This Week in the Mercury
Thursday, January 21, 2010
News / Politics City Reaches Big Soccer Deal With Paulson
Posted by Matt Davis on Thu, Jan 21, 2010 at 1:44 PM
Council will vote on the deal next week. Download details of the agreement here. And here's the mayor's statement:
Dear Portlanders,
The City today reached a final agreement with Peregrine, LLC to bring a Major League Soccer (MLS) franchise to Portland and renovate PGE Park. This effort will bring immediate construction jobs to Portland and continuing revenue, visitors and vital spending to Portland’s central city in the long term.I’m confident that this agreement will serve Portlanders now and for years to come. We will put construction workers back to work right away, and in the long-term, MLS represents a smart investment in Portland’s future success. Building on the Northwest’s long-standing soccer heritage, we can bring Portlanders together around another great sports team.
The public-private partnership exemplifies the City’s commitment to supporting entrepreneurship in the business community, while better shielding its residents from financial risk. The City Council worked to ensure the terms are aligned with Portland’s values and that Portlanders would be solidly protected from any downside risk:· No impact to the City’s General Fund
· No impact to the City’s ability to provide basic services
· No Urban Renewal fundingThe City’s contribution to the multi-use, LEED Silver certified stadium will be financed primarily through private investment by the Paulsons and by revenues from sports spectators, as recommended by the Major League Soccer Task Force. The City’s liability is limited through numerous personal guarantees from the Paulson family, which ensure that the City will receive projected revenue even if the new MLS franchise or the league fails. Specifically, the Paulsons have made personal guarantees of operating revenue for 25 years and that the team will stay in the city for at least 25 years.
The newly renovated stadium will also be used by Portland State University’s football program and the general public for community events. Additionally, Paulson has pledged an annual contribution to the Portland Parks Foundation to improve community soccer fields as part of his commitment to the public. The $31 million deal goes to City Council for approval on January 27. I am eager to build the public-private partnership and will continue to work with Paulson to find a new home for AAA baseball.
Sincerely,
Sam Adams
Mayor of Portland
Updates coming.
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There is a small risk with the $11 million from the spectator facility fund, but technically even that is backed up by the personal guarantee, which I'm assuming is built into the contract. So no...there is no risk for the city.
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And @ Reymont: the City is forgoing some spectator ticket taxes and future rent payments, so yes, there is definitely a public ingredient to this private-public deal, but the majority of the money and risk falls on Paulson, and none of the public portion comes from the general fund or sources that could be used for anything beyond just the spectator fund, so bottom line, if you never attend a single game you won't pay a dime for this deal.
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To clarify, if this is like the old proposed deal, the guarantee was to pay the rent on the facility for 25 years, NOT to guarantee contributions to the spectator fund. However, most of that will come from the Blazers, not soccer.
So when Jack Acid says "if you never attend a single game you won't pay a dime for this deal" it's not totally accurate. You could attend a Blazer game and pay towards the soccer deal.
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