This article, and others appeared in last week's print edition of the Business Journal of Portland



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Baseball backers get dugout-level seat at City Hall

By Andy Giegerich
Business Journal staff writer

The Oregon Stadium Campaign, the group working to secure a big league baseball franchise for Portland, is taking things up a notch.

David Kahn, the group's leader, plans to occupy an office at Portland City Hall, a move that signifies Mayor Vera Katz's commitment to attracting a major league team, according to her staffers. From his new vantage point, Kahn will continue to develop a stadium financing plan and offer insight on stadium construction issues.

"This demonstrates the seriousness of this effort as we hit the final months" of seeking a team, said Kahn. "I think I'm more effective being there next door to the mayor."

Kahn, though, will not join the city payroll. He remains a special assistant to Indiana Pacers President Donnie Walsh. Kahn was instrumental in the development of Indianapolis' Conseco Fieldhouse, heralded as one of the National Basketball Association's top arenas.

Kahn's new City Hall presence comes as the stadium campaign prepares a final version of a $350 million stadium financing plan. The group hopes to complete a financing package plan by early summer and then present it to Major League Baseball officials by the July 13 All-Star Game, said Drew Mahalic, chief executive officer of the Oregon Sports Authority.

The new package will revise proposed funding mechanisms the group presented last year to Major League Baseball's relocation committee.

Much of the plan remains the same: The bulk would come via contributions from a Portland team owner, through a state Senate approved plan that would use portions of players' and team employees' state income tax to pay off bonds, and from various stadium-related taxes.

The campaign is currently tweaking one proposal component that originally called for $54 million from increased hotel and motel taxes, as well as boosted auto rental taxes.

Kahn wouldn't give specifics on the revamped hotel/motel tax plan, but indicated that a room tax boost isn't likely.

"We've talked to some of the industry leaders, and I think it's clear that it's something they'd rather not bite off right now, and I understand that," Kahn said.

Kahn described the financing plan as "80 percent there. We're in the final stages. But the last 20 percent is always the most difficult."

The campaign has also fielded several inquiries from prospective local investors who, said Kahn, could become minority team owners.

Katz, said spokesman Scott Farris, believes the campaign is "rounding second," in baseball vernacular. Katz supports financing the stadium without any general-fund revenues from the city.

"We want new sources from commercial aspects that would benefit from the development of a stadium, as well as a component from private dollars," he said. "Certainly, we're not talking about taking money from streets or the fire department or parks."

Whereas efforts to attract a big-league baseball team to Portland date back some 10 years, the campaign hit overdrive three years ago when Major League Baseball, which had bought the struggling Montreal Expos, announced plans to sell and relocate the team. In December 2002, the league confirmed that Portland, Washington, D.C., and Northern Virginia were the front-running relocation candidates.

The Oregon Stadium Campaign had by then emerged to assume stewardship of the big league baseball drive. The group combined the Oregon Sports Authority, which seeks to lure big-ticket sporting events to the state, with the Portland Baseball Group and the Oregon Baseball Campaign.

Portland's efforts drew strong support from city officials. Katz has repeatedly stated that she wants a completed big league plan before she leaves office on Jan. 1.

City workers are refining a site evaluation study that will determine where a $350 million-plus stadium will sit (see Page 2).

More than 600 businesses have indicated their support for baseball in Portland, according to the campaign's Web site.

Contact Andy Giegerich at agiegerich@bizjournals.com.

Read the entire article here on The Business Journal of Portland website.

Looking for a big hit
Economic viability questions don't faze stadium supporters
By Andy Giegerich
Business Journal staff writer

Over the last 15 years, 18 new major league baseball stadiums have sprouted across the game's landscape.

But whereas cities typically pitched the facilities as guaranteed purveyors of economic growth, experts now say such progress isn't a given. New stadiums -- and, as would be the case in Portland, new teams -- don't necessarily enhance a state's or city's coffers, some observers now contend.

"Baseball proponents like to say it's good for the economy as a way to convince local citizenry or politicians to support it," said Andrew Zimbalist, a professor and sports economist at Smith College, in Northampton, Mass.

"But you generally can't expect any economic impact from a new stadium. The best reason to support it is because it's great for a city culturally."

While Portland baseball boosters respect the argument -- the Oregon Stadium Campaign places fan passion higher on its "pro" list than economic impact -- it nonetheless removes a weapon from supporters of Major League Baseball.

Consider that Oregon suffers from one of the nation's highest unemployment rates and an economy wallowing in recession.

If baseball can't provide a guaranteed economic panacea, it could harm local support in the efforts to attract a team.

"You don't build a stadium for economic return," said Tim Chapin, a Florida State University assistant professor of urban and regional planning. "We've learned a lot in 10 years. What we used to think is true, we know now is not."

Chapin and other observers say the "transfer" effect eradicates potential stadium- and team-related economic growth. That is, new teams and stadiums tend to extract money from other entertainment options.

"Yes, you can get money from a new team or stadium, but it comes at the expense of other leisure opportunities," said Doug Pappas, who heads the Society of Baseball Research's business committee.

"Portland has a stronger case than most places because it'll bring new business to the community, but the 2 million people who come to the games will come at the expense of Portland's movie theaters and other things."

Drew Mahalic, chief executive officer of the Oregon Sports Authority, fires back that a Portland baseball team would draw an untapped market.

"In Portland, I'd go as far to say we have people who are couch potatoes who all of a sudden have something to do," Mahalic said. "It won't be a transfer as much as it'll be people spending who didn't spend before."

Mahalic added that most naysaying sports economists fail to consider Portland's situation.

"We're talking about a brand new franchise here, as opposed to studies that looked at existing franchises," Mahalic said. "It's unquestionable that new jobs will be created, and that a fair percentage, between 10 and 20 percent, of the fans will come from out of state."

That said, Mahalic projects in the team's first year, Oregon's economy could grow by between $10 million and $20 million. That's about half the yearly amount projected by baseball supporters in Northern Virginia, which, along with Washington, D.C., and three other areas, is competing with Portland for the orphaned Montreal Expos.

Civic pride
David Kahn, who heads the pro-baseball Oregon Stadium Campaign, regularly downplays such projections.

"We're keeping the economic arguments modest," Kahn said. "But modest though they may be, I think they're compelling."

Such arguments include:

• The Portland Trail Blazers say Washington state residents comprise 15 percent of its attendance. Prorated to baseball's 81-game home schedule, the number translates to 365,000, based on an average attendance of 30,000 for each Portland game.
  
• One recent stadium campaign estimate projected that the construction would create 1,500 jobs. Kahn estimates it would further bring 1,400 part-time workers to ballpark jobs, such as vendors and security guards.
  
• Oregon would receive national media exposure during the summer months, "when we're at our best," said Kahn, thereby clueing in potential tourists as to the state's charm.

Still, the success depends on many other factors. For instance, the Portland team, quite simply, must play either a winning or interesting brand of baseball, lest it suffer the same fate as small market teams in Pittsburgh and Milwaukee.

In 2001, when both cities opened new parks, the Milwaukee Brewers' attendance rose by 78 percent while the Pittsburgh Pirates' rose by 28 percent. Both teams have since reverted to their pre-2001 levels, mainly because they field rosters teeming with unproven players and castoffs.

It's thus little wonder many cities fail to research the economic impact resulting from their completed stadiums.

Explained Chapin, "A team that wants you to build a ballpark will only tell you about the good things that'll happen. But they don't want to find out what actually happened."

But prospective studies, said John Crompton, a Texas A&M distinguished professor of recreation park and tourism sciences, often report outrageous estimates because they're most often commissioned by pro-stadium forces.


"My rule of thumb is to take what they project as an impact, move the decimal point one spot to the left and divide by half," he said.

Officials in only one of several cities contacted by The Business Journal said they conducted economic impact studies after their new stadiums opened. That study, conducted by the Downtown Phoenix Partnership a month before the team's first season ended in 1998, examined only the impact generated by the stadium's construction.

Anecdotally, officials in Cleveland and Pittsburgh economic development departments said their stadiums have spurred more real estate development largely because they occupy areas previously beset by high vacancy rates.

Milwaukee's Miller Park hasn't inspired much economic development because it sits five miles from downtown, said Bret Mayborne, the city's economic research director.

"The uniqueness of the site makes it difficult to point to anything new being directly attributable to it," he said. "A lot of people wanted it downtown, but this site was a strong Brewer preference."

Then there's Seattle's Safeco Field and Seahawks Stadium, which Chapin and Karin Zuagg, communications director for Seattle's Office of Economic Development, say sparked redevelopment of the city's formerly decaying south downtown.

"They've spent a billion dollars on feeling better about themselves and having great facilities to see sports teams," Chapin said.

Which, said Bob Bluthardt, Society of Baseball Research's Ballparks Committee chairman, is why cities should build new stadiums and seek teams in the first place.

"It'd be refreshing to hear a city official say, 'We're not here to make a dime, but boy, this stadium would be great for civic spirit,'" said Bluthardt.

Contact Andy Giegerich at agiegerich@bizjournals.com.

Read the entire article here on The Business Journal of Portland website.

Officials bat around results of site-seeing mission

By Andy Giegerich
Business Journal staff writer

As efforts to finance a big league stadium in Portland inch along, many Rose City baseball watchers have half an eye on a key upcoming issue: Where, exactly, would such a stadium sit?

"It will clearly have a big impact, wherever it goes, and the development around it will probably boom in both retail and housing," said Mark Edlen, whose Gerding/Edlen Development Co. produced such projects as the Brewery Blocks in the city's Pearl District.

Added Dave Logsdon, the city of Portland's spectator facilities manager, "It'll definitely bring a whole change to the Portland scene."

The city, though, has put its ongoing site exploration on hold until stadium backers complete a financing proposal for the $350 million-plus edifice.

The financing plan is about 80 percent complete, but the group has secured only about $100 million so far.

Mayor Vera Katz will focus on the site analyses once stadium backers identify more potential funding sources, said Scott Farris, the mayor's spokesman.

In the meantime, Logsdon and a team of city planners and number crunchers will expand on an analysis unveiled a year ago that ranked the viability of seven sites.

The 2003 analysis, on which the city worked with stadium architectural firm HOK Group, of Kansas City, Mo., studied such factors as whether the site offers good urban design possibilities, how many local properties can be developed around it and whether it offers adequate transportation possibilities.

The city-HOK team further studied the ease with which the site is developable, the site's cost and the timing in which a stadium can be built.

The early favorite, based on rankings in the analysis, is on the west side Broadway Bridge-area land owned by the U.S. Postal Service. The property, at Northwest Hoyt Street and Broadway, is home to the post office's Portland headquarters.

Postal officials estimated last summer, though, that it would cost them between $150 million and $200 million to relocate.

"We'll look into more detail regarding the surrounding neighborhoods, land acquisition, business acquisition and demolition costs," Logsdon said.

As such, they'll also likely revamp last year's site rankings, tallied on a scale of 1 to 7, and ranked on how well each site compared with the others.

From top to bottom, here's how they scored based on a 42-point scale:

• Post office -- 33 points: The site scored 7s, the highest ratings, in urban design, local development opportunities (because it's in the Pearl District) and transportation.
  
• Burnside/405 -- 26 points: Possibly the oddest proposed site, the stadium would sit on a massive platform-like structure built above Interstate 405, at West Burnside Street between Northwest 14th and 17th avenues. The site scored a 7 in the cost category. "It's a less costly option in terms of siting and land acquisition because we'd be using 'air rights,'" Logsdon said. "That is, the land would be in the air, because it's above I-405."
  
• Union Station -- 25 points: Site factors -- the stadium would need to wedge into the River District rail yards -- and the likely lengthy construction time frame elicited 1s in the city's initial ratings.
  
• Lents -- 24 points: A 105-acre plot near Interstate 205 and Southeast Foster Road, Lents scored 7s in the site factors and timing categories because it's vacant and massive enough to accommodate thousands of parked cars. It scored a lowly 1 on urban design because it sits about seven miles from downtown.
  
• PGE Park -- 24 points: The site scored well in the site factors section largely because it's already configured for baseball. The conversion to a bigger league park might not be easy because the property doesn't hold much expandable space.
  
• Lincoln High School -- 23 points: Lincoln, near PGE Park, suffers mainly from cost issues (the analysis' lowest rating; it's expensive to buy and relocate the entire high school) and the lack of local development opportunities.
  
• Blanchard/Rose Quarter -- 15 points: The early favored choice of Katz and Portland Planning Director Gil Kelley didn't fare well when compared with the other sites. The site tallied a 1 in the local development realm and 2s in urban design and cost.

Of all the potential stadium sites, Edlen said he's most interested in the post office lot, mainly because of its Pearl District locale.

Contact Andy Giegerich at agiegerich@bizjournals.com.