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PGE Park deal sweeter for city

Wednesday, November 30, 2005
ANNA GRIFFIN

After two years of uncertainty, the city of Portland has reached an agreement that will keep the owners of the Portland Beavers running PGE Park through at least 2010.

The new ballpark contract guarantees the city will receive at least $935,000 in revenue from the stadium next year, a figure that will increase to at least $1.3 million by the last year of the contract.

In exchange, the Beavers will handle day-to-day operations of the ballpark. The Pacific Coast League has overseen the Triple A ballclub since 2004. But the minor league is working to sell to an independent buyer, and the new operating agreement will carry over no matter who winds up controlling the baseball team and the Portland Timbers professional soccer club.

"Relative to most Triple A cities, this would have to be viewed as a very good deal for the city," said Dave Logsdon, who manages the city's spectator facilities. "We had a pretty clear goal going into negotiations, and we think we've accomplished that."

The City Council will take public comment on the new deal today and vote Dec. 7.

The contract, though not generating enough revenue to cover annual debt from the 2001 stadium remodeling, does bring some long-sought stability to the ballpark's finances.

Problems have dogged the city's minor league franchise and its home park since the old Civic Stadium got its major facelift four years ago. Portland Family Entertainment, the company established to run the ballclubs and new-and-improved stadium, expected to make nearly $3 million a year. At the time, city leaders talked about taking a 10 percent cut of ticket revenues and charging close to $1 million in rent.

But the predicted profits failed to materialize because of higher-than-expected startup costs and lower-than-anticipated interest in minor league baseball. In early 2004, an Ohio company was set to buy the teams and run the ballpark, but its owners pulled out at the last minute.

Since then, the team's management has been in flux, and the city has relied on one-year operating deals. In this year's contract, the city received a 6 percent cut of ticket revenues and $500,000 in rent.

The new deal does better than that. Among other details:

The city will get a 6 percent cut for each regular-season ticket sold to Beavers and Timbers games, and is guaranteed a minimum of $175,000 in 2006. If the Beavers, who drew some 360,000 fans this past season, do big numbers at the box office, Portland gets more: For example, if the Beavers sell more than 398,750 tickets in 2006, Portland receives 25 cents from each additional ticket sold.

The team will pay a license fee, essentially a flat rental rate, that starts at $700,000 in 2006 and increases annually, topping off at $850,000 in 2010.

Because of financial problems that have plagued team owners of the past few years, Portland is owed $800,000 in back rent. The team will pay that off in annual installments.

When the contract expires at the end of 2010, team owners can extend it for another two years. If they do, the city must receive rent totaling $1.8 million for the two seasons and ticket proceeds worth at least $405,000.

The ballpark still won't pay for itself under the new agreement. Portland sold $38.5 million in bonds to pay for the stadium renovations and owes $33 million. The city pays about $3 million back each year, so operating revenues from the park cover about a third of the debt. The bulk of the money comes from Multnomah County's hotel and rental car taxes.

Anna Griffin: 503-294-5988; annagriffin@news.oregonian.com

Us Timbers Army folk were really digging into this discussion (word has been out elsewhere since Sunday night) before the thread self-destructed right in front of me (software issues).

The questions I'd like to have answered... is the city intent on taking increased proceeds and paying off TIAA-CREF? Is the main creditor involved in this deal?