Debts may send Beavers packing
- Andy Giegerich
- Portland Tribune - News
• League scouts for new owners, raising fears that team will be moved
The failure of Portland Beavers operators to pay back rent to the city, as well as finalize a debt restructuring deal, has league officials looking for new owners including ones who could move the team from Portland.
Metropolitan Sports LLC, which operates the Beavers baseball and Portland Timbers soccer franchises and runs PGE Park, hasn't paid the city a cent for rent and fees since April 2002 and will owe more than $1.5 million if it misses a payment deadline Monday.
Metropolitan Sports probably will miss the fifth consecutive quarterly payment it owes the city as part of the PGE Park operating agreement, a source close to the group said.
The city says it has devised no options on how to handle the situation. Nor does it have a timetable for collecting the PGE Park operator's outstanding debt.
The situation has Pacific Coast League officials wondering whether the Beavers will remain in Portland next season. The league, operating on its own, is negotiating with prospective new owners for the team.
'Triple-A baseball fully anticipates being in Portland in 2004, but even that is not fully assured,' said Branch Rickey III, the league's commissioner. 'We are fully committed to addressing all the baseball-related debt, one way or the other, but we are not willing to have a negative attachment to any of our franchises of unpaid debt.
'We thought we'd have it solved well before this.'
Metropolitan Sports also plans to delay negotiations to reduce, then purchase, its $26 million debt with TIAA-CREF, the New York City-based teachers pension fund, until issues regarding major league baseball in Portland are resolved, according to Metropolitan Sports spokesman Brian Gard.
The Beavers definitely would leave town if Major League Baseball decides to move the Montreal Expos to Portland for the 2004 season. If that happened, the team's owner would need to pay the territorial fees of the Beavers' owners which could defray some of the money that Metropolitan Sports would use to purchase the TIAA-CREF debt.
Sources have said that the former owner, Portland Family Entertainment, paid about $11.5 million for the team three years ago.
Metropolitan Sports, founded by PFE limited partner Peter Stott, took over the team and stadium operations in February, when it began negotiating a deal to take over part of the debt that PFE owes primary creditor TIAA-CREF.
Gard wouldn't confirm whether Metropolitan Sports planned to make the payment by Monday.
Metropolitan Sports has missed two quarterly rent and capital improvement payments of $299,603 to the city since gaining control of the teams and PGE Park's operations.
The group also owes the city three quarterly payments of $288,080 missed by PFE, beginning June 30, 2002. The total amount due includes $47,813 in interest.
City practicing 'patience'
City officials wouldn't say how the continued missed payments would affect the team's future.
'We continue to evaluate the situation and the city's options on a daily basis,' said John Acker, the city's spectator facilities manager. 'A publicly owned stadium provides a place for a variety of community events. We are carefully considering all of the available alternatives while being mindful of the park's benefits for the community.'
Acker said the city has set no timetable for seeking the stadium operator's payments, stressing that it will show 'patience' with Metropolitan Sports.
'It's being evaluated on a daily basis,' he said. 'To take some action without careful consideration might compromise its community benefits, and we're being very careful that we not do that. We're going to make sure the action we take is the right one.'
The Metropolitan Sports source said the group blames the original operating agreement that PFE signed with the city for the missed quarterly payments.
'Short of the agreement to restructure, the capital arrangement was not sufficient to sustain this operation, given the agreement with the city,' the source said. 'It goes way back to the original reason for seeking a new financial structure.'
The city made several concessions to Metropolitan Sports on the original stadium-operating agreement; the concessions, though, are not set to kick in until Metropolitan completes its agreement to pay off the reduced TIAA-CREF debt.
TIAA-CREF tentatively agreed in February to forgive about$15 million of the $26 million debt, allowing Metropolitan Sports to purchase the debt and, in effect, the Beavers and Timbers for $11 million.
Yet the deal was never finalized because Metropolitan Sports apparently could not reach a proposed lending agreement with Bank of America this spring. The group continues to seek either more investors or equity lenders, sources said.
'We continue to have dialogue with the people involved, and we're hopefully working toward a solution,' said Pat Connor, a TIAA-CREF spokesman.
Decision waits on Expos
The Pacific Coast League's Rickey wouldn't say whether the prospective owners that the league is 'bringing to the table' are enlisted to keep the team in Portland.
'The situation is of significant concern, and we're rigorously pursuing a more comprehensive solution,' he said. 'There's been quite a bit of progress in terms of bringing to the table prospective buyers, and they have taken quite a bit of time and effort to examine the situation and find a remedy.'
The source said Metropolitan Sports and TIAA-CREF will hold off completing their debt restructuring until Major League Baseball determines a relocation site for the Montreal Expos.
If Portland, a finalist for the team, is selected, the Expos' owner would need to pay the Beavers owners' territorial fees and help relocate the Triple-A team.
The major league decision could hinge on an Oregon legislative bill that would fund $150 million of a $350 million stadium in Portland. Baseball proponents think that the bill's passage would ensure that Portland either attracts the Expos or another relocated big league team within the next several years.
Attendance at Beavers and Timbers games is running slightly behind last year, said Mark Schuster, the former PFE president who's running the teams for Metropolitan Sports.
'Overall, we're on target,' he said. 'We know we're not going to draw well in April and May, but now that the weather is starting to turn, attendance is better. That'll be the story every year.'