For decades, Portland, Oregon, has aspired to join the ranks of cities hosting Major League Baseball (MLB). As one of the largest U.S. metropolitan areas without a major professional baseball team, Portland's pursuit has recently gained momentum with the Portland Diamond Project's announcement of a Letter of Intent to purchase Zidell Yards on the South Waterfront for a future MLB stadium.
This development not only signifies progress in bringing baseball to the Rose City but also presents significant opportunities for commercial real estate owners. Proximity to a new stadium can enhance the value of apartment buildings, office spaces, and retail properties. This newsletter delves into Portland's baseball journey, the potential impacts on commercial real estate, and lessons from other West Coast cities that have benefited from similar ventures.
A History of Ambition
Portland's quest for professional baseball dates back several decades. In the late 1990s, the city made a bid to relocate the Montreal Expos (now the Washington Nationals), proposing PGE Park (now Providence Park) as a temporary venue. However, concerns over stadium facilities and market size led to the bid's failure. In recent years, the Portland Diamond Project (PDP) has spearheaded efforts to secure a team, evaluating multiple sites, including Terminal 2, the Lloyd District, and Terminal 1. The recent focus has shifted to Zidell Yards, a 33-acre former shipyard on the Willamette River, marking a significant step toward realizing Portland's MLB aspirations.
Why It’s So Difficult to Build a Baseball Stadium
Constructing a professional baseball stadium presents numerous challenges, particularly in a city like Portland. The compact urban core limits the availability of large parcels of land suitable for such a development. Unlike sprawling cities, Portland lacks abundant open spaces near the city center, making site selection arduous. Additionally, potential sites often require rezoning from industrial, residential, or commercial use, a process that can be time-consuming and contentious. Environmental concerns, especially for sites near the Willamette River, add another layer of complexity due to floodplain risks and necessary environmental remediation.
Community opposition also plays a significant role. Residents may express concerns about increased traffic, noise, and potential displacement, leading to resistance against stadium projects. Historical preservation efforts can further complicate development, particularly if proposed sites are near historically significant areas.
Financing and securing public subsidies present additional hurdles. In a city with progressive public sentiment like Portland, garnering taxpayer support for a stadium can be challenging, as many residents question the use of public funds for private ventures. Moreover, potential stadium sites often compete with land designated for other critical uses, such as affordable housing or industrial redevelopment, necessitating careful consideration and planning.
Impacts on Commercial Real Estate
A professional baseball stadium can significantly influence nearby commercial real estate, offering various benefits to property owners.
Apartment Buildings: The presence of a stadium often attracts new residents, including young professionals and families who value proximity to sports and entertainment venues. For instance, in San Francisco's Mission Bay neighborhood, the development of Oracle Park led to a 20% increase in apartment rents within five years of the stadium's opening.
This trend underscores how stadiums can enhance neighborhood desirability, driving demand for residential properties.
Office Buildings: Proximity to a stadium can make nearby office spaces more appealing to businesses seeking to offer lifestyle perks to employees. The integration of stadiums into mixed-use developments has been particularly effective. For example, Seattle's T-Mobile Park spurred a wave of office leasing in the surrounding SODO district, attracting tenants drawn to the area's unique blend of industrial and entertainment amenities.
Companies often view these locations as advantageous for employee recruitment and retention.
Retail Properties: Retail businesses near stadiums frequently experience substantial increases in sales, especially on game days. In San Diego, the development of Petco Park revitalized the East Village neighborhood, leading to a significant boost in foot traffic and sales for local shops, restaurants, and entertainment venues. Retail properties in such areas benefit not only from event-driven traffic but also from the sustained vibrancy that stadiums contribute to the locale.
Lessons from other West Coast Cities
Examining the experiences of other West Coast cities provides valuable insights into the potential impacts of a new stadium in Portland.
San Francisco (Oracle Park): Opened in 2000, Oracle Park played a pivotal role in revitalizing the Mission Bay neighborhood, spurring demand for residential and commercial developments. The area witnessed a 20% increase in apartment rents within five years, highlighting the stadium's influence on local real estate values.
Seattle (T-Mobile Park): Since its opening in 1999, T-Mobile Park has transformed Seattle's SODO district, attracting significant retail and hospitality investments. The ballpark's presence catalyzed the development of nearby office spaces, drawing businesses interested in the district's unique mix of industrial and commercial characteristics.
Los Angeles (Dodger Stadium): Dodger Stadium has long been a focal point for its surrounding neighborhood. Recent upgrades and developments, including the adjacent L.A. Live complex, have amplified its economic impact, bolstering local retail and entertainment businesses.
San Diego (Petco Park): Opened in 2004, Petco Park significantly contributed to the revitalization of San Diego's East Village neighborhood. The ballpark's presence attracted over $4 billion in private investment within three years, transforming a previously blighted area into a vibrant urban community.
Analyzing Portland’s Proposed Sites
Portland has proposed several sites for its baseball stadium, each with unique opportunities and challenges.
Terminal 2 (Port of Portland): This scenic waterfront location offers proximity to downtown and the potential for mixed-use development. However, the site’s industrial zoning, environmental cleanup requirements, and limited transit infrastructure present significant obstacles.
Lloyd District: As a central location with excellent transit access, the Lloyd District is a promising site. However, its high-density development makes land acquisition complex and costly, raising concerns about the displacement of existing residents and businesses.
Terminal 1: With its large footprint and waterfront appeal, Terminal 1 holds potential for creating a vibrant, mixed-use neighborhood. Still, the site faces competition from affordable housing proposals and carries high environmental remediation costs.
Zidell Yards: 33-acre former shipyard on the Willamette River south of downtown Portland owned by ZRZ Real Estate, a Zidell family business. As mentioned above, this site appears to be the current frontrunner with an executed letter of intent in place.
The Takeaway
Portland’s dream of a professional baseball stadium presents both challenges and opportunities. While securing a site and financing the project are significant hurdles, the potential economic benefits for commercial real estate owners are substantial. By leveraging lessons from cities like San Francisco, Seattle, and Los Angeles, Portland can position itself to maximize the impact of a stadium on its local economy and real estate market.
