Portland making big pitch for Expos.

Byline: David Steves The Register-Guard

Like anyone who grew up with baseball in America, Mike Hudson brims with nostalgia and bristles with excitement at the possibility of taking his own children to a big-league game, right here in Oregon.

But Hudson isn't a kid anymore. He's 42 and has a family - and a family budget - to worry about.

So if bringing Major League Baseball to Oregon means paying even one dime in taxes for a $300 million baseball stadium, then Hudson would rather continue to get his baseball fix at Eugene Civic Stadium - home of the local minor-league Emeralds - or in front of his TV, watching big-league games on satellite.

The Eugene man says he has weighed his enthusiasm for the national pastime against the sobering questions about whether bringing a major-league team to Portland will work out for Oregon's economy and its taxpayers.

His conclusion?

"It all just makes way too much sense not to happen," said Hudson, who volunteers with the Oregon Stadium Campaign by writing letters to the editor and postcards to decision-makers expressing his support.

A team of Major League Baseball executives met Tuesday with Portland's mayor and Oregon Stadium Campaign leader David Kahn to discuss relocating the Montreal Expos to Oregon's biggest city for the 2004 or 2005 season.

But the biggest and first step in that process will happen in Salem, where the Legislature is being asked to approve a bill that could generate $150 million or more - roughly half the cost of a new Portland stadium - by imposing the state's existing income tax on the salaries of baseball players and team executives. That money would repay construction bonds over a 30-year period.

The stadium funding measure, House Bill 3606, passed the House last month and is slated for its first Senate hearing on Thursday.

The bill stipulates that Oregon would not be obligated to issue or back up the bonds. Should HB 3606 pass the Legislature, one of the first tasks, supporters say, would be to identify what third-party entity or entities would take on the legal responsibilities of issuing the bonds and guaranteeing their repayment.

With Oregon in the midst of a budget crisis, lawmakers have been especially wary about committing any tax dollars to a baseball stadium.

Given that, many legislators have expressed skepticism about whether the baseball bill, despite its many provisions to insulate the state and its taxpayers, could allow that to happen anyway.

Sen. Tony Corcoran, D-Cottage Grove, said he told a baseball stadium lobbyist Tuesday morning that he wants to be able to support the bill, since he views it as jobs-creating legislation, but he isn't convinced that the safeguards are adequate.

"The scenario I worry about is that they move here and after five years there's not demonstrated fan support," he said. "You've got a park that's vacant - and you've got this debt."

It's been a concern for Sen. Vicki Walker, D-Eugene, as well. But Walker said she is satisfied that the state is protected from the costs of the stadium, since the tax revenue comes from baseball salaries, and an as-yet-undetermined guarantor would have to foot the bill if the funding scheme falters.

"If the stadium falls flat, then it's the guarantor who's on the hook and not the taxpayers of the state of Oregon," she said.

David Kahn, the head of the Oregon Stadium Campaign, said he "finds it troublesome" that anyone would even suggest that with all the safeguards in HB 3606, taxpayers might somehow pay for a stadium bailout.

"There's no way. The state is not going to let it happen. It's in the bill," he said. "The state is not going to be the issuing entity. The state is not going to be the guarantor."

Boosters of big-league baseball in Oregon say it's highly unlikely that such safeguards will even have to be evoked, given their confidence that Portland and the rest of Oregon are ready and able to support a Major League Baseball team.

The public funding will come through without encumbering taxpayers, the fans will fill the seats, the businesses will lease the luxury suites, the cable TV deal will come through and big-league baseball will flourish in Portland.

What do the numbers say about Oregon's ability to support a Major League Baseball team on top of its National Basketball Association team, the Portland Trail Blazers?

When it comes to demographics, there are two distinct ways to size up Portland as a major sports town.

One is to compare the Portland area with cities that already host MLB franchises. Should baseball chose Portland over competing bids from Washington, D.C., and northern Virginia, then the Expos would move to what becomes the fourth-smallest of 30 MLB markets.

With a metropolitan area population of 2.18 million, Portland outsizes only Cincinnati (1.96 million), Kansas City (1.76 million) and Milwaukee (1.65 million).

That will limit the kind of revenue a Portland ball club can expect from certain resources, such as cable TV rights on regional game coverage.

Pro sports observers often cite cable TV revenues as one of the biggest reasons that teams such as the New York Yankees have been able to outspend by three-fold smaller market teams.

According to MLB's "blue ribbon" report on baseball economics, the top 10 revenue-earning teams from 1995-99 were all big and midsized markets except one, the 23rd-largest Denver-based Colorado Rockies. The teams with the smallest revenues were disproportionately in smaller-market towns, such as Pittsburgh, Milwaukee and Minneapolis/St. Paul.

Drew Mahalic, CEO of the Oregon Sports Authority, said he remembers how people stacked Portland up against bigger cities prior to 1971, when the city was being considered for a National Basketball Association franchise. "The word on the street," he said, was that Portland was too small to fill an NBA arena, and would never be able to produce enough team revenue to bankroll a championship-caliber squad.

"And we saw what happened. We got the team, we got an NBA championship, we got a record for the most consecutive sellouts in the history of the NBA," he said. "So when we hear these things, we can know that it doesn't necessarily mean that's what's going to happen in Portland - as has been proven by the Blazers."

Oregon baseball advocates make no bones about Portland's smaller population compared with most MLB cities.

But boosters size up Portland against other markets in a way that suggests it's among the most underserved cities in America, by measuring the area's population against the number of pro sports teams to divide their attention and split up their dollars.

In that regard, the Portland market is the third-highest population per team - ahead of cities such as Boston, Chicago and Atlanta - because their larger populations must also support four or five major teams.

Only the nation's two biggest urban areas, Los Angeles and New York, have a higher number of residents per pro sports team, according to the Oregon Stadium Campaign.

Steve Kanter, a Lewis & Clark College law professor and head of the Portland Baseball Group, said that's a key difference between Portland and similar- and smaller-sized MLB markets.

"These places are all trying to support more teams than Portland would, with two," said Kanter, whose group is part of the Oregon Stadium Campaign.

While Oregon's elected officials must decide whether the economic and quality-of-life benefits of big-league baseball are worth the risk, Kahn, the head of the Oregon Stadium Campaign, said they should bear in mind that ultimately it's not their choice. Given the way the stadium-funding bill has been drafted, he said, the real risk will be borne by owners and by baseball - not legislators and the taxpayers.

"Somebody will have to make the determination that the market is deep enough and big enough that it's doable," said Kahn, a former sportswriter for The Oregonian newspaper before moving on to become general manager and now special adviser to the NBA's Indiana Pacers.

"And I wouldn't have made myself available to do this if I didn't think it was doable, if I thought it was pie in the sky," he said.

WHAT'S NEXT

The Senate Rules Committee will hold a public hearing on the baseball stadium funding bill, House Bill 3606, at 3 p.m. Thursday in Hearing Room B.

HOUSE BILL 3606

The measure would:

Authorize state officials, with the approval of the Oregon Treasurer and Department of Revenue, to grant certain tax revenues to the City of Portland for construction of a Major League Baseball stadium, estimated to cost at least $300 million.

Limit such an agreement to 30 years.

Allow only the use of income tax revenue generated by imposing the current tax on salaries of players and team executives. Teams would be required to withhold 8 percent of members' compensation.

Stipulate that if actual revenues fall short of estimates, the "grantees" - presumably the team's ownership - would have to make up the difference.

Requires that before provisions of the bill can be acted on, a MLB franchise must agree to locate in Portland for at least 30 years.

Limits the state's legal exposure to costs associated with the stadium by saying the state does not pledge its full faith and credit or taxing power and that the Legislature has no legal obligation to appropriate funds for the stadium.

MAJOR LEAGUE CITIES

Portland's metro population would rank it among the smallest one-third of cities with Major League Baseball franchises. Here's a look at the areas, with population in millions:

1. New York* 20.2

2. Los Angeles* 16.0

3. Chicago* 8.9

4. Baltimore-D.C. 7.4

5. San Francisco* 6.9

6. Philadelphia 6.0

7. Boston 5.7

8. Detriot 5.5

9. Dallas 4.9

10. Toronto 4.7

11. Houston 4.5

12. Atlanta 3.9

13. Miami 3.7

14. Seattle 3.5

15. Montreal 3.3

16. Phoenix 3.0

17. Cleveland 2.9

18. Minn.-St. Paul 2.9

19. San Diego 2.8

20. St. Louis 2.6

21. Denver 2.4

22. Pittsburgh 2.3

23. Tampa-St. Pete 2.3

24. Portland 2.2

25. Cincinnati 2.0

26. Kansas City 1.8

27. Milwaukee 1.6

UNDERSERVED MARKET?

Advocates for bringing the Expos to Portland focus on the area's population per major sports franchise. Under such a measurement, Portland is among the most underserved metro areas. With an MLB team, it would drop to 27th - still ranked higher than 12 MLB markets. Here's a ranking of the areas, with number of pro teams in parenthesis and population per team (in millions) following it:

1. Los Angeles (6) 2.67

2. New York (9) 2.24

3. Portland (1) 2.2

4. Chicago (5) 1.78

5. Sacramento (1) 1.7

6. San Antonio (1) 1.6

7. Norfolk (0) N/A

8. Orlando (1) 1.5

9. Philadelphia (4) 1.5

10. Houston (3) 1.5

27. Portland (2*) 1.1

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