SAN FRANCISCO - Portland, Ore., will issue $35 million in taxable bonds to renovate its 74-year-old stadium through a private-public financing partnership that will convert the facility into a multi-sport venue.
When renovation is completed in spring 2001, Civic Stadium, recently renamed PGE Park after Portland General Electric purchased naming rights, will play host to minor league baseball and soccer teams, local high school football, concerts, and community events.
The renovation is expected to cost a total of $38.5 million, and the city is hoping to accomplish the overhaul at no expense to taxpayers. Bringing the stadium up to current federal disability and seismic code requirements alone will cost an estimated $20 million.
The renovation plan calls for new locker rooms, a new playing field, wider concourses, special seating, concession services, and other improvements. Demolition of parts of the old site began last week, and construction is underway.
The bonds would be federally taxable but state exempt. Portland's bank line of credit will be used to pay for part of the construction with the rest being financed with long-term debt, according to Ken Rust, director of the city's bureau of finance management.
User fees, gross revenues, and box-office receipts will be used to pay debt service on the bonds, he said.
"Our goal is to make the stadium self-supporting from revenues it receives from the selling of tickets and overall operations," Rust said. "If it is successful, that means a major public facility, a venue for more outdoor activity, is financed and costs Portland taxpayers nothing."
Portland Family Entertainment, a two-year-old sports and entertainment development company, will operate the stadium for the next 20 years and contribute nearly $6 million toward the project. PFE is made up of private investors, many of whom live and work in the community. Before PFE can show a profit or pay investors, it is required to pay the city its share of revenues, according to Tim Grewe, Portland's chief administrative officer.
The deal also makes Portland a limited partner.
"We really think we have the state-of-the-art in the business deal we arranged for financing," Grewe said. "We haven't found any other deal like this in the United States. If PFE gets a profit distribution, we will get a profit distribution as well."
PFE will make annual payments to a stadium renewal and replacement reserve, originally set at $200,000 and growing annually by 4%. It also will make annual payments for 20 years starting at $908,000 for the right to operate at PGE Park.
PFE also owns the Albuquerque Dukes triple-A baseball team, the Portland Rockies single-A baseball team, and the Portland Timbers expansion soccer team in the United Soccer Leagues.
