This article is from the 01/27/03 Washington Post

Portland Prepares A Pitch for Baseball


David Kahn, a former NBA general manager, leads effort
to relocate Montreal Expos to Portland, Ore., in 2004.
Groups from District, N.Va. also eye team.

By Steve Fainaru
Washington Post Staff Writer

PORTLAND, Ore. -- The faint outlines of a Major League Baseball team are beginning to appear in the Great Northwest. There are sketches of a 40,000-seat stadium, the beginnings of a $350 million financing plan and prospective sites featuring grandstand views of Mount Hood.

In the three decades since baseball was last played in Washington D.C., the sport has awarded franchises to seven other cities. And now, as baseball proponents in the District and Northern Virginia attempt to seize what may be their best opportunity to return baseball to the nation's capital, yet another suitor, Portland, has emerged as the main alternative if baseball bypasses the Washington area once again.

Delegations from the District and Portland -- including D.C. Mayor Anthony A. Williams and Portland Mayor Vera Katz -- are scheduled to meet separately today in New York with members of MLB's relocation committee. The meetings are the first official step in baseball's plan to relocate the Montreal Expos as early as 2004. A six-member delegation from Northern Virginia that will include state attorney general Jerry W. Kilgore is scheduled to meet with the committee Wednesday.

Baseball has solicited bids from several other cities, but "my understanding is that [metropolitan] Washington and Portland are 1 and 1A," said Stephen Kanter, a law professor at Lewis & Clark College, who has been heavily involved in the Portland baseball campaign.

In many ways, Portland fits the demographic of other markets -- Seattle, Denver, Phoenix, to name three -- that have leapfrogged Washington in recent years and obtained teams. With a population of 1.95 million, the city is the seventh-fastest growing metropolitan area in the country. The Sports Business Journal this month named Portland the nation's third-most appealing market for a new professional sports franchise -- Washington was eighth -- after Los Angeles and Philadelphia.

For 33 years, one professional team -- the National Basketball Association's Trail Blazers -- has monopolized Portland's sports consciousness. "This is the most underserved market for professional sports in the country," said David Kahn, the former general manager of the NBA's Indiana Pacers who is leading the Portland baseball campaign.

However, Portland's nascent bid faces several obstacles that raise serious questions about its viability, interviews with government officials, business leaders and others involved in the process suggest. In particular, baseball's proponents hope to raise $350 million to $450 million for a new stadium -- the cornerstone of any relocation effort -- in the middle of a financial crisis that already is forcing citizens to choose between draconian budget cuts and new state taxes, which will be voted on in a referendum that comes before Oregon voters today.

In many ways, the timing of baseball's bidding process couldn't be worse for Portland. The state unemployment rate, 7 percent, is among the highest in the nation. The city's spring high school sports schedule was recently saved only through private donations, and state and local governments are considering other drastic cuts on everything from medical benefits to the school calendar.

"What kind of message does this send: 'We can't invest in these other services but we can invest in Major League Baseball'? Give me a break," said Lenn L. Hannon, a Republican state senator.

Hannon, who almost single-handedly killed a bill last year that would have financed a new stadium in Portland, said in an interview that he is looking forward to repeating the performance during the current legislative session.

"As far as I know I'm standing on the air hose," Hannon said. "No, make that jumping up and down on the air hose."

Baseball proponents say they can build the stadium through a variety of financing methods that will not involve new taxes, and that baseball will enhance the Oregon economy. But they acknowledge the effort is likely to be hampered by skepticism over a failed deal in which the city, after raising $33 million to renovate a downtown stadium for a new minor league franchise, is bailing out the team two years later.

No ownership group interested in bringing the Expos to Portland has stepped forward so far (three have emerged in metropolitan Washington). Randy Vataha, president of Game Plan LLC, a consulting firm hired by Portland baseball proponents, said he has been in contact with several potential owners and predicted "people will be lining up" once the city gains financing for a new stadium.

Moreover, Portland faces a possible territory dispute from the Seattle Mariners, who play about 160 miles north up Interstate 5. Rebecca Hale, the Mariners' director of public information, said the team has "not taken any position one way or another" on the possibility of a Portland franchise. But she said the Mariners control broadcasting rights not only in Washington but also in Oregon, Idaho, Montana and Alaska.

"We consider [Oregon] to be our territory," said Hale -- a position disputed by Kahn, the leader of the Portland bid.

Baltimore Orioles owner Peter G. Angelos has made a similar claim as the Mariners' about the Washington area, but it hasn't stopped Williams and the region's baseball boosters from pushing ahead on a bid for a team. Williams last week declared the effort to be "one of the highest priorities for our city, if not the highest priority" for economic development, but he said today's meeting was just a first step. "It is in large part a let's-get-acquainted session," the mayor said.

Williams is leading a delegation today that includes D.C. Council Chairman Linda W. Cropp, Deputy Mayor for Planning and Economic Development Eric W. Price and Price's economic development deputy, Stephen M. Green. From the D.C. Sports & Entertainment Commission, Chairman John L. Richardson and President Robert D. Goldwater are making the trip.

These D.C. officials and others are in the process of picking a final stadium site out of five proposed by a team of consultants in November, and they also are seeking to put together a public-private deal that would involve as much as $300 million of government funding for a stadium the consultants said will cost $430 million or more.

Williams and council members have said nearly all of the public funding would come from revenue, such as taxes on tickets or parking, generated at or near a stadium. But they have not shown how that can be accomplished.

Brian Hannigan, a spokesman for the Virginia Baseball Stadium Authority, said the Northern Virginia group was likely to share "a good deal of information" about prospective stadium sites and financing at its meeting with baseball officials. Unlike the District and Portland, which have discussed potential sites publicly, Northern Virginia so far has resisted releasing information about potential stadium sites partly out of concern of generating public opposition while site studies are being conducted.

Besides Kilgore, the delegation includes secretary of commerce and trade Michael J. Schewel; Michael R. Frey, chairman of the Virginia Baseball Stadium Authority; Stadium Authority executive director Gabe Paul Jr.; Jim Dyke, an advisor to Gov. Mark Warner; and Mitchell Ziets, a stadium financing consultant to the authority.

In its invitation to this week's meetings, baseball informed the jurisdictions that it did not want to meet with potential buyers of the Expos at this time. MLB took control of the financially strapped franchise last year. Baseball appears intent on choosing a new home for the Expos before selling the team. Officials said they would like to make an announcement by July.

Portland's boosters are pushing forward under the assumption that even if Washington gets the Expos, baseball is preparing to relocate at least one other franchise, possibly the Oakland Athletics or the Florida Marlins, in the near future. "We're looking at the big picture," Kanter said.

Working with HOK Sport, the Kansas City-based architects who designed Oriole Park at Camden Yards, baseball's proponents have come up with five prospective stadium sites; nearly all feature views of Portland's charming downtown and Mount Hood, the 11,235-foot dormant volcano that rises to the east of the city. But the future of the stadium -- and thus Portland baseball -- hinges on the Oregon legislature passing a financing bill that would use state income taxes on team salaries to service revenue bonds that would be issued to build the stadium. Baseball's boosters said the plan makes the stadium self-financing.

With the Oregon economy on the ropes, the bill is expected to face especially critical scrutiny. The bill's proponents said it contains provisions so taxpayers will not pay for any shortfalls. But it is unclear whether the plan takes into account a dramatic decrease in players' salaries, as seems to be occurring this winter. It is also unclear what happens if other states pass tax laws preventing visiting ballplayers from being taxed in Oregon.

Without approval of the stadium bill, said Kahn, Major League Baseball in Portland is "dead on arrival."

However, even with the bill Portland will have to come up with hundreds of million of dollars more, an especially difficult task in a state with no sales tax. The cost of the new stadium originally was estimated at $350 million, but many observers believe that any Portland stadium plan will require a retractable roof, which would add another $100 million to the project.

It is unknown where the additional money -- another $300 million even with state financing -- will come from. Over the past few weeks city officials have been exploring financing options but have not made them public. Among the plans believed to be under consideration are an increase in property taxes on buildings whose value would increase as a result of the new stadium.

For some, the plan already echoes the effort, launched in 1997, to resurrect the Class AAA Portland Beavers.

The ill-fated deal began as an attempt to bring a major league team to Portland but then focused on overhauling the city's antiquated minor league baseball stadium and purchasing a Class AAA team to play in it in hope of replicating success stories seen in mid-sized cities such as Sacramento, Calif., and Memphis, where new stadiums have drawn huge crowds.

The two organizers, Marshall Glickman and Mark Gardiner, a former director of finance for the city, organized 14 prominent investors under a limited partnership called Portland Family Entertainment (PFE). The city agreed to issue $33 million in new debt to renovate the stadium, raising hotel and car-rental taxes to partially cover the interest. Branch Rickey III, president of the Pacific Coast League, which also signed off on the deal, said the PCL was swayed by the success of new stadiums throughout the league and the "impeccable" backgrounds of Glickman, Gardiner and the investors.

In their first season , the Beavers lost $8 million.

Proponents of major league baseball have sought to distance themselves from the minor league problems. Kahn, who sits on the city's "PFE Turnaround Committee," described the two issues as unrelated. PFE's financial difficulties were caused entirely by mismanagement, he said, noting that the Beavers have actually drawn well, averaging 6,779 fans last year.

Dwight Jaynes, who moderates a nightly sports talk show, agreed. But he said it's been difficult to convince people that the minor league deal does not reflect on the viability of major league baseball in Portland. "I can't get anybody to understand that the team wasn't a failure, the deal was a failure," he said.

Glickman, who along with Gardiner was bought out by other investors, said the failure of the minor league deal stemmed from a variety of factors that caused expenses to spiral out of control. "It shouldn't have any impact on the major league situation, but the mere fact that people brought it up tells you it left an impression on people's minds."

"The worst thing these guys can do is sell baseball on a certain set of assumptions and then those assumptions turn out to be way off," Glickman said. "If that happens then I think people will bury them."

Staff writers Mark Asher and Craig Timberg and researcher Margot Williams in Washington contributed to this report.

© 2003 The Washington Post Company