*US Person wishes to clarify the record by stating he never advocated nationalizing all the banks, just some of them. That the government is willing to resort to bookeeping games to allow Citigroup to report a profit and stop the Street of Broken Dreams from a financial China syndrome is more evidence in favor of allowing the FDIC to liquidate a few zombie banks {2/23/09}.
Tuesday, March 10, 2009
Boosterism Breaks Bad
US Person avoids commenting on Stumptown developments except when they impact wildlife such as the sea lion pogrom taking place at Bonneville Dam. He is aware that readers of this humble blog may not find local news sufficiently provocative*. But occasionally local government exhibits such irrational behavior that derision is deserved. Like many local jurisdictions in the United States, Stumptown is suffering from declining revenues. The city is desperate to find money for its public transportation, low-income housing and health services. But when it comes to professional sporting entertainment, the city acts like an alcoholic coming off a dry spell. The son of Henry Paulson, the former Secretary of the Treasury, is offering a deal to bring a third major sports team to town in the form of an MLS soccer franchise. Merritt Paulson says he will guarantee $60 million in city backed loans to renovate an existing baseball stadium and build another, smaller stadium for the displaced AAA baseball Beavers. Mr. Paulson wants the city to contribute $15 million of urban renewal funds for the project. No doubt the Paulson family is rich. Merritt's father is a Wall Street mogul, a former CEO of Goldman Sachs. But launching a soccer team in the middle of what may be the Second Great Depression goes beyond the "audacity of hope". Assuming Mr. Paulson junior makes good on his promises and does not declare bankruptcy when the deal goes south, the city is still on the hook for 20% of the projected $88 million expansion costs and $2.5 million of the inevitable cost overruns. The urban renewal zone is yet to be created. Some state legislators question the appropriate use of urban renewal funds for what is essentially a private entertainment enterprise. The Mayor, who is operating under the cloud of a state investigation for a morals violation, has run for political cover by the city's powerful business and development community. He is one of two city council members out of five promoting the project. He recently voted for a new mega bridge across the Columbia River despite sprawl and pollution impacts in a city that touts its green reputation. His Honor also backed an aerial tram line that went wildly over budget, leaving the city to pay millions in cost overruns. The heavily subsidized line serves only a limited area. Why a government should be involved in sports entertainment when it is considering cutting services is a paradox about which residents of Stumptown should be concerned. Perhaps Timber soccer fans will walk to the stadium to watch lavishly paid male athletes perform in shorts.