On economic development, Hillsboro swings and misses

by Brendan Monaghan

What is Hillsboro thinking? Two years after Portland chased away the occasionally mildly-popular AAA Portland Beavers, Hillsboro wants to put Oregon back in the Minor League game. The plan, according to The Oregonian, is to convert an existing adult league baseball park in to a 4,500-seat stadium. With this, they hope to attract a future Single-A team. The stadium would have all the modern amenities and luxuries one could imagine (and why not?), including covered seating and a beer garden. What happens $14 million of city-backed bonds later is perhaps more of a mystery. However, what is clear is that city officials seem to be relying on as much pie-in-the-sky economic activity as planners elsewhere who have bought into stadium-based development.

To recap how we got here, Mayor Sam Adams gambled that Major League Soccer would be a much better draw for the Rose City than Minor League Baseball, and retrofitted PGE Park/Jeld-Wen Field accordingly. As these first two MLS seasons have indicated, Adams’ wild guess was wildly successful- the Timbers continue to sell out, the Beavers never could. Searching for a new home for the Beavers turned out to be a fruitless, futile endeavor. Looking beyond downtown- Lents, Milwaukie, Beaverton- planners quickly ran in to NIMBY concerns. Meanwhile, placing the team in its most logical home would have meant touching the third rail of Portland development and disturbing our apparently sacrosanct, white elephant mausoleum, Memorial Coliseum. Why the perpetually-vacant Coliseum could not be converted in to Memorial Stadium (or used for any other purpose than a perpetually-vacant building) is the Tamam Shud of Portland politics. Opponents did not extend their arguments much beyond “Because . . .”

Now Hillsboro wants a second bite at what is proving to be a rotting apple. The market for baseball in the Portland metro area is a niche one, when it exists. In their final five seasons, the Beavers never averaged more than 5,600 fans, leaving 20,000-seat PGE Park woefully empty. When it became clear Portland couldn’t find a home after Jeld-Wen’s conversion, the team skipped town and moved to Arizona- where the Tucson Padres continue to not draw well. Portland is scarcely alone in their apathy toward Minor League Baseball. As Hillsboro seeks a team from the Northwest League, so much as filling a 4,500-seat park would be an ambitious proposition. Of the eight teams in the Northwest League, only two could muster an average attendance above 4,000 fans. The novelty of a new game in town cannot be relied upon for Hillsboro either- the Padres actually drew fewer fans their first season in Tucson than they did their last in Portland.

Then there is the economic squeeze play that Hillsboro is playing. The city is banking on at least 100,000 fans- many commuting west from outside the city- placing them above average in the Northwest League for attendance. This, they hope, will produce $7.1 million in annual economic activity, thus rendering the project effectively revenue-neutral. However, recent trends have shown that stadium-based development, particularly when publicly-financed, doesn’t deliver. “There are lots of reasons to suspect that stadiums are not good investments,” said Rob Baade, president of the International Association of Sports Economists, in an ESPN.com article before the 2010 World Cup in South Africa. “There’s very little evidence that stadiums are anything more than a benign economic development in a neighborhood.”

Stadiums such as this one would be infrequently used, nominally empty all but 38 nights of the year. This creates an alternating negative cycle between dead time and heavy traffic, both being detrimental to surrounding businesses in their own way. These businesses, which are supposed to capture the fans’ discretionary spending in the form of pre-game dinners and post-game beers, rarely do in reality. For an illustration of this stadium-based development in practice, one need only visit the Rose Quarter, which was never seriously developed and adds very little to the area.

Wayne Gross of Hillsboro Parks and Recreation told The Oregonian their new baseball stadium “will be a great catalyst,” and “create more interest in baseball overall.” Stadiums have proven to be an expression of existing economic prowess, not an initiator of it. Hillsboro developers are relying on the old line that “if you build it, they will come.” While this might work in attracting a new or existing Single-A team, drawing in fans to seats- and more importantly, jobs and economic activity to Hillsboro- seems like more of a fantasy in the cornfields.

Brendan is a graduate student at Portland State University, where he hosts the KPSU “Right Jab” radio program, and a regular contributor at Oregon Catalyst. Brendan is studying political science, and graduated from The Ohio State University in 2007, with a degree in political science.

  • Playball

    Cities across our nation have an excellent track record funding stadiums and sports teams. They almost always bring new money, jobs, and excitement to the cities at very little cost to the taxpayers.
    This is an excellent idea that must be done to help move Oregon forward to the future.

    • HBguy

      Citations and sources for these statements???

  • Rupert in Springfield

    Do you remember in the early 90’s when the occasional rock star would have it pop into their head that all of a sudden they were a rapper? Dee Dee Ramone lost a lot of cool points trying this.

    Same thing here. People get in charge of the public’s money think that because they have a big chunk of money at their disposal, they all of a sudden think they know something about business.

    They don’t and people should look at politicians and assorted appointed boobs and realize that, in general, these are people with the antithesis of the business mindset.

    Starting a business requires a risk taking mindset. You have to be willing to risk substantial personal loss of both money and times.

    This is the opposite of government employment. Most people go into government employment precisely because they are risk adverse. Longevity of government work is legendary, pay increases guaranteed, retirement a gold plated hammock affair.

    Running a business requires personal responsibility. If you srew up, the blame is clearly your, and if you were unaware of that, your bank account will quickly validate the quality of your decision making.

    Again, the opposite of government employment, which generally has the lowest level of personal responsibility. Other than police officers, it is hard to think of government employees who are ever held to account for their actions. Indeed, every rule of the work place, from union contracts through cost of living and step raises is steeped in the single notion that a job is about putting in hours, the decisions made while their having little consequence or relationship to ones pay.

    In short letting government employees, the antithesis of the business mindset, play businessman with other peoples money is about as wise as letting your three year old drive the family car. It simply makes no sense. Dee Dee put out a really bad rap album, but at least he had an excuse, he was a professional musician. Clowns who want to play stadium developer have no excuse at all.

  • HBguy

    I just saw in the Oregonian that the cost of the stadium is only 14.1 million because they will be using current city infrastructure and capital. And that they claim the stadium will generate 7.1 million gross revenue per year.

    Here is where government accounting gets messed up. That current infrastructure and uses are going away. So, the cost isn’t just 14.1 million, it’s also the loss of current use, and potential future use. You have to count that in the calculations.

    If I owned a piece of land with a coffee shop on it that I was renting for $2,000/mo. And I wanted to tear that down and  build an office on it for $1 million and rent it for $5,000/mo. I wouldn’t look at it as spending $1 million and receiving $60,000/year in revenue for a return of 6%.

    I’d look at it as spending $1 million for a net increase of $36,000/year for a return of 3.6%.

    And one more wrinkle. If I owned four pieces of contiguous land, and that coffee shop was on only one piece while I had a deli, a donut shop and an ice cream parlor on the other three, I’d also consider the fact that if I built that office building on my piece of land how did that effect my other pieces and how did it all fit in together.

    The city really wants to build this. It has been done with virtually no – or “guided” – input form the voters. 

    The weird thing is, the City of Hillsboro is now run by some pretty conservative leaders. For That city’s sake, I hope it works. But the numbers we’re seeing from the city, while not exactly “cooked” are “selective”. I think this needs to be looked at a lot longer and closer.

  • W3nd3ll2010

    If the stadium is such a “HOT” idea and a profitable one, why not let the ball team finance the stadium?

    We have enough taxes already.  T.E.A. for sure.