Isaac Laquedem

Just for fun, here's an alternate use for the City's stadium funds

I'm entranced by the economic arguments offered in favor of using public money to turn PGE Park into a soccer-only field and to build a new minor-league baseball park, so that Portland can move one notch up in the soccer world.  Let's suppose that our friends in local government really have, or can find, $76 million to $89 million to put into sports arenas.  (Apparently, ordinary bank financing isn't available for projects like this.) 

Another prominent Portland project can't get bank financing; it's Tom Moyer's Park Avenue West Tower on Morrison Street downtown, on which he halted construction when the market for permanent financing dried up.  Compare the economics of the City borrowing money to build two sports fields with what would result if it lent money for Mr. Moyer's project. 

City investment:  $76 million (current estimate) coming from City funds (see item 6 of this report from the Mayor's office).  $120 million (roughly) for the office tower loan.

City repayment:  For the sports field bonds, repayment comes from rents and ticket tax revenues from the sports fields, if the teams and the fans can afford to pay them.  The Paulson family will guarantee the sports team's payments to the Spectator Facilities Fund, which would issue bonds for about 40% of the City's cost.  The Mayor's report does not indicate that the Paulsons would guarantee the other 60% of the City's new bonds.  For Mr. Moyer's office building, repayment comes from refinancing the building in a few years when the credit markets return to normal.

City cash flow:  For the sports fields, the city would pay interest to the bondholders, which it hopes will be covered by rent payments and ticket taxes.  For the office building, the city would receive interest on the building mortgage.

Property taxes:  The sports fields would be owned by the public and would not pay property taxes.  The sports teams would pay property taxes on the personal property (equipment, etc.) used in the businesses.  If the sports teams have $5 million of equipment they would pay about $110,000/year in property taxes on the equipment.  The office building will likely be worth about $160 million when complete, will be on the tax rolls at about 70% of that, or $112 million (this is a result of Measure 5, not a special favor), and will pay about $2.5 million/year in property taxes.  It will also generate about $100,000/year for the Downtown Portland Clean and Safe fee and some money for the City/County business income tax.

Lag time before job creation:  The city can't start work on PGE Park until it has a final design, land use approvals (even the city needs land use approvals), and bond funds in hand.  It has to wait until the end of the current baseball season, so not much would happen there until September at the earliest.  For the replacement baseball field, the City has to overcome some land use obstacles (see the e-mail from Josh Cohen to the Mayor, quoted in this post by Professor Bogdanski), survive citizen opposition to tearing down Memorial Coliseum, and get a design approved  -- let's say 1 year at the earliest, longer if one of the groups of citizen opponents takes it to the Land Use Board of Appeals, which I think will happen.  By contrast, the office building was already under construction.  It has all of its land use approvals except one for removing the condominiums from the top, and Hoffman Construction could put people back to work in a week.  You can't get more shovel-ready than that.

Likelihood of financial success:  With respect to the sports fields, the Paulson family has financial strength, but sports is a rocky business, and the City hasn't finished paying for the last remodel of PGE Park.  The office building, by contrast, is 55% leased already, and Mr. Moyer's track record for repaying loans has been sound for decades.

Likelihood of cost overruns:  Because the PGE Park remodel and the baseball stadium haven't been designed yet, no one knows exactly what they will cost, but the City's track record on projects of this sort has been that they cost more than planned.  Someone -- I hope Mr. Paulson and not the City -- will have to pick up the almost-inevitable excess cost.  The office building investment is a loan.  Loans don't have cost overruns. 

I don't seriously expect the City to consider lending money for Mr. Moyer's building, but I think this comparison is an edifying prism through which to look at Mr. Paulson's sports proposal.

The Convention Center hotel already exists

It's called the Doubletree at Lloyd Center and it lies a few blocks east of the northeast corner of the convention center.  It's about 200 feet farther from the convention center than the distance from one end of the convention center to the other, and it's one stop away by light rail.

The cheap and easy way to build a convention center hotel is to proivde some financing to the Doubletree to upgrade the existing hotel as necessary to suit the demands of conventioneers, and to face the fact that to planners of national conventions, our city is less interesting and less accessible than Seattle is..

How to save Memorial Coliseum from minor league baseball

Petition the City Council to rename it after Cesar Chavez.

How I know that the City's projections for the Triple-A ballpark are wrong

The easy way to demonstrate that Portland will lose money on the proposed triple-A baseball stadium is that if it could be run at a profit, Gerding Edlen or Williams & Dame would be proposing to build and own it.

Where Saturday Market could fill a need

Only after the City started construction on Saturday Market's new home did it occur to me that the warren of shops and booths could easily fit into some of the empty space in the Convention Center, where it could operate in good weather and bad, and still be accessible by MAX in TriMet's fareless zone.

Portland makes it clear that Peterson's has to move

One way or another, the City of Portland will get Peterson's to move away from 9th and Morrison.  Having John Carroll tear the entire building down, however, seems like a clumsy and expensive way to get rid of one tenant.

A nickname for the new light rail line

Light rail systems attract cute names.  TriMet's original light rail, running from downtown Portland to central Gresham, was given the name MAX, short for Metropolitan Area eXpress.  (The name stuck, even though it served only a small portion of the metropolitan area, wasn't very fast, and would actually be MAE instead of MAX.)  No such cute name was found ten years later for the west side extension to Hillsboro, which was called simply West Side Light Rail.  (I proposed returning to acronymic accuracy and calling it MAE West, but TriMet doesn't share my sense of humor.)

The light rail that's soon to open on the transit mall (Fifth and Sixth Avenues), will need a nickname.  The southbound line will run past the Multnomah County Courthouse.  I suggest referring to riding that line as "taking the Fifth."

Planning for failure

Most of the intersections between W Burnside Street and NW Marshall Street, running from Broadway to NW 14th Avenue, prove that Portland's land use planning system failed. This is not unique to Portland; a drive along 185th Avenue in Aloha shows that Washington County wasn't much better.

The Laquedem Intrastate Bridge Replacement and Renaming Plan

If I'm correct that the spans of the Interstate Bridges are in decent shape and that it's the piers and supports that aren't braced against earthquakes, then when (if) the Interstate Bridges are replaced, Multnomah County should grab a few of the low spans from the state and barge them up the Willamette.  The county could then recycle the spans to replace the Sellwood Bridge, which may be a lot cheaper than building an entirely new bridge.  Though bridge spans don't compare with the fabled nine lives of cats, they do get re-used; if memory serves me rightly, the Vista Bridge replaced an older span that was moved south a few miles to serve for 60 years as the Terwilliger Bridge, and when the Terwilliger Bridge was replaced the old span was moved east of the Cascades, where it still serves traffic over some rugged canyon.

The Interstate Bridge could then become the Intrastate Bridge, an adjustment requiring a change of only two letters.  Or the bridge could be identified, in its new location, as the Cesar Chavez Bridge, thus simultaneously renaming and relocating a portion of historic Interstate Avenue without changing anyone's address.

A $147 million desire named Streetcar

Local proponents of streetcars are upset that the federal government wants to write the rules about funding transit projects to favor buses over streetcars.  So reports the Oregonian today.  The streetcar proponents don't want the rules written to favor efficient transit (as such), but to favor streetcars.  That at least is the sense I got from the article.

It reminds me of something one of my professors said many years ago.  He was teaching the introductory statistics course and was encouraging the students to continue with the next course.  "In elementary statistics," he said, "you choose a problem, you collect data, you pick a method, and you apply the method to the data to get an answer.  But in advanced statistics, you choose a problem, you collect data, you select your answer, and then you look for the method that when applied to the data will give you the answer you want.  That's much more fun."

The question I come back to, when thinking about the Portland Streetcar expansion (which is budgeted at $147 million), is whether there's a way to spend $147 million on faster transit for more people.  Having raced the streetcar from Jefferson Street to Glisan Street, and usually winning, I have to think there is.