Seeking Help to Bring an M.L.S. Team to Portland

“I had to convince him that this wouldn’t be some sort of vanity play and sell the business plan to him,” said Paulson, who owns 80 percent of the teams with his father owning the rest. “The terms had to make sense from a family standpoint.” He added, “Historically, my father’s been my best source of advice through my business career.”

The elder Paulson was the chairman of Goldman Sachs when his son settled on his Portland strategy. But as the engineer of the $700 billion economic bailout, the Treasury secretary is not preoccupied with the Beavers of the Class AAA Pacific Coast League or the Timbers of the United Soccer Leagues First Division.

“He’s aware of what’s happening, but he hasn’t had much time for this,” said Paulson, who was born Henry Merritt Paulson III and is called Merritt, like his grandfather.

Paulson, 35, is immersed in a more ambitious, riskier stage of his sports plan, one that puts him in the middle of a continuing debate about the economic value of government investments and incentives for stadiums that benefit private team owners.

The debate grows more resonant given the worldwide economic crisis.

Paulson wants a Major League Soccer expansion team for Portland, which became known as Soccer City U.S.A. when the Timbers of the N.A.S.L. played there in the 1970s and ’80s. He said he was willing to use $40 million in family money to buy it. Six other cities have applied for the two franchises that are expected to be awarded early next year.

To make his plan work, Paulson wants an $85 million package of city and state financing to renovate PGE Park, where the Beavers and Timbers now play, into a 23,000-seat soccer-only stadium, and to build a Beavers ballpark at a separate location.

“This is not a negotiation,” Paulson said. “The $85 million is it.”

Sam Adams, a city commissioner who will become the mayor on Jan. 1, chuckled.

“I guess that’s the opening salvo of the negotiations,” he said by telephone.

Adams and another commissioner on the City Council, Randy Leonard, support the project and reason that an M.L.S. team will increase the city’s national and international exposure, visitors and attendance in a market with one major league team, the N.B.A.’s Trail Blazers.

But they said they wanted to keep Paulson’s plan from using taxes that would diminish services in a city where recessionary effects usually lag behind the rest of the country.

Paulson has proposed using team revenues and ticket taxes to repay city-issued bonds, taxes from economic activity that would ostensibly increase in a commercial district around the renovated stadium, and a state income tax on players’ salaries.

“I’m not willing to do this unless I can see a reasonable return in three to five years,” said Adams, who has proposed other sites to reduce costs. “It’s got to pay for itself.”

Leonard said: “We have to limit our liability, and Merritt has to have a fair amount of skin in this game. My position is to get him to pay for as much of it as we can.”

Paulson is sensitive to criticism that great family wealth should require him to pay for the stadiums, or that he is seeking a bailout, like the one his father is overseeing.

“That idea is based on the assumption that I’m dealing with huge pools of family trust money,” he said. “Everything I’ve worked from is a legal loan. We’re making a considerable private investment, and we’re saying there needs to be infrastructure.”

Adams knows the city will provide some financing and does not expect Paulson to pay for everything. “Wealthy people tend to be wealthy because they’re shrewd business folks,” he said. “Private owners need a return, but we don’t want them to get unduly rich off us.”

Still, critics of public financing, like Tom Potter, the current mayor, and Jody Wiser, chairwoman of Tax Fairness Oregon, believe the city and state should not enter the stadium business. “This is a private business that needs to support itself,” she said. “There’s no real evidence of public subsidies providing great returns to cities.”

Mark Rosentraub, a professor of urban affairs at Cleveland State University, said the goal of public financing was not to subsidize private businesses but to stimulate public returns. “If Portland can engender new development that can generate new property taxes to pay for its investment, then the deal could be worthwhile,” he said.

Paulson grew up enamored of baseball, basketball and football, and marketed NBA TV while at the league. But for three of his five years there, he spent his spare time looking at investing in minor league baseball, the N.B.A. Development League and soccer.

“Portland was just the most attractive opportunity, with an incredibly strong Triple-A baseball market and one of the best soccer markets, by any metrics,” he said.

Moving up the soccer hierarchy to owning an M.L.S. team suggests a heightened stability to a league in which teams are now worth $40 million or more. Over all, it is still not profitable, but it is losing far less than it once did. It has lured David Beckham and investors like Oscar De La Hoya. It has created intimacy with soccer-specific stadiums and fostered stability with long-term television deals. “There are no longer questions about our survival,” Commissioner Don Garber said. “The question now is, how far we can go?”

Similar questions face Paulson: Will he receive stadium financing, as other M.L.S. teams have, and will he get it in time for the expansion vote in the first quarter of 2009?

“Look, you have to be a believer,” Paulson said. “This is a vetted market in terms of its appetite for soccer and has a corporate community ready to support an M.L.S. team.”

If he does not receive the financing, Paulson said he would continue running his two minor league teams. He is not facing a crisis or city officials who do not want to negotiate with him.

“All I’m doing is presenting an opportunity,” he said. “It’s been embraced, but it doesn’t mean it will happen. I’m not holding a gun to anyone’s head.”