Risky Business

THE LENTS NEIGHBORHOOD in Southeast Portland is grappling
with the make-or-break deal of a lifetime. Last week City Commissioner
Randy Leonard and Major League Soccer backer Merritt Paulson asked the
neighborhood to gut its urban renewal fund to pay 80 percent of the
construction cost for a new Beavers Triple-A Baseball stadium in Lents
Park. But currently, there is no solid economic analysis that shows the
$42 million would pay off for the neighborhood economically.

“This is a risk,” Leonard told the neighbors at a special meeting of
the Lents Urban Renewal Advisory Committee last Tuesday, May 12.
“There’s a chance that in five years I might be sitting here strapped
to a chair, forced to listen over and over to what I’ve said here
today.” Leonard says he needs to find a place for the Beavers stadium
quickly in order to turn their current home, PGE Park, into a Major
League Soccer stadium.

The $42 million the stadium would use from the urban renewal fund is
money the neighborhood sets aside for affordable housing, business
development, and street improvements in the depressed area.

Despite the risk, Leonard tried to sell neighbors on the idea that
the stadium will bring people, pride, and money to the downtrodden
neighborhood. “It is my unshakable belief that if we build a stadium in
Lents, it will cause developments to happen that would never happen
otherwise,” said Leonard. For support, Leonard pointed to a single
study, from Stanford Graduate School of Business, showing a Major
League Baseball/Soccer stadium in San Diego that was a “tremendous
success” for both city and team.

But economists say that study does not prove the Triple-A stadium
will revitalize the neighborhood or create new revenue for
Portland.

“The point of a modern stadium is to keep all the money spectators
are spending within the stadium—not in the area around it,” says
Roger Noll, a Stanford economist and editor of the book Sports,
Jobs, and Taxes.

The Portland Development Commission’s (PDC) draft budget of what
Lents Town Center Urban Renewal Area will have to cut in 2010 and 2011
to pay for the stadium has a lot of zeroes. For those two years, the
stadium cost would eat up all of Lents’ business development funds
($2.6 million), all of its affordable housing budget ($7.4 million),
all of its funds to build neighborhood sidewalks ($500,000), and $6.6
million from the plan to redevelop the ailing Lents Town Center.

Some neighbors balked at the steep cost and uncertain benefits.

“You do not need a ballpark to revitalize. You need the projects
this will cut,” Lents resident Kristina Lake told the packed meeting
room.

Of those projects, affordable housing cuts received the most
pushback and debate. Legally, each urban renewal area is required to
spend 30 percent of its budget on affordable housing. But Leonard and
Mayor Sam Adams want to change the rules so that 30 percent of urban
renewal funds citywide would go toward affordable housing, freeing up
Lents to chop its budget for 2010 and 2011.

“Lents, at market rate, provides enough affordable housing,” Leonard
told the neighbors. “We think that the money ought to be spent on
economic stimulus projects.”

In the last three years, the PDC used Lents’ urban renewal funds to
counsel and financially aid 600 new homeowners in the neighborhood.
That same number would have to seek out help from private companies if
the stadium deal goes through.

While Lents Urban Renewal Advisory Committee Chair Cora Potter
agrees that $42 million is a “big scary number,” she says the projects
receiving zero dollars in 2010 and 2011 are not getting
“cut”—just put on hold until after the stadium is built. And, she
says, bringing the Beavers to Lents is exactly the sort of project
urban renewal money should be funding.

“It’s for the big projects that could catalyze economic development
that could normally not be developed by private investment,” says
Potter.

Other neighbors see it differently. “I want to see Lents Town Center
rebuilt. That’s what urban renewal is for—rebuilding a community,
not making Paulson richer,” says committee member Clint Lenard.

“They talked about the economic benefits of it as if it was a sure
thing, but I think people need a little more confidence in that,” says
Jeff Rose of the Lents Neighborhood Association. “What neighbors really
need is just a grocery store.”

Private consultants are currently working to complete an economic
analysis of the stadium’s impact on Lents and larger Portland,
compressing a typical several-month timeline into two weeks. But if the
rushed deadline can’t be met, the Lents Urban Renewal Advisory
Committee will have to vote on whether to fork over $42 million without
seeing any hard numbers on what they will get in return.