OHSU in central city. Tram concept approved in 2002 as part of Marquam Hill Master Plan. No alternative could match the tram for speed and reliability. Rapid transit link essential to retain synergy between patient care, education and research. South Waterfront would have been impossible without the tram. Despite the controversy that has surrounded it, we believe the tram fits squarely within Oregon values. Innovative solution. Far more efficient and environmentally friendly than the hundreds of shuttle buses that were the most frequently

In hind sight...too bad OHSU didn't move to Hillsboro!

OHSU was never going to move to Hillsboro. That was such BS, and part of the swindle to get the Tram and luxury tower for the doctor's tax free offices and health club. Much like the notion of the Tram shuttling patients.
However, they would have been far better off taking some prudent steps to expand biotech out there versus recklessly wasting millions on the Tram and SoWa.
As it stands now they'll end up closing the Oregon Graduate Institute, cut back on their community health care programs while risking other core missions as they dig out of the incompetent and corrupted hole they find themselves in.
Management heads should role as well as a few Board members.

That's heads should "roll"

So when is the city filing for Bankruptcy?

Jerry is 100% right. Urban renewal money is subsidizing OHSU's operating deficit. As Jerry said, we can expect PDC to spend more public money propping up OHSU, at the expense of SoWa's other development priorities.

OHSU made an expensive error by expanding into SoWa instead of Washington County. It would be a strange turn of events if OHSU discovers that Mark Williams made a "deal with the devil" by getting the PDC to offset OHSU's operating deficit with TIF money, since that led OHSU to expand in the wrong place, locking in a dismally uncompetitive future.

It would also be strange if the PDC's well-intentioned effort to keep OHSU in Portland paradoxically leads to OHSU being unable afford to build a new research center in SoWa.

A recession will be the nail in Portland's coffin. I expect to see a huge exodus out of that city soon.

My bold prediction:

If Measure 50 passes, the Legislature will use a chunk of the money to bail out OHSU under the guise of "protecting healthcare."

You heard it here first.

Actually, Garage Wine, I've already suggested that a couple of times when Jack was pimping M50.

But it never hurts to repeat the obvious to those in denial.

Sometime ago, I had a enough of Vera/Sam,Dan, Charlie(he really got to me)Diane..etc etc etc.PS:and Randy.

I looked at the idea that if enough people really were like me, a message shot across the bow of the likes of stuff posted here, hitting one named elected offical who was screwing us all, that a recall would stop the others in their arrogant tracks.

That recall failed...Money to do it the biggest reason(why we didn't get that money is a story in itself), not to mention a city hall directed diversion 2nd recall of Vera.

Now, all I can say is I told you so!

That level of arrogance, imcompetence, stupid projects, favorite projects to favored developers and construction firms, is at best, out of cotrol.

My mistake was trying to cut the head off an old snake in the snakes den without the money to do it...but the snakes eggs hatched, and the rest is playing out daily.


2. Are you just content to "blog" about it or fight?

3. Which councilman would head the list to stop this insanity?

Simple running for office platform:

"GET BACK TO THE BASICS" fire/water/cops/sewer

Can you stick with the above and get elected in Portland,Oregon?

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