For Henry Paulson and his son Merritt, the taxpayers of Portland, Oregon, must look like geese with an infinite supply of golden eggs.
The Paulsons own the Portland Timbers, a second-division soccer club that was recently allocated a much-coveted slot as an expansion team in Major League Soccer (MLS). Merritt, the 36-year-old son of the former treasury secretary, owns 80 percent of the team, while his father owns the other 20 percent.
In a story that has had more twists than a David Beckham corner kick, the Paulsons have doggedly pursued public financing to renovate PGE Park, the mass-transit-friendly stadium in the heart of downtown Portland, in order to make it soccer-specific.
Initially they demanded $85 million to revamp the stadium and build another one for their other team, the AAA-baseball Portland Beavers. An economic meltdown and grassroots outcry later, the Paulsons have been forced to scale back their stadium-building dreams. Now they intend to relocate the Beavers outside Portland and limit PGE Park renovations to $31 million, with the City of Portland kicking in $11.2 million from its spectator fund, a money pool derived from ticket and parking revenues.
It’s a stark reversal for the Paulson gang, who claimed repeatedly that public stadium money could be the solution for Portland’s economic ills. Unfortunately, they are still playing that tune, and the Portland City Council continues to dance.
On July 23 the Portland City Council voted four to one to move forward with the “public-private partnership.” Despite Portland’s reputation for innovative urban planning, city officials have yet to demonstrate the courage and ingenuity necessary to venture beyond the standard-issue financial model whereby the Paulsons cough up some of their millions and the city uses its bonding power to fund the rest.
The junior Paulson recently crowed, “I challenge people to find a better deal out there for the city.”
As it turns out, numerous alternative funding options exist, as long as Portland is willing to live up to its reputation as a creative city.
Call us purveyors of the obvious, but we think one “better deal” for the city would have the Paulsons paying for their own sporty ventures.
With Goldman Sachs–Henry Paulson’s former firm–making $38 million per day and doling out the heftiest executive bonuses in its 140-year history, it shouldn’t be difficult to find investors, especially if Major League Soccer is the money-maker the Paulsons have promised it to be. Perhaps it’s time Henry Paulson went out and beat the silver-frosted bushes for some capital. In 2006 he bestowed $100 million to an environmental charity. Why can’t he make a much smaller donation to his son?