Hi Matt...I love that you're on the Jack Bogdoucheski mailing list and all...but..

The $36 million figure were in the March 11th city council documents. The $18 million was the figure for the baseball stadium. The NY Post article you cite that you pilfered from your Jack Bog feed says it's only for a baseball stadium when in fact the $36 million figure is for both the baseball and soccer stadiums. If you read the e-mail that Bogdoucheski cites for the $18.5 million figure it specifically says its for the baseball stadium.

So this really isn't something new. The figure was always $36 million for two stadiums and has not doubled.

Thanks and come again.

Wow, is writing your profession Matt? I realize you have a chub for harpooning the MSL deal but try to bring at least as much research to the table as my 3rd grade daughter would in completing her current english project.

Ducks Basketball 2010 - CATCH IT LIVE!

To echo Garrett,

The total bonds being used are expected to be just shy of $50 million. Some of those bonds are traditional bonds off of the spectator fund (about $14 million) and the remaining are expected to be zero-coupon bonds off of the spectator fund (about $18 million) and my understanding is the rest is URD funds from the convention center URD district. These details were ALL discussed at the city council meeting and vote on March 11. I suppose it's possible that I'm misinterpreting the facts and the bonds have now doubled, but that's not what the Post is reporting and that's not how I interpret the numbers.

Another interesting read on stadium financing can be found here http://mattdavisopenshismouth.com/2008/11/…

To clarify my point - the convention center URD bonds were always listed as zero-coupon bonds. So that amount combined with the portion of zero-coupon bonds from the spectator fund totals the $36 million. It's really a matter of what question is being answered. A tightly worded question or closed-end question gets an incomplete answer.

As far as I can ascertain, the total expected bonds needed has not changed.

not convinced,

I have a feeling that if Kate Beckinsale called you up and asked you out on a Saturday with the promise that things would get interesting back at her place you would remain unconvinced because you would be fretting over the potential cost of dinner. In other words you are the classic Portland NIMBY, fearful and unwilling to take any risk whatsoever (this risk negated by Paulson's backing of the city bonds). We are getting two stadiums for 65 million and Paulson IS covering the project cost overruns after the first 2 million. I know it is difficult for you to see the big picture but just trrrrrry. The city will own both stadiums outright and the benefit will enjoyed for lifetimes.
Okay you can go back to worrying about potholes now.

not convinced, try this new little website, super neat! www.google.com

Amusing that Matt is dragging out numbers from the NY Post and acting as if those same exact numbers weren't the numbers always used in the task force and city council discussions. Maybe if he had, ya know, been a reporter and attended one of the public meetings or read the reports. Even more amusing is that Bogdanski jumped on this non-issue, too, so like the good puppy dog apprentice he is, Matt follows along. Journalism at its finest.

Got your Ducks basketball season tickets yet, Matt?

I'm happy to explain what I can.

$65 million is an accurate accounting of the public finance instruments, so we'll use that number. One MAJOR correction is that cost overruns beyond the first $2.5 million are paid for by Paulson and his backers, not by the city. This is a real collective incentive to keep costs realistic and avoid overruns.

Private investment in the public construction costs of the facilities is about $24 million. Public facilities that Paulson will then rent and pay the city. Can you imagine paying your landlord for the improvements to your apartment so you could then pay your landlord higher rent?

About $32 million of the $65 million in financing are bonds off of the spectator fund. These bonds, whether zero-coupon or otherwise, are paid back using revenue generated by the facilities themselves (ticket tax, parking, rent). Of this $32 million, $14 million are allowed as traditional bonds the rest are expected to be zero-coupon bonds. This is not a choice between traditional bonds and zero-coupon bonds. This is based on economic calculations about allowable debt capacaties, current debt capacaties and repayment amounts. There is ample repayment revenue streams of all spectator bonds based on the conserative attendance estimates. So the fans themselves are paying for this portion of stadium cost. If somehow these repayments fall short, the Paulson family is personally guaranteeing the repayment. My understanding is they will renew an annual letter of credit to cover any shortfall for the expected repayment period of 25 years. I imagine this is how cost overruns are also being guaranteed, a letter of credit. The spectator fund itself maintains the publicly owned spectator properties. The fund itself has a $6 million dollar balance. It's has made money over it's life. Traditional bonds are probably a 5% rate for 25 years. Zero-coupon bonds might be as high as 9% but they are paid at maturity. Sold publicly to other entities (insurance companies, banks, private holders, retirement funds, pensions) traditional bonds are safe solid investments. Zero-coupon bonds are nice investments too, but they require a great tolerance of the investor to be without a repayment for 25 years. Repayment on the traditional portion of the bonds would be under $1 million a year for 25 years. The zero-coupon bonds would need to generate about $1.8 million a year to cover their portion of costs for a 25 year period then they pay a lump sum to the investor. A total of $2.8 million a year. Again, this is from ticket tax, rent, parking and other stadium revenue streams. Expected rent on the two stadiums is about $1.8 million on it's own. Ticket tax on the MLS stadium events is about $700,000. $300,000 in ticket tax and parking is a low estimate of what baseball will provide. This has a very good chance of building up the spectator coffers.

18.5 million in existing URD capacity from the convention center district is estimated to be used for part of the remaining $33 million in financing. These are zero-coupon bonds already. Again, no choice in the matter if this is the revenue stream used. This money is paid back using increases in the property taxes within the entire URD district. Mostly this comes from new commercial and residential property construction that is spurred by the large investement of the URDs. There is a reasonable policy argument against this, but URDs have been used to revitalize massive portions of Portland and they have produced great gains for the city, county and state. The argument in favor is that revitalization produces a massive benefit beyond the stndard development with new construction, job creation, income tax, usage taxes, permitting, etc. In other words, URDs work at generating revenue for city, county and state. The tax revenues within the district would need to set aside about $2 million a year of the new property tax revenue to cover the bonds.

The remaining $15 million is the mystery money. There is not a single specific source mentioned at this time.

So, while we are using publicly financed debt, the burden to the general taxpayer is minimal. You go to the games and you pay usage. You take advantage of the economic development in the area, you pay your property taxes to the bonds for the repayment period.. If you choose to never set foot in one of the arenas your actual out-of-pocket burden is limited only to the existing tax streams that you pay if you live or already own a business in the URD district. Property tax increase themselves are regulated by Measure 5.

So, the real key to understanding this is to understand how the debt gets paid back. Just seeing it as $65 million in public money is reactionary and short-sighted. If you view it as I do, it's growth that otherwise would not exist. The city is contributing it's AAA credit rating to this. Investing publicly in city-owned assets. Assets that can actually generate revenue and add to livability.

I expect my city to wisely invest in its properties. Here you have an offer of private investment of $24 million into city owned facilities and you think we should turn it down? We should explore it and guage the risk and reward. IMO it's worth doing.

I think by "things would get interesting back at her place" Bradley was implying sexual congress, i.e., penile-vaginal intercourse, punctuated by mutual oral and/or manual stimulation of the genitals. Also kissing on the mouth.

Andover/Exeter:

There are NO USL2 teams on the west coast. The nearest USL2 team to Portland is in Pittsburgh, PA.

There are dozens of PDL teams on the west coast. It is a developmental league not much different in quality from a top-flight parks-and-recreation league. Most of the players are unpaid. And there is virtually no game day revenue to be had.

"One MAJOR correction is that cost overruns beyond the first $2.5 million are paid for by Paulson and his backers, not by the city."

Until City Council passes an ordinance with specific details, this is nothing more than a nice idea.

@andover/exeter

You stated the USL-2 has plenty of West Coast teams. Out of the following teams please tell me which one you meant was located on the West Coast. Since you said there were dozens I'd love for you to point them out to me.

Bermuda Hogges
Charlotte Eagles
Crystal Palace Baltimore
Harrisburg City Islanders
Pittsburgh Riverhounds
Real Maryland Monarchs
Richmond Kickers
Western Mass Pioneers
Wilmington Hammerheads

I know you guys really really really like soccer, but the Portland public WILL get screwed on this deal.

You are simply naive if you don't already see it taking shape at this point.

blabby,

Can you tell us what exactly you see in your crystal ball or are you just throwing poo against the wall today?

Blabby has a bit of a thing for poo Bradley. He has these videos he watches where...well...I'll let you figure it out on your own.

Smooches Blabby...it's been too long.

It has been awhile, Garrett. Good Mondays to you.

Frankly, I think my dazzling clairvoyance (sp?) comes (perhaps) from maybe being a bit older than most people here. This one is just like the tram, which is just like the Beaverton Round, which is just like tens of others.

If there is one thing that the public sector absolutely cannot do, it's forecast how much big future projects will cost. For instance, our $4 billion brige over the river? It will be $5 billion minimum.

Paulson's cost overrun promise is good of him. I admit that. What we don't figure in is how the interest balloons the final tab on bonds - especially risky bonds like zero coupon whatevers. $36 million is the *starting* value. Just like when you buy a car, the interest decides what ungodly amount you're really paying.

One more thing: The Blazers ARE the spectators fund. Soccer and baseball will chip in, but only a minority stake. The Blazers by and large will pay back those bonds.

Blabby. What are you wearing? I'm touching myself. Ooh.

Blabby. What are you wearing? I'm touching myself. Ooh.

I think I may have just double-posted a comment in my effort to egg on Blabby. I am ashamed of and apologize for my own internet n00bitude.

blabby,

Nobody is arguing that the Blazers will chip in the lion's share so to speak. If you are indeed old then you probably recall the attendance that the Timbers enjoyed in the old NASL days. I think it is disingenuous of you at best to imply that the MLS Timbers won't play a significant role in paying into the spectator fund. There will not be as many home games but the crowds will be large and there will also be great international matches that will draw large crowds as well. I think your statements reveal a dislike for the game and it would be refreshing if you just came out and admitted that instead of denigrating the very promising future that Soccer has here in Portland.

"If you are indeed old then you probably recall the attendance that the Timbers enjoyed in the old NASL days. "

I'm not old and I don't remember that. How much were tickets back then?

@bradley

Nah...I don't think Blabby gives a rip about soccer. I don't think that matters to him at one one bit.

It's all about how he thinks the city is going to get screwed over. He says he knows it's going to happen and he speaks from experience. Many of us just happen to disagree with him. None of us want the city to get screwed over. I don't think it will with this proposal and Blabby does.

Now that I'm done fellating Blabby I'm gonna go over to Davis' blog and laugh about how he supports one publically funded stadium but doesn't support this one. Probably because his wife isn't involved with this one like she was with the last one.

http://mattdavisopenshismouth.com/2008/11/…

Obi,
I salute the light within you for an excellent clarification on money howzitts of stadium stuff.... in fact, I suddenly feel a warm glow, like I could support this, I love watching those lithe bods outmaneouver eachother, uncomparably better than American football (can't see the bodies, what's the point, really?), or basketball (people are too tall and watching arms playing with a ball not nearly as keen as watching legs playing with a ball), or baseball (all covered up and SO boring). But, not to be too pince-nez and grey-haired, aren't there opportunities to develop better things using this cool bondage system? THAT is the question.

It's a good question. The bonds off of the spectator fund have to be used for spectator facilities. It's a self-contained unit, if you will. So with the private money and the spectator funds you're looking at about $56 million that won't/can't be used for anything else except this type of project.

So the question is what are the URD dollars best used for? They can be used for lots of things. But they can't be used to pay a teacher. They can't be used to fill in a budget gap. It's probably not a great long term idea to use them to build a methodone clinic or a homeless shelter, although they could, but such things hardly spur development. What would you like to use them for?

Tango competition stadium. Snooker hall. Concert hall where people can DANCE. Discotheque. Arboretum. Climbing gym. Community music center. Tropical butterfly garden, like they have in Vancouver BC. Big, big pools, with olympic diving boards and saunas and hot tubs, like they have in BC. A soccer stadium that will not involve demolishing anything and will NOT be downtown. Can you see drunken belligerent crowds making their way out of downtown, and still see our delicate one-of-a-kind Portland (fre)ecosystem survive? Making their way out of North Portland or Lents would be a more copasetic affair, since we already have a lot of colorful characters there.