For now, the Portland Diamond Project is long on ambition and short on answers. The group has announced an $80 million offer to buy public-school land at one of two potential sites and build a 32,000-seat stadium as part of a multiuse project.
Inside sports business
Stop me if you’ve heard this one: A group wants to buy up prime land to build a mostly privately funded sports venue with adjacent mixed-use development, only without teams offering to play there and no financial “whales” to make it all work.
Sounds like Chris Hansen and the stalled arena project in Seattle’s Sodo District. Hansen is still trying to get the Seattle City Council to sell him part of Occidental Ave. South, even as the city prepares Monday to release a draft environmental-impact report on its partner Oak View Group’s planned $600 million renovation of KeyArena.
But the sports project I want to discuss isn’t Hansen’s; it’s the latest attempt to bring Major League Baseball to Portland.
For now, the Portland Diamond Project is long on ambition and short on answers. The group last week announced an $80 million offer to buy public-school land at one of two potential sites and build a 32,000-seat stadium as part of a multiuse project containing up to 8,000 apartments.
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Sounds great until you realize a $600 million or so stadium requires a team, and lots of parking and beer revenue to recover those private construction costs. And deep pockets to foot the interim bills, which we’ve yet to see announced.
Portland has made fruitless MLB noise ever since pursuing the Montreal Expos more than a decade ago.
So, what’s different now?
Well, for starters, this group has reputable names attached, such as a retired former Nike vice president, Craig Cheek, and former Portland Trail Blazers TV announcer Mike Barrett.
And the $80 million land offer is significant. Not to mention, pretty Hansen-like.
You’ll remember Hansen spent roughly $125 million on Sodo land before trying to build. That’s sizable coin, though Hansen can recoup it all and more if he sells.
And, yeah, the Portland group feels it could recoup its own initial costs by developing the increasingly valuable land even if a stadium never gets done.
“It’s a win-win, really,” John McIsaac, a spokesman for the Portland group, told me Friday. But the plan for now, he added, is to build a stadium.
And just like Hansen’s plan, buying the land is only a first step. Getting a stadium done, political hurdles and all, eventually requires big-time partners.
“We’re not going to disclose all of that right now,” McIsaac said. “It will be gradually disclosed as it moves along.”
Gerry Mildner, an associate professor of real-estate finance at Portland State University, doesn’t feel the Portland market — which would be MLB’s smallest — has the population or economic base to both build a new stadium and lure or buy a team. “Portland needs to continue to expand its population,” he said. “Being in a small market is just no fun.”
He would prefer a team owner come in and privately build a stadium than lease from a locally owned one. That way, he added, the team would be tied to the city and less likely to leave later.
Apart from that, the Mariners hold local TV rights in parts of Oregon where a new Portland team would want its own games shown. One reason Portland had a shot at the Expos was Baltimore Orioles owner Peter Angelos threatening to block any Montreal franchise relocation to Washington, D.C., over TV territorial rights.
MLB appeased Angelos by paying him $75 million to give the relocating Washington Nationals a 10 percent stake in a new TV network the Orioles were planning. That made Angelos even wealthier and saddled the Nationals with one of baseball’s worst TV deals, a scenario MLB is unlikely to repeat.
But TV isn’t necessarily a Portland deal-killer.
The Mariners have long griped about their travel schedule putting them at a competitive disadvantage. Three annual road series in nearby Portland would ease that and perhaps soothe some Mariners TV concerns.
Small wonder MLB isn’t discouraging Portland’s efforts. Actually, Portland provides MLB leverage to prod Tampa Bay and Oakland municipalities, where the Rays and Athletics want new ballparks.
But even if the A’s and Rays stay, MLB commissioner Rob Manfred has hinted at future expansion to 32 teams.
Interestingly enough, Manfred has met with officials in Montreal about possibly putting a team back there. And expansion there would require an accompanying western club. McIsaac confirmed Portland’s group has met with Manfred.
But again, as Hansen discovered in Seattle once billionaire Steve Ballmer left the Sodo group to buy the Los Angeles Clippers, at some point the Portland backers need to go all Cuba Gooding Jr. and show some big money.
Right now, nobody visible within Portland’s group can afford to build a stadium without any guarantee of a team. Or buy a team. Or lease to one without giving up the precious incoming stadium revenues needed to repay private construction debt.
At KeyArena, you have Madison Square Garden group, LiveNation, billionaire David Bonderman and Hollywood producer Jerry Bruckheimer to help OVG cover such bills.
It’s possible some billionaire is lurking in Portland. Nike owner Phil Knight is that area’s Ballmer-type, worth $30 billion according to Forbes.
“Not at this point,” McIsaac said when asked if Knight is on board. “It would be cool, for sure.”
If Knight is laying low until his former vice president Cheek plants some initial seeds, this would make more sense. Unlike Hansen’s group, the Portland project doesn’t have immediate KeyArena-type competition, so there’s no pressing need for any billionaires to step forward yet.
Still, as we’ve learned in Seattle, land acquisitions, public positioning and promises to lure teams don’t mean squat.
To get to opening day in Portland, some whale-sized checks must be written. Until somebody shows up with a big enough bank account, the smart money will file this away under “future considerations.”