For years, Civic, though much beloved by its citizens, has sometimes been a drain on our General Fund. Over the period of the agreement, the city stands to make money. For details on the financials of the agreement, I want to turn things over to Tim Grewe, Director of the Office of Finance and Administration and a member of the Negotiating Team that constructed the Memorandum of Understanding. Most of this information is in the press release, so I ll be brief. These revenues include not just those generated by the stadium but also any teams that PFE acquires.
Net revenues can be difficult to calculate with the formula subject to interpretation.
To avoid disagreements and to ease administration, the city and PFE preferred to base the agreement on gross revenues. This is the amount that PFE requires to cover operating costs including guaranteed city payments, debt payments, and a reasonable rate of return to their investors. In effect the citizens of Portland will be benefiting along with the PFE investment group from a profitable civic stadium. A number of other financial aspects of this public private partnership are worth some emphasis. PFE will assume all responsibility for cost over runs.