Thursday, October 23rd, 2014
Half-True
Oregon Lottery
"However, it took $19.5 million in Oregon Lottery funds for the Port of Newport to eventually land the new NOAA Marine Operations Center-Pacific."

Oregon Lottery on Thursday, March 15th, 2012 in a website

Did it really take Oregon Lottery money to "land" the NOAA operations center in Newport?

One way the Oregon Lottery pitches itself is by talking about all the money it brings to economic development projects around the state: a brewery in Astoria, a new home for nonprofit Mercy Flights, and the National Oceanic and Atmospheric Administration facility in Newport.

From the Lottery’s website: "Newport gave its all when competing with several other sites to bring the National Oceanic and Atmospheric Administration (NOAA) to town. However, it took $19.5 million in Oregon Lottery® funds for the Port of Newport to eventually land the new NOAA Marine Operations Center-Pacific … "

That raised the eyebrow of a sharp-eyed reader, and ours, too. The facility was a huge deal for Newport and for Oregon, allowing us to best the Puget Sound for a coveted federal facility that means jobs and bragging rights. (We took it away from Seattle.)

But is it fair for the Lottery to claim unbridled credit for this wonderful new economic activity?

The state’s main economic development arm, Business Oregon, seems to think so. Its website says the Port of Newport was able to make the winning pitch "largely because of $19.5 million in Oregon Lottery funds, appropriated by the state Legislature, which allowed it to offer a 20-year lease for only $2.4 million per year." Specifically, Lottery revenue bonds were sold to help finance construction of the new Pacific Coast operations center and base; $19.5 million of the total bond sale was earmarked for the Port of Newport.

A news report in The Oregonian at the time confirmed that Newport officials called state Sen. Betsy Johnson, D-Scappoose, to help score lottery funds for the deal:

"Six months later, they laugh at the memory because, as crazy as it seemed, Johnson and the rest of the caucus bought into the port's dream, and despite the worst economy imaginable, secured $19.5 million in lottery funds to help build a new facility for NOAA, should it agree to come. And agree it did, as the port learned Tuesday."

Newport was one of four bidders with the other three in Washington, specifically Seattle, Port Angeles and Bellingham. NOAA awarded the Port of Newport the lease because it had the "highest technically-rated and lowest-priced offer."

We called Johnson and asked for her take on the Lottery statement. Her response? "It’s accurate on one level, but it is not very nuanced," she said.

She credits a whole bunch of factors for the winning bid, including the members of the legislative "coastal caucus" who put aside differences to push for Newport; legislative leaders who made the money a priority; the Lincoln County delegation, which refused to quit lobbying; and the people in Astoria, who gave up their NOAA bid so the federal delegation could get behind one Oregon bid.

"Absent that $19.5 million I don’t think Newport would have shown as well as it did," Johnson said, but she added, it’s not as if the Lottery woke up one morning and decided, "Sheesh, we can make a difference."

Certainly officials in Washington said they could not compete with the financing offered by Oregon. The Seattle Times reported in December 2009 that the lease in Bellingham would have cost NOAA $4 million a year and the lease at Lake Union cost nearly $6 million, compared to $2.4 million a year at Newport.

But let’s not forget that Newport beat the other sites on technical factors, too.

Chuck Baumann, spokesman for the Oregon Lottery, acknowledges lots of factors were at play, but that lottery money was critical for a low-cost lease. "We’re certainly not saying we made the decision," he said. "But it’s also important for us to tell folks where lottery dollars go."

The money was critical. NOAA itself says Newport had the lowest cost bid, and that was in large part due to the Lottery. But Johnson is correct that many other factors played a role and for the Lottery to suggest that its money was the final piece is incomplete.

The statement is partially accurate -- Lottery money made the lease competitive -- but it leaves out important details. Astoria dropped out; Newport’s bid was better on technical fronts than the others; legislative leaders pulled together to set aside the dollars and bonding authority. We rule the statement Half True. 

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