Vancouver couldn't, but Hillsboro brings Bears home with bonds
City's healthy economy, limited debt make new stadium an easy deal
Saturday, July 7, 2012
Owners of the Yakima Bears, who last year tried to negotiate moving the Class A baseball team to Vancouver, plan to open next season in Hillsboro, Ore.
The Hillsboro City Council agreed to finance a stadium without imposing a tax, which proved to be the deal-breaker in November with the Board of Clark County Commissioners.
So how did Hillsboro manage to land a baseball team without levying an additional tax on residents?
Easy: The city agreed to issue bonds to finance the construction of the stadium.
Issuing construction bonds was one move commissioners here were not willing to make, said Clark County Commissioner Steve Stuart. If the county backs a bond and other revenue sources come up short, the difference would have to come out of the county's general fund.
Hillsboro Mayor Jerry Willey said Friday that if the revenue sources the city has identified -- parking fees, stadium naming rights, rental payments from the Bears and a ticket surcharge -- do come up short, the city could dip into its general fund to make annual debt payments.
Willey said Hillsboro's healthy economy has the budget in good shape, and the city carries debt only on the Hillsboro Civic Center, which opened in 2005.
The 4,500-seat stadium will be built on an existing ball field at the city's Gordon Faber Recreation Complex, which includes a 7,000-seat multipurpose stadium. The 90-acre complex hosts regional events and community activities.
The Yakima Bears, an affiliate of the Arizona Diamondbacks, will play 38 home games a year between June 15 and Labor Day.
"We are looking at how to utilize the stadium the other 300 days of the year," Willey said. The recreation complex is used 350 days of the year, he said.
"We're pretty excited about the possibilities (the new stadium) gives us," he said.
After the council signed the agreement with the owners of the Bears on June 25, Willey issued a statement saying the Bears will be a "perfect fit" for Hillsboro, the fifth-largest city in Oregon.
"It is an opportunity to introduce people to Hillsboro and to provide affordable, family-friendly entertainment," Willey said.
According to Hillsboro's projections, the team will bring in more than 100,000 fans a season, figures based on residents' interest in sporting events and the fact attendance at Salem-Keizer Volcanoes baseball games has increased since the Portland Beavers left town.
The departure of the Beavers left the Portland metro area as the largest market in the country without a professional baseball team.
Didn't like risk
It was a market the owners of the Bears wanted to break into, and Vancouver was their first choice.
Stuart was among the biggest backers of the baseball proposal and, it turned out, the only one among the three commissioners willing to support a 5 percent admissions tax.
Initially, owners of the Bears offered Clark County a 30-70 split, with the team putting up 30 percent of capital costs and the county bonding to cover 70 percent of the construction costs. That idea was shot down; under the proposal that died in November, the team's owners would have secured bonds to build a stadium at Clark College and received a portion of admissions tax revenues to help pay off the construction debt.
"All along, there were requests from the team for the county to bond," Stuart said.
For the team, the advantages of a public bond include less risk and a better interest rate.
The county's property-tax fueled general fund -- $279 million for the 2011-12 biennial budget -- pays for basic public services.
"The core principle we started with was, 'No risk to the general fund,'" Stuart, a Democrat, said of the baseball negotiations. "I thought it was a great investment. At the same time, we weren't willing to take on the risk of threatening core services because at the end of the day that's priority number one."
Clark County's debt load includes the Public Service Center, the Center for Community Health, the exhibition hall at the Clark County Event Center at the Fairgrounds, Tri-Mountain Golf Course and energy conservation projects.
None of the other partners in the baseball proposal -- the city of Vancouver, Clark College and the Clark College Foundation -- were willing to back bonds, Stuart said.
At a public meeting in November, it was clear there was no second vote from Commissioner Marc Boldt to support the admissions tax ordinance and the proposal died. Commissioner Tom Mielke never supported the proposal.
Of 41 members of the public who testified, 21 were in favor of the tax to support the baseball proposal. Of the 20 people who told commissioners to reject the tax, many said the public should not be helping pay for a private enterprise.
Boldt had expressed support for the proposal. One reason he changed his mind was a majority of the members of the Vancouver City Council had told county commissioners they wouldn't sign an interlocal agreement that would have secured funding for the stadium even in the event the city enacted its own admissions tax.
Councilors Jack Burkman, Larry Smith, Bart Hansen and Jeanne Stewart, and then-Councilor Pat Campbell all confirmed last year they would not have supported the agreement. Boldt also said it wasn't fair to make moviegoers -- theaters would have accounted for an estimated 53 percent of the admissions tax revenues -- pay for baseball.
Even considering supporting the baseball proposal landed Boldt, a Republican, in hot water with the executive board of the Clark County Republican Party. The executive board, in a controversial decision that prompted two board members to quit, disciplined Boldt and cited his consideration of the baseball proposal as one reason. Boldt is still banished from the party's website.
The political uncertainty was a surprise, said Vancouver resident Ron Arp, who served as a spokesman for Short Season LLC, the company that owns the Bears.
"The team had done its homework for six months before ever going public," Arp said. The proposal had widespread support from the business community, but the proposed tax certainly had critics. Residents of the west Vancouver neighborhood near the Clark College ball fields where the stadium would have been built were critical, too.
In Hillsboro, the stadium will be built on a large, widely used recreational complex with existing infrastructure, which cut the proposed construction cost from $19.5 million to between $13.4 million and $15.2 million, said Barbara Simon, public affairs manager for the city of Hillsboro.
"We see this as an investment for the community," Simon said.
Arp said he wished local leaders had felt the same way.
"I think they are seeing the true multiple use and the value of the facility," Arp said of Hillsboro leaders. "I think they see that and recognize it. That's the risk that the city of Hillsboro was willing to take, and it certainly wasn't a risk that the city or the county or Clark College were willing to take here."
Boldt recently said he wished he had pushed harder for a financing option that didn't include the entertainment tax or public bonds. Stuart wishes the same, even though nobody knows what the option would have been.
In Hillsboro, both the team and the public get a better deal than what was proposed in Clark County. Here, the public would have had to pay a 5 percent tax every time they went to a movie or played a round of golf. In Hillsboro -- unless revenues come up short and the city has to dip into its general fund -- the public won't be paying for baseball unless they go to the games.
Here, the team's owners would have put up $4 million for the capital construction costs in addition to securing the bonds.
In Hillsboro, the owners will pay the city $150,000 per year, plus a 3 percent annual increase, for 20 years. (That's closer to $3 million.) The city will own the stadium and pay for maintenance. The city will collect all parking revenue, at a minimum of $5 per vehicle. The complex has 1,700 parking spaces and the city plans to add up to 400 more. The city will also collect a $1 surcharge on tickets, as well as 70 percent of revenues from naming rights for the stadium and field.
The city has not issued the bonds because league officials haven't approved the deal, but there's no indication that will be a problem, Simon said.
Construction is slated to start in October, and the first pitch is slated to be thrown in June.
Stuart said he's disappointed the Bears didn't end up in Vancouver, particularly for the sake of all the volunteers who did community outreach on the proposal and who were excited at the prospect of going to a ball game on a summer evening.
"I am sure that (Hillsboro officials) have done their homework to show that there will be adequate revenue," Stuart said. "There's still risk."
K.L. Wombacher, co-owner of the Bears, said he had no apprehension approaching Hillsboro after the deal fell through in Vancouver.
"The community response in Vancouver seemed to be pretty positive," Wombacher wrote in an email. "However, it is far more positive in Hillsboro. We haven't heard any negativity for this project."
Stephanie Rice: 360-735-4508 or firstname.lastname@example.org.