Of the many, many things government in Oregon is or could be involved in, Major League baseball is probably one of the most exciting.  Baseball in Portland is off the charts when it comes to "cool."  However, the plan advanced by advocates to finance the potential team and its stadium, and promises made on the economic development impact of the team raise significant questions which should be answered before any financial commitment is made.

During the recently concluded Legislative session, baseball was a hot topic.  The Legislature ended up passing Senate Bill 6, which provides $150 million toward construction of a baseball stadium in Portland.  The $150 million would come in the form of bonds issued by a yet-to-be-created "stadium authority."  The stadium authority supposedly would have no taxing authority, but would instead depend on Legislative appropriations of funds to repay the principle and interest on the bonds.  The Legislature would appropriate money to the stadium authority from state income tax revenues.  Advocates say that these would be the dollars which flow from state income taxes paid by the players (including visiting team players) and team executives earning more than $50,000 per year, but there is no provision in state law to allow "dedication" of tax receipts in this manner.  Additionally, the Legislature has discretion on whether to appropriate the funds.  (Photo/hotlink: Sckavone Field is the result of an early attempt to raise the level ot the sport in Portland.) 

There are several problems with Senate Bill 6 and with the entire baseball plan.  First of all, $150 million is not going to buy anyone a Major League, state-of-the-art baseball stadium.  Proponents know this, of course, and so their plan calls for a stadium that would cost $350 million.  Unfortunately, even a cursory internet search yields a range of $379 - $627 million for baseball parks either recently constructed or proposed to be built.  Seattle's Safeco Field, opened just 4 years ago, cost $517 million.  While Safeco includes a retractable roof that would not be part of a Portland stadium and significant cost overruns that probably would be, it seems unlikely that Portland can construct a first-class facility for less than $500 million. (Photo links to source, which contains financial information.)

Furthermore, spending $350 million on a public stadium in Portland does not get you a $350 million worth of stadium.  The State's "One Percent for Art" program will guarantee that at least $3.5 million will siphoned off and spent on public art for the stadium.  In addition, the State's "Little Davis-Bacon" law, which requires public construction projects to pay "prevailing" (i.e. "Union") wages will guarantee that the project overspends by at least 10 - 15 percent on labor costs.  So, in Portland, $350 million may buy you only $300 million worth of baseball stadium.  In the final analysis, $600 million will probably need to be spent to produce $500 million worth of stadium.

So where will the additional $350 - $450 million to construct the stadium come from?  Advocates say these funds will come from the City of Portland and the owner(s) of the baseball team.  In addition, Senate Bill 6 provides that if the Legislature refuses to appropriate the money to repay the $150 million in stadium authority bonds (which over the 30-year life of the bonds will cost $400 million), that team ownership will pay for the bonds. 

Imagine you are a potential owner of this proposed Portland Major League baseball team.  If you're a smart business person, you'd want to pencil this thing out and determine whether it's a money making venture. After paying $100 million or more just to buy the team, you could now be on the hook for all or part of $450 million in up front stadium construction costs and all or part of $400 million in bond repayment costs over the next 30 years.  What a deal!

And the financial news for the potential owner(s) just gets worse.  The typical baseball stadium needs $10 - $16 million per year in annual upkeep.  In addition, Safeco Field needed $3 million in upgrades after just 4 years of operation.  Seattle's experience is not atypical.  Jacobs Field in Chicago needed $8 million of upgrades after 8 years and - in what is hopefully a worst-case scenario - the Tampa Bay Devil Rays stadium required an $85 million "facelift" after only 6 years.  Will the owner be on the hook for these costs as well?  If not, who is going to pay them?

Finally, Portland's baseball owner(s) had better be prepared to be saddled with a lease agreement that will make it difficult to be successful.  The lease will bind him, her or them to Portland for 30 years regardless of the team's success, and is also likely to include the kinds of feel-good "social justice" clauses that guaranteed the failure of Portland Family Entertainment at PGE Park.  These could include dictates such as how many jobs must be created and that 10-hour-per-week peanut slingers be paid $10 an hour and provided health insurance coverage at team expense. (Photo is a hotlink.)

Besides the "cool" factor, the other major reason the Legislature agreed to do its part to help attract Major League baseball to Oregon has to do with economic development.  After a decade in which the government squandered the bounty of one of the most robust economic expansions in Oregon history, "economic development" became the 2003 buzz words for Republicans and Democrats alike.  Any legislation that could claim to help create jobs was going to get, at a minimum, a favorable hearing, and probably a couple of breathless press conferences in the Capitol basement.  That "economic development" was nothing more than a passing fad became clear in August when the Legislature stuck taxpayers with a $1 billion tax increase.

But the fiction that the Legislature believed in the need for jobs creation in the state with the highest unemployment rate in the nation held on long enough for baseball to get through.  Baseball advocates promised thousands of jobs, beginning with 1500 high-paying construction positions to build the stadium.  As we have already noted, these jobs will indeed be costly, thanks to the Little Davis-Bacon law, but they will also be temporary.  While it may take 2 years or more to construct the stadium, eventually it will be completed, and when it is these jobs will all go away.  The jobs that will be left, the jobs of people who actually work in baseball, leave a lot to be desired.

If you visit the website of the lead proponent of baseball for Portland at www.oregonstadiumcampaign.com, you will find the statement that "More than 2,000 permanent jobs are anticipated as a result of the new ballpark and team."  If you dig deeper by clicking on the link provided in this statement, you will find an estimate that is quite different. 

An analysis provided to the Oregon Stadium Campaign by Larry Singell of the University of Oregon Economics Department shows that only 651 full-time equivalent jobs will be created by baseball.  Worse yet, 2/3 of these jobs will consist of part-time jobs, many will be the aforementioned 10-hour-per-week peanut and soda vendor kind.  Referring to these jobs as "permanent" also seems misleading.  At best, concession vendors are going to work 81days per year (plus any playoff days) from April to September.  This leaves them laid off for seven months of the year.  Because the stadium will be constructed for baseball only, few other events are likely to be held there to provide additional days of employment.  Only about 200 full-time, family-wage jobs are likely to be created by baseball in Portland, and this number includes the players.

Other promises of economic benefits - such as attracting baseball dollars currently flowing from Oregon fans up I-5 to Safeco Field - are dubious.  Total entertainment dollars are necessarily limited - given the economic climate, it seems unlikely in the extreme that Portland-area residents are going to spend millions of dollars per year on baseball without a corresponding reduction of spending elsewhere.  Generally speaking, studies around the nation have shown that sports does not have an enormous positive impact on an area's economic climate.  Even baseball facilities that are widely believed to be successful, such as Baltimore's Camden Yards, are actually money losers over time.   (AP Photo is a link to the Expos home page.)

Baseball is a wonderful game.  It is a game that spins out in its own time - there is no "running out the clock" in baseball.  At its best, played outside on a balmy summer evening with the scent of freshly mown grass riding the breeze, it can be a soul-stirring experience.  Baseball in Portland would bring intangible benefits that can never be quantified.  But it is the promise of tangible benefits, the things that can be measured and estimated, that raise questions about baseball in Portland.  These questions must be answered, and they must be answered before the public is asked to spend one dime of its precious money on it.

Montreal Expos Stats

OMED: Matt Evans speciaizes in public financing, or what you call government taxation and expenditures.  He is a top information source for a great many media outlets in Oregon and nearby states  He also happens to enjoy America's answer to cricket. and is pretty handy with the prose portion, in our opinion.  

Body text ©2003 Matt Evans  Graphics link to their source, where known.