The Portland Timbers are continuing to pitch an expansion of Providence Park, and are taking their latest proposal to the city.
Late last month, the Timbers announced their plan to add approximately 4,000 seats to Providence Park. The design unveiled by the team would lead to four levels of seating on the east side of the stadium, with the project estimated to cost at least $50 million and be completed in two construction phases.
The project would provide a way for the Timbers–who regularly fill the more-than-21,000-seat Providence Park–to add more seating. The Timbers will play for the expansion, but are seeking an annual admission tax break on ticket sales for the new seats for the first 10 years they are in place.
Thus far, the Timbers have pitched the tax break–which is estimated to be worth at least $200,000 annually–as a way to facilitate significant private investment into the city-owned Providence Park. The club has also pointed out that the tax break does not apply to admission revenue that the city currently collects. Portland mayor Ted Wheeler is expected to request that the city council approve a resolution concerning the deal on Wednesday, though the city will have some long-term costs to consider. More from The Oregonian:
“What we’re asking for is, for the first 10 years, not to realize money that they wouldn’t have realized anyways,” [Timbers president of business Mike] Golub said.
The city will have to bear some increased costs as a result of the expansion. Portland currently pays insurance on the building itself, but not the operations, and also pays for repairs and other capital replacement costs. The Office of Management and Finance did not respond to a records request for these costs in time for publication.
[Portland’s spectator facilities and development manager Susan] Hartnett estimated that without the stadium expansion, the city will spend $100,000 on insurance next year and more than $125,000 for capital repairs.
“We will see an increase in our costs,” Hartnett said. “Obviously, with the expansion, it will go up. As will the repair costs, with more square footage.”
Under the operating agreement between the city and the Portland, the team has paid the city $1.6 million to $2 million a year in rent and ticket taxes.
The deal gets sweeter for The Timbers beginning in 2018. Rent payments end, and Timbers owner Merritt Paulson gets to keep as much as $1.1 million in ticket taxes each year to to pay himself back for his initial investment in the stadium. The city will receive a far more limited payment: it will only collect the 7 percent ticket tax if ticket tax collections exceed the amount that Paulson will be guaranteed.
The city and the Timbers still need to complete a more detailed contract which, once it is drafted, will require approval from the city council. If they come to fruition, the timing of the upgrades will depend on how long it takes them to receive proper clearance. The earliest the Timbers would begin construction is after this season, with the project aimed for a 2019 completion. A 2018 start on construction would likely mean a projected completion date in 2020.
Rendering courtesy Portland Timbers.
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