I live in the “Rose Quarter” neighborhood of Portland. The name sounds enticing, but what it really means is that I’m just a few blocks away from the Rose Garden Arena, where the Trail Blazers play basketball. I’m also two blocks from the Oregon Convention Center and within the fareless line of city buses and trains. With all that government subsidy, my neighborhood must be awesome, right?
Well, let’s see. The first-level retail in my own building is mostly empty despite the fact that it’s on one of the city’s busiest roads. Aside from real estate offices, the only business open there is a Subway sandwich shop. I have one Starbucks a block to the south of me, another a block to the north, and a third a couple blocks to the east. For food within walking distance I have a variety of ethnic restaurants. Perhaps you’ve heard of them: Taco Bell, Chipotle, and Muchas Gracias. I have lots of burger options too: Burgerville, Wendy’s, McDonald’s, Burger King, and Red Robin. There’s one semi-popular bar nearby that I think only gets full after Blazer games. I haven’t been in, but I’m pretty sure it sucks.
All of which is to say that I’m a bit skeptical that adding a government-owned minor league baseball stadium to my neighborhood is going to rescue it:
The Rose Quarter is now in the running for a new minor league baseball stadium as the city and the Trail Blazers explore how to boost business in the underperforming eastside entertainment zone.
The area has struggled to attract people to restaurants and shops on nights when the Rose Garden doesn’t have a basketball game or concert.
The Blazers wouldn’t own the baseball stadium; the city of Portland would. But a Triple A ballpark might complement other development that the Blazers have planned to bring more people to the quarter sandwiched between the Willamette River and Interstate 5.
Getting the city to pay for a new stadium that would drive more customers to the Blazers-owned developments would no doubt be good for the Blazers. I very much doubt it would be good for the city’s taxpayers or the Quarter’s residents.
Speaking of residents, we could use more of them. My building — which is very nice — is one of very few substantial residential buildings in the neighborhood (unless you count the neighboring high-rise retirement home, but I don’t think its occupants are big spenders). If the city is serious about rejuvenating the area, I suspect that increasing the residential options to make it more conducive to mixed use would likely do far more for it and enable more than lousy chain restaurants* to thrive there.
It’s worth looking back at the Convention Center as a lesson here. It’s a textbook example of city government wasting taxpayer money on a massive project that gets nowhere close to meeting its objectives. From a 2005 Forbes article:
Portland’s story is particularly telling. Prior to the 1998 city election Portland’s visitors association estimated the center had missed out on $17 million in convention business over six months because the center was too small. The regional tricounty government proposed an $82 million general obligation bond to pay for the expansion, but taxpayers overwhelmingly nixed it. So Multnomah County floated a separate bond backed by higher taxes on hotel rooms and car rentals, allowing the expansion to proceed. In the meantime new, rival centers were going up all along the West Coast.
The expansion was completed in 2003, with eco-friendly touches like an outdoor “rain garden.” City fathers boasted of landing the 2005 National Square Dance Convention and its 10,000 high-steppers.
The euphoria was short-lived. Apart from big auto and gardening shows, last year’s schedule was packed with what the industry dubs “smerfs,” which stands for social, military, educational, religious and fraternal groups. These visitors typically pack four travelers in a hotel room and don’t have corporate credit cards to blow on expensive meals.
By the end of 2004 the center’s finances were in bad shape. To get 34 decent-size shows, the center had to indirectly waive rental fees for the organizers of 10 of them. The building would have lost $15,000 a day if not for $6 million in tax subsidies. Hotels are 60% occupied, as fewer than 30% of convention-goers last year came from outside Portland.
And now the city wants to fund another grand venture with other people’s money next door. What could go wrong?
[Stadium link via the Oregon Economics Blog.]
*No disrespect to Burgerville and Chipotle. You guys are all right. I’d just like a little local flavor too, you know?
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Jacob Grier is a freelance writer, barista, mixologist, and magician in Portland, OR. He writes, eats, and drinks a lot. His articles have appeared in The Washington Post, Reason Online, The Oregonian, and other publications.
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Holy shit! You have a Red Robin within walking distance?!
Literally 1 block away. Same with the Burgerville, which I can see from my window.
You’re awfully harsh on very successful chain restaurants. I’d love to see a more full explanation of how that fits with your love of the market.
As a point of contrast, I’m gonna offer the Verizon Center (D.C.) and the Target Center (MN), both of which help revitalize depressed neighborhoods. I wonder if the existence of other attractions in those areas (Museums in D.C., Music venues in Minneapolis) help significantly? Perhaps it’s an issue of critical mass, and adding more venues will help? I don’t know, but it seems plausible.
Your first point would take us a bit off topic, so I’m going to pass on that for now.
I don’t know anything about the Target Center. The Verizon Center has a lot of things going for it, like being at a hub of public transportation, in an area full of tourists, and at the center of a city that’s revitalizing all over the place. It strikes me as a unique situation. Making predictions about other stadiums based on that example would be like predicting the quality of fast food restaurants based on the performance of Chipotle. It’s easy to come up with successes, but they might be outliers.
Success isn’t all that easy to measure, either. It’s not enough to look only at what is seen. You also need to look at what is unseen. What other improvements to the city were never made because so much money went into the stadium? Even if the area around the stadium develops well, it may not have been worth all the smaller sacrifices that were made to build it.
On a similar note, a (supposedly) successful stadium project will result in a “spiky” distribution of real estate values. DC has a few areas of extremely high value, including that around the Verizon Center. There are a few independent businesses in that area, but most of the storefronts go to huge corporations who can secure the leases. Portland, in contrast, excels at having a relatively flat distribution of real estate values, with countless neighborhoods spread throughout the city, each with their own character. As a policy matter one distribution might not be obviously better than the other, but it’s an effect to take into consideration.
Finally, there’s the matter of what happens to the people who were living in redevelopment areas prior to the city’s decision to take them over. In some cases they are victims of eminent domain abuse, their homes seized by the city for the benefit of private developers. Where do they end up after the Gap and the Apple store move in?
So yes, there are undoubtedly some successful stadiums and convention centers built by city officials. But even the apparent successes may not be nearly as good as their backers claim.
Yeah.. that market/chain business is off topic. But I’d love to see a full fledged post in the future.
I also take your point about smaller developments being passed up. Of course, one development only prevents other developments from being built in-so-far as we’re unwilling to fund both. There’s no mutual exclusivity between several small improvements and big projects.
I also think that when we’re talking about big works - like arenas/stadiums/museums/theaters - you’ve gotta take into account a lot more than what it provides for the neighborhood, since the benefit is really one that extends to a much larger community (though costs are often born only by the locals, which is a problem (though a remediable problem)).
As far as gentrification goes… yeah, that’s a big issue. I actually had a professor in law school who openly argued that gentrification was a good thing. It was… interesting. My position is that there should be a lot of assistance offered as part of any major development; ED should pay out at a much higher rate than it does, rent assistance for tenants suddenly facing a steep increase in rents, etc.
Agreed. But just to clarify: It’s not just other, smaller government projects that get crowded out, but also the things that might have been done privately. Higher taxes and more customers flocking to the stadium might mean fewer business improvements in other parts of the city.
Your insight, Jacob, underwhelms me. You speak of one semi-popular bar you haven’t been in but you’re pretty sure sucks. Since you haven’t been in the bar how can you make an objective decision whether it does or does not “suck”? But then that seems to be the tenor of your columns which reflect lazy obversations: judge from the superficial appearance instead of really making an effort to delve into the matter to base a valid opinion. As far as building a baseball stadium, the San Francisco Giants did that and business in China Basin is now booming.
Steve, so nice to have a semi-constructive comment from you for once. For that you get a response.
I’ve been to enough bars to know when the name, location, decoration, and marketing scream “soulless corporate crapfest” and to not bother trying to get a good drink there. There is a slight possibility that I am mistaken, which is why I noted that I hadn’t actually visited. But I think I’m fairly good at identifying places that don’t have any potential. (For what it’s worth, its online reviews are bad as well.)
As for SF, it’s not enough to simply name successes. You might even call that judging from “superficial appearance.” This was discussed above. In the future I’d suggest scanning the existing dialogue before adding your own two cents.
Jacob, my man, I’m a third generation San Franciscan and have lived in that city over half my life (I’m 61, a tad bit older than you). Candlestick did absolutely nothing for the area in Hunter’s Point as opposed to what AT&T Park has done for China Basin. Before AT&T Park was built at China Basin the area was nothing but run down industrial businesses with a few sleazy bars thrown in. Now everything is upscale and try getting a studio there for 2k/month. Before you add your two-cents’ worth, I’d suggest you actually visit the China Basin area before accusing someone who lived there not knowing what he’s talking about. Get the point?!
I don’t know why you think I’m arguing with you about SF. AT&T Park might be a huge success, but that doesn’t tell you whether it’s an anomaly or the normal result of funding stadiums with taxpayer money.
You still don’t get the point! If AT&T Park was not built the area would still be run down with industrial businesses and sleazy bars. It was that way for decades and the minute it was announced that a new baseball stadium would be built at China Basin, old buildings were torn down replaced with new buildings, many of them office buildings and trendy expensive yuppie bars and restaurants. And you should get your facts straight since AT&T Park (originally named Pac Bell Park) is the first privately funded ballpark built for a Major League Baseball franchise since Dodger Stadium in Los Angeles. And if you really knew anything about this matter, you’d know that each time the funding came up for the voters to approve it was turned down (four times I believe). So there was no funding of this stadium with taxpayer money. Like so many of your other opinions, not based on facts, just what you believe to be true. Get the point?!
Again, I’ve never claimed to know anything about SF’s stadium. If it’s privately funded and successful, that’s great. But then it doesn’t have anything to do with Portland or taxpayer funding, so why keep bringing it up?
I still have no idea what your point is. If all you’re saying is that there are some examples of successful stadium ventures, I don’t think anyone here would disagree with you.