Except that when it comes to building soccer stadiums, the Portland city council turns out to be downright sketchy. Via Field of Schemes, the outspoken Jack Bogdanski points out that the city of Portland is going to use a temporary line of credit to finance its share of stadium construction, putting off the selling of bonds until after the stadium is built:
In other words, Portland taxpayers won't get to see (or pass on) the terms of the mortgage until after the stadium project is finished. All we will know when the city forks over the construction costs is that the final mortgage is apparently going to be some sort of subprime "zero coupon" bond deal, and the Paulson family will be finding us some of their pals who will buy the bonds (i.e., make the permanent mortgage loan). In the meantime, the city's putting $11 million on the equivalent of a credit card.
. . .
How much leverage will the city have when the time comes to sell the bonds, which are likely to be far below prime? None -- less than none. The taxpayers will no doubt be taking it in the shorts -- the soccer shorts.
Furthermore, a commenter claims that
. . . MLS would be given the authority to waive all design requirements, which means that the project would go ahead despite the fact that MLS, Paulson, and the city know that PGE Park will never be able to meet the current minimum MLS requirements for restrooms, food stands, and seating dimensions that are necessary for PGE Park to serve as a fully-functional venue.
Which would certainly be failtastic if true. Here's the redevelopment agreement, and here's the relevant section:
21.2.12 MLS shall have confirmed in writing to the City that it has reviewed and approved the 100% Schematic Drawings, the 50% Design Development Documents and the 100% Design Development Documents and that, provided the Project Improvements are constructed in accordance with such Design Documents, the Stadium is approved as the home stadium of the Team.
What's clear is that there's plenty of opposition to getting this deal done, and while by all accounts the stadium deal will get pushed through, it's not at all obvious the community is happy with the arrangement. Nothing against Portland and their fans, but MLS expansion in the Pacific Northwest beyond Seattle hasn't been a shining example of public relations.
And by the way, Bogdanski's hosting a version of what purports to be the MLS Venue Design Guide. A document I'm sure we can all have fun with and should probably use to ask serious questions. I'll have a follow-up post on it unless someone else gets to it first.
-FS
14 comments:
http://theoatmeal.com/comics/apostrophe
One. There was one.
-FS
Universal rule number one in Portland: any time you have to use Bogdanski's opinion as supportive source material, you've already lost.
Well, from the document he links to in his post, it looks like he's accurate on the bond scheme. If you'd like to introduce evidence that the bond sale will go down differently than ascribed, please do. I'll be happy to correct the post.
Let me also say that knowing Bogdanski's reputation, I didn't just take the Field of Schemes post at face value and link it up with a spoonful of outrage, even though I think FofS is usually pretty reputable. It's clear Bogdanski has an agenda, which is why I made it clear where this was coming from, read some of the supporting docs and am not claiming the MLS Venue Design Guide is legitimate, although it may be.
And for what it's worth, there's been other community opposition on various aspects of the stadium issue, which I could have made clearer.
-FS
You claim it's a "sketchy" deal, but you have no evidence in place to prove that. The city contributes to the construction on credit, repays the credit once the stadium is done through issuing a zero-coupon bond, and uses the money earned from the stadium to help pay that bond off in 2035. The bond sale may also be less than the $11.9 million mentioned, but some of the money the city earns from the park will go back to repaying that bond. Consider the Timbers are contractually locked into playing PGE for the length of the bond, as well. What's so bad about that? The only risk is if the Timbers are badly under-supported, which would be a complete surprise, especially given the conservative attendance numbers used in the computations.
Also, MLS has already implicitly approved PGE Park as a place for the Timbers to play by awarding them the franchise in the first place. If Philadelphia's stadium has more urinals because it's a brand new stadium, so be it, MLS has been well aware of what is going on and isn't going to shoot down PGE Park.
Basically, that means you've just given the one blog on the internet vociferously opposed to this deal some air time. (The other opposition you link to was about the baseball stadium and proved to be a moot point.) I've enjoyed some of your writing, but this just reeks of laziness.
Anonymous, this deal is sketchy because your mayor had to lie about it in order to get people to be okay with it. Did you even read that blog post?
-You claim it's a "sketchy" deal, but you have no evidence in place to prove that.
There's a lot of assumptions being made in the revenue projections for the Spectator Funds in this document, among them, the Beavers playing somewhere nice and 3-4% annual growth in ticket revenue during the course of the bond period. And since ultimately the city backs the Spectator fund (which already has bond obligations), tax payers will be on the hook for any deficits, even though the argument is made that it is totally separate from the general fund.
And because the bonds aren't being issued now, there's another variable added into the equation that we just don't know the answer to. Furthermore, according to this article, the structure of the bonds will defer principle and interest payments.
So, yeah, it could work out in the end. But as structured, the financing scheme is complex, incomplete, and slightly bizarre. Characterizing it as sketchy seems pretty accurate to me.
-Basically, that means you've just given the one blog on the internet vociferously opposed to this deal some air time. (The other opposition you link to was about the baseball stadium and proved to be a moot point.) I've enjoyed some of your writing, but this just reeks of laziness.
You're certainly entitled to your opinion, but it's not like there haven't been other issues with getting the stadium deal done. I would argue that the baseball stadium mess is an integral part of the soccer stadium mess. Especially considering how Paulson was using the MLS team as leverage to extract money and/or land out of Beaverton. I'm also not going to pretend that I'm privy to all local Portland political machinations, but at the same time, it's pretty clear that the situation has left a bad taste in a lot of people's mouths.
As for "the one blog on the internet" comment, there's been opposition pieces from several other places, not including the heavy skepticism posed by FofS.
Re: the MLS approval, I haven't read through that Venue Design Guide, but I think it could be more interesting in terms of evaluating just what the league considers to be an acceptable soccer specific stadium, and comparing that across the board.
-FS
Oh, you snarky blogger. I used the word "vociferous" and you removed it to prove other people on the internet don't like the deal, including ten people in a Facebook group.
Perhaps there is a slight risk Portland taxpayers have to make up a deficit in the Spectator fund... in 25 years, and that any revenue generated to pay off the bonds, including interest, doesn't hit that target. It's not "incomplete", as you said. They'll go through with the bond based on the amount they need to make up from the credit account, but if they can pay a little off with cash at the time, they'll do so. It's not incredibly complex, either - get credit, open up a bond to pay for the credit, use the revenues from the stadium to pay the bond off without interest (until the bond needs to be paid off).
It may be slightly bizarre, though. Granted, it's a little different than the way the Union are getting $77 million from the state and county, and it's different than the tax increment financing I know the Wizards were looking for (if they don't already have). But these are taxpayer subsidies.
Finally, if you're using sketchy to mean "lacking in completeness, clearness or substance", the only variable left is how much money the city pays off in 2011 before taking out the bond. If you're using sketchy to mean "questionable" or "iffy", you certainly have the right to form an opinion the financing won't work out correctly. But if you're basing that opinion on one blog which really does not want the stadium deal to go through (apparently he's a baseball fan, as he wasn't opposed to building a MLB stadium) and a couple other articles by people who are against the stadium renovation and ignore all of the hard work the city council, the owners and the fans have done to try to make MLS in Portland an actual reality... well, that's just lazy. This wasn't sprung on the city council today, and the details have been in the works and out in the open for a long time now. There has been plenty of time to work out the problems. So my question to you is - if you're so worried about the "sketchy things" the city council is doing in an attempt to try to finance this thing to the best of their ability, have you denounced the Union's new stadium for being built with significantly more public tax dollars than Portland will contribute in the worst case scenario? How about Dick's Sporting Goods Park? BC Place?
-Oh, you snarky blogger. I used the word "vociferous" and you removed it to prove other people on the internet don't like the deal, including ten people in a Facebook group.
Because I felt your implication was that there was just this one guy who opposed the deal, and I wanted to illustrate that, no there were other people. It certainly looks like he's the most zealous.
It is pretty amusing that there's only 10 people in that facebook group, isn't it? I figured I'd throw it in for variety, though.
-If you're using sketchy to mean "questionable" or "iffy", you certainly have the right to form an opinion the financing won't work out correctly. But if you're basing that opinion on one blog which really does not want the stadium deal to go through (apparently he's a baseball fan, as he wasn't opposed to building a MLB stadium) and a couple other articles by people who are against the stadium renovation and ignore all of the hard work the city council, the owners and the fans have done to try to make MLS in Portland an actual reality... well, that's just lazy.
You think I should hail this deal as a triumph of public/private collaboration? I've been following the Portland saga for a while, probably closer than other MLS stadium ventures. Not out of any malicious intent, it's simply popped up in the news more often. And I've taken time to read beyond Bogdanski's blog to look at source information and read the papers. I'm not the expert on this issue by a long shot, but I feel reasonably secure that I made a decent effort to take a look at the issues before I posted.
-So my question to you is - if you're so worried about the "sketchy things" the city council is doing in an attempt to try to finance this thing to the best of their ability, have you denounced the Union's new stadium for being built with significantly more public tax dollars than Portland will contribute in the worst case scenario? How about Dick's Sporting Goods Park? BC Place?
To be honest, I haven't looked close enough at DSGP or Philly to draw any kind of conclusions. As for Vancouver, well, that's quite a different scenario. BC Place is run by a company owned by the government, and they've been trying to figure out ways to save the stadium after the roof fell in. So they're investing a ton of money, partly financed by bonds and selling off development rights in the area. The project is a *lot* more money, but the prime revenue beneficiary is owned by the government, so at least in theory it's working to maximize taxpayer revenue. Furthermore, there are other events and tenants involved.
As for the whitecaps themselves, they've wanted their own stadium on the water front, but that doesn't look like it's going to happen. Having personally laid eyes on the area they want to develop, my primary thought is "Good luck." Now if they can't get it done, what kind of home will BC Place be long term? Who knows, but I think it's safe to say that for the time being that has also been a bit of a clusterfuck.
While I haven't written on any of those projects, I did point out Kansas City also has a fucked up public financing scheme. I'm also on record as thinking it's pretty pathetic for Columbus to be begging for public hand outs over a decade after the Hunts built their own stadium. And in the same post I say I'm not generally a fan of the public subsidizing sport palaces for private corporations that keep all the revenues.
Anyway, if you're suggesting that I need to take a long, hard, comprehensive look at the public financing of MLS stadiums, that's probably not a bad idea.
-FS
The public financing of MLS Stadiums would be a pretty interesting article if well-researched. It'd certainly be an interesting economic take, especially when you look at other factors - for instance, economists don't seem to think there are any incentives to publicly financed stadiums. When Barcelona come to town, however, there have to be some economic benefits, especially because that stadium isn't full of just Seattleites.
As far as the triumph goes, it's only a triumph in the sense that Portland will have a decent if not good and unique soccer stadium without having to invest that much money into the deal. $12m is significant, but it's less money than the Whitecaps' temporary stadium is going to cost, for instance (though admittedly that's not accounting for what currency the Whitecaps' $14m figure is in).
But your post was pretty much all rehashing of a negative opinion on the stadium without any balance. I've been (obviously) following this as well; there's been a lot of negative things said about the PGE Park renovation plans. You've got the obligatory newspaper commentators, typically xenophobes who don't understand anything about soccer or its role in the Portland community. Then you have the independent journalists whose "journalism" is usually outspoken commentary against the Timbers, the renovation, Merritt Paulson and his family, et cetera. There were also a lot of people who probably don't disagree with bringing the Timbers here but who didn't want to see a baseball park where their apparently crappy park is now, and some architects who didn't want to see the old arena demolished. Oh, and the handful of baseball fans. That's been going on for over a year now, since Portland was I think the first to announce the MLS bid, and it's been in the news so much because of all these moving parts. The fact this deal got done at all is fairly impressive. A lot of work went into it.
Now, I ain't saying you can't post your opinion on a blog. But this post wasn't really your opinion in your words. You make a couple broad generalizations ("there's plenty of opposition to getting this deal done"? How is the word "plenty" even quantifiable?), but you mostly rehash what the other blogger guy is saying. The fact you say you've read other source, coupled with the fact your other blog posts show you at least have a normal amount of brain activity means you at least must be able to realize this guy would be against the deal if it cost the city nothing -and- Paulson gave every Portlander a free puppy. That's what rankles me. You don't have to like the deal, but you're primarily a soccer blogger. Based on what you previously commented and the fact your blog is fairly notable, you should be well-informed enough to come up with an opinion of your own. I still would have disagreed, but I wouldn't have got so worked up over it.
Apologies for my own snarkiness.
No, that's totally fair. Between your comment and Andrew's over on PI, I should probably do a followup post at this point.
Let me also say this:
1) Not every post here can be epic. It's just not going to happen. I follow things I think are interesting and not all of that even makes it into a post. So some things just won't get the deep cleansing action.
2) Not everything here is going to be totally objective. In fact, pretty much none of it is.
Now - as an outsider looking in, I'm still pretty disgusted at the sight of the sausage they're making down there. So that along with my general dislike of taxpayer subsidies and the apparent lack of finesse employed in resolving the political disputes surrounding the stadium led to the post you see here.
That being said, I appreciate your willingness to advocate the other side of this issue, and I'll do a followup post and further look into public financing schemes in MLS.
-FS
There's not much more to say here really, but I don't think I'd be alone in saying I don't care if your posts aren't epic and I don't care if your posts aren't objective as long as they're well written, and/or interesting, and/or make a good point. Readers know not every article is a Sunday feature story. Then again, in a few years, no article will be a Sunday feature story, but that's a Sunday feature story in and of itself.
That being said, your interest in public financing of stadiums, coupled with the fact MLS is dependent on soccer-specific/soccer-friendly stadiums to be profitable, if you do it well, would make for a great Sunday feature story, so I'm looking forward to it.
Fake Sigi,
Let this be a warning... you say Portland three times in one post and the Evil Dead (Timbers Army) will haunt your dreams.
One year before we have to deal with these cunts in league play. It's like knowing you're going to get the clap and do it anyway.
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