portland independent media center  
images audio video
newswire article reporting portland metro

economic justice | government oregon elections 2006

Portland Aerial Tram Fiasco Blows City Budget

Within three years, the Portland Aerial Tram has exploded it's original budget of $15.5 million by over 400%. Meanwhile, Portland taxpayers are being asked to let City Hall amend the City Charter to allow a personal income tax to pay for public schools.
The Oregonian reported today that an independent engineering review of the tram shows the cost of the controversial gondola that will rise from the OHSU South Waterfront development to the "Pill Hill" location of OHSU's current facilities is now estimated at $55 million. City Council has already approved two increases in funding since the project was originally approved at $15.5 million three years ago without a line item budget proposal, contingency analysis, or architect and engineering fees. The independent analysis also noted serious design problems with the tram and that as yet there remains no complete cost accounting of the project to date, nor a detailed projection of future costs.

The project was pushed strongly by former mayor, Vera Katz, and has continued under the "leadership" of her former Chief of Staff and current City Commissioner, Sam Adams. A "non-profit" organization, the Portland Aerial Tram Inc., included a virtual who's who of big developers being paid up to $250/hr, as well as former Commissioner (and probably now a happy loser in the 2004 mayor race), Jim Francesconi.

As the aerial tram project proceeded to run into greater and greater cost and schedule problems, local journalists began uncovering various memos indicating that both PATI and City Hall had foreknowledge of the weak estimates put forward to justify the project three years ago. Katz and Francesconi refuse to talk to the press about the issue, and City Hall has since blamed everybody from their own staff to the PATI board, to Portland citizens themselves for the fiasco. That obviously doesn't work for Sam Adams, who was Chief of Staff under Katz, and publically called for the resignation of PATI Director, Vic Rhodes. Adams went public that Rhodes had resigned, when in fact he did not, further embarassing the freshman Commissioner.

Meanwhile, OHSU and the City of Portland continue to point the finger at each other for the blame. Tom Potter, the only guy who wasn't around when the tram project began, has relieved Adams of supervision over the tram and has distributed responsibility to all of City Council. Potter has also suggested turning the project over to that black hole of non-compliance with State urban development, impact reporting, the Portland Development Commission.

Meanwhile Erik Sten, Randy Leonard, and Dan Saltzman (incidentally an MS in Engineering from MIT who should have been the first to spot the absurdity of the initial proposal) have voted to keep the project going with additional money on three different occasions. Only now has Leonard been the first to publicly declare an end to any additional city money. Sten and Saltzman, both up for reelection in May, have been the most vociferous in their accusation of being misled by their own staff and finger-pointing at others for the reason why they voted for the project three times without ever seeing a line-item budget proposal.

Nevertheless, the mainstream media, PATI, City Hall, OHSU's Board, and Portland's construction moguls, continue to insist that the project must go forward and the ends justify the means, no matter how much it costs. This at a time when Tom Potter is asking Portland residents to vote to amend the City Charter to allow for the imposition of a city-imposed personal income tax to keep schools open. Randy Leonard has publicly speculated that the aerial tram will ultimately cost in excess of $100 million, plus annual maintenance expenses--an amount exceeding what Potter hopes to get from his income tax.

homepage: homepage: http://www.oregonlive.com/special/tram/

thanks, this point cannot be made often enough 02.Feb.2006 13:50


I wrote about this in general a short time ago:

The idea is to educate people that *funding* is not the problem, *allocation* is. The city has enough money to more adequately fund education but the politicians simply choose to allocate tax dollars on corporate give-aways like the tram. If it were the case that the city was allocating money wisely and needed more then a tax proposal would be reasonable. But in this case the tax-payers are a long way from seeing any fiscal responsibility from their elected officials. And you don't give more money to those who can't manage the money you've already given them properly.

I didn't have the time to put my thoughts on the article about the local income tax but I would suggest that people read Robert Ted Hinds response here:

Hinds is running against Sten in the upcoming election. I think that this will be a huge election issue for Saltzman and Sten because of their continued support for the tram and their opponents' rejection of such a monumental waste of money for the city's taxpayers.

maybe i'm naive, but 02.Feb.2006 13:53

i have heard that

the city's portion ($3.5 million) has not risen and the cost overruns are being picked up by ohsu and private developers. of course, like i say, maybe i'm naive, but this is what they are saying in public. i am sure if there is a way for them to soak the citizens of the city of portland (even more), they will figure out how to do it.

i think a funny protest action, or more accurately theatre, would be for people to show up at the tram dressed for a day on the slopes, with skis and full winter outfits, to ride the gondola to the hospital. of course, i don't have any of this gear, but i think it would be quite funny to see.

Tramway cost 02.Feb.2006 14:16


The cost of Squaw Valleys new Funitel tramway built about 10 years ago was less than $20 million and that was considered expensive. It is a high capacity tramway capable of carrying thousands of rider per hour and designed to operate in extreame weather conditions.

a couple of candidates to consider 02.Feb.2006 14:18


I just went searching through the various city council candidate websites looking for positions on the tram. This is what I found for people opposing or questioning the tram project:

City Commissioner #2 (Sten)

Robert Ted Hinds

City Commissioner #3 (Saltzman)

Amanda Fritz

Of course, it couldn't hurt to contact the other candidates and get their thoughts on the matter. The current list of candidates can be found here:


some good, lots bad 02.Feb.2006 14:40


The tram is not costing the city $45 million or $55 million and rising. It has so far cost the city $3.5 million. The city got some federal money...urban development money or some such thing for their share. OSU and developers of SoWa have ponied up the rest of the dough, which doesn't neccessarily mitigate the negatives of the relative projects to some such as myself.

Also not frequently published, is the transport capacity of the tram. The compartments hold, I think, around 70 people. I takes about 6 minutes to make a trip top to bottom. The tram is potentially capable moving approximately 800 people an hour. It's been a while since I checked these facts, so I may be off some.

I find troubling, the way in which the SoWa development including the tram, evolved and got rolling. These projects aren't the product of wishes of neighborhood residents or even the general public of Portland in any specific sense. They are the product of intimidation by OSU and greed on the part of developers and the city.

OSU wants to expand its facilities. It threatened the city that it might leave the hill in the absense of city concessions to OSU's expansion demands. Of course, developers are always lurking like vultures in this kind of situation. Cities often rely on developers like Homer Williams to propel capital expansion. The city is in favor of the project because of the taxable property to be gained: A billion or something like that.

As a result, yes, it could be said that while what might preferrably be the city's priority, schools, should be getting the lion's share of the city's funding efforts, the city's investment so far, isn't that great, and, the tax money it makes from the project might arguably help it better provide for schools.

What should also be of concern is that the entire project was conceived and initiated irrespective of the general interests of the directly affected neighborhood residents or the general public of Portland. The project in general is justified on the basis of ecomonic sustenance and growth it represents to the city, OSU, and to money to made by investors and developers. Figure the value of jobs to be created as a balance to this indulgence.

Projects having the potential to so dramatically change the character of the city aesthetically, culturally, visually, and ecomonically, should be put to the voters of the city before they proceed. The people of Portland have a personal interest in sustaining its beauty and livability and the decisions affecting these things should not be held by a handful of power brokers.

The west side waterfront, Lair Hill neighborhood and gorgeous fir covered hills rising up behind it are to be forever marred by mediocre architecture and the unsightly tram. Portland is visually distinct for the great amount of forested backdrop breaking the monotony of steel and glass characterizing many cities. Seattle for example. Methodically though, Portland is allowing this last great legacy to be obstructed or blocked from view.

Examples of this run all the way from west burnside going southeast through Goose Hollow where more and more condos are stacked on the hillside below Vista Avenue. Now we have the tram.

Circulate a petition... 02.Feb.2006 14:57

Pravda or Consequences

In addition to vocally responding to the project's mismanagement, the democratic thing to do is organize a petition drive to cancel the Tram or force a public disclosure of the project's finances (current and forecasted).

Better yet, build Cascadia.

Thank you, TC 02.Feb.2006 16:30

Robert Ted Hinds

Thanks for the kind words regarding my position on the Portland city tax. I agree that the aerial tram has turned into a fiasco and that the fault rests squarely with City Council. I don't think any City Commissioner would be so flippant about signing off on an un-itemized, multi-million dollar project without engineering/architecture fees, any more than they would buy a big old that hasn't been lived in for years without a thorough home inspection.

My website at www.hinds4portland.com presents some very concrete steps I think City Hall must take to help eliminate these conflicts of interest and prevent such problems in the future. Since I'm not backed by powerful donors like Ginny Burdick or have the advantage of incumbency like Sten, I'm collecting $5 donations and signatures for assitance. If anybody would like to support my campaign, you can visit one of my volunteers at the River City Saloon on SW 13th & Jefferson. Ask for Tammey Z (Wednesday-Saturday 6pm to close), who has forms to sign and will collect your donation. They also have good food and drink specials, with a full bar and full kitchen to order from.

More donation sites and fund-raising events will be announced soon. Thank you.

Don't forget the yearly costs of upkeep 02.Feb.2006 18:08

phill dante1129@yahoo.com

I heard it will cost upwards of a million, that's $1,000,000.00 a year to maintain the tram. How long before OHSU get's tired of paying that and pushes it on to the citizens of Portland?

Think of all the health care a million dollars could provide.

they should bury this projects, sell what ever is built on e-bay...with a minimum bid.

Amanda Fritz gets my vote 02.Feb.2006 22:34


amanda fritz was against this from the start, from the neighborhood perspective. so was i. i love the idea of alt transportation but let's have it be PUBLIC transportation if we use public funds for investment. what public will this tram serve anyhow? i live in sellwood. sometimes i want to go to ohsu. will i be driving my car to sowa to take the tram to ohsu? don't think so. we could use light rail down milwaukie. more bike paths and safety on the streets. buses running on used veggie oil from the city hall fryers.

amanda is a neighborhood activist and will speak against these white males in city hall. she is a model of the voter owned election concept that pdx has created. she gets my vote!

Have Sten and Saltzman fired their staffs? 03.Feb.2006 02:57


No? They don't really mean it then, do they?

Stand Up to This! 03.Feb.2006 08:16


I am so glad that folks are talking about this project. It is also blatantly unethical at this point when services for folks in Portland are going down and down as we develop more and more. So, yeah, Potter puts the Tramscam back in PDCs lap---gee, great choice---what's the dif. than the current situation? PDC---the corrupt group that is doing back flips and backhanded deals to get this ship-scrapping company Bay Bridge (from India) to come in (with tax breaks) to further massively pollute the already Superfund site down on the River. Gee, they can't do it in California so they come to Oregon with laxer rules? Great. The Linnton Neighborhood feels betrayed.

Come on Potter and the City Council---you know, folks do see thru this. Portland even has an Office on Sustainable Development. What is up? Let's do something right and positive for Portland---like quit giving away literally UNTOLD MILLIONS of taxpayer dollars to the rich!!! There are deals going on---people will know more soon I imagine. Putting money into the schools is such a whitewash thing to do when, if we didn't have corporate welfare running rampant here---things would be different for all--including the schools. Enuf said for a bit...

Let me be Devil's Advocate 03.Feb.2006 15:33


The cost to the city will not change. It is set at 3.5 million. This is not corporate welfare as OHSU has paid the brunt of the costs. Have you even been up to the hill and tried to get down after work? The roads were built for 1920's traffic. There is one lane of windy road, too narrow for even bicycles. The alternative roads are limited and, during tie-ups, emergency vehicles have a hard time getting up here. The tram is non polluting and non invasive, and residents' home values will increase. As much as I would love to be critical of OHSU, there are very few choices. As much as I think Randy Leonard is one of Oregon's best public servants, more buses won't do it either. This project has been seriously mismanaged and yes, it has been pushed through any opposition, but it has many side benefits.

Hey, Devil's Advocate... 03.Feb.2006 17:38

Yngwie Van Hendrix

That's not really true. It may be $3.5 million from the general fund, but the PDC funding is a bottomless pit, since that goes directly against property tax revenue. I know what the mainstream Oregonian is saying, but it's a half-truth and distortion of how the tram will really play out. The PDC budget is a credit credit card ensured by Portland taxpayers. No matter how you slice it, the Portland taxpayer will ultimately be screwed.

will it work? 03.Feb.2006 18:27


I initially thought the idea of some kind of "tram" was sensible too, but since then I've heard people like the nurses at OHSU's general hospital question how much good it will do. They seem to think that it won't be an effective public transit option, because the embarcation point is too far from central downtown to be useful to most people. They told me that they thought the only purpose of the thing was to ferry elite OHSU bureaucrats and researchers between "Pill Hill" and the big new developments they're building on the south waterfront.

That Much Anticipated Use? 03.Feb.2006 19:24

North Portlander

A capacity of 70 people per trip? I can't envision 70 people at once riding it even during rush hour. And during the middle of the day and during the evening I imagine it will be pretty empty with a lower ridership than Tri-Met's least-utilized routes (except that it costs more to construct and maintain).

Whoever said it was too far from downtown was on the money. It connects to an area under development that is composed predominantly of businesses, condos for the wealthy and services to cater to them. Will there be extensive parking garages and will employees and visitors to OHSU pay to use them rather than park (in many cases) for free on Pill Hill, just up Terwilliger?

I wondered about the sense of this project when it was initiated, knew there must be some sort of economic blackmail going on, and feel awfully sorry for the nearby neighborhoods who have already been chopped apart and marginalized by highway and street projects of the past.

Now we see something of the same marginalization going on in Linnton where the community would like to develop its waterfront and the City would rather have a polluting business that dismantles ships. Gee, that makes sense . . . just finished cleaning up the polluted areas on both sides of the St. Johns bridge . . . time to bring in more toxic waste.

now the cost is $55 million! 04.Feb.2006 17:15


did anyone happen to catch this oregonian article from the friday paper (2/3/06)? it says that the cost has now risen to $55 million and, what's more, all bets are off as to who will pick up the additional millions. (that one critic, whose name escapes me, who said the tram would cost $60 million is looking real smart right about now.)

ohsu, which bitched and moaned and cried (and threatened) that it would have to move out of town if the tram was not built, is now saying they don't want to cough up any more money. (no pun intended.) the wealthy developers, beneficiaries of millions of dollars in tax cuts, etc., are saying the same.

the city council has so far gotten a free ride through much of this minefield by insisting that the city's portion of the tram's cost, $3.5 million, will not change. but this article raises serious questions about that. translation: if you are a portland taxpayer, prepare to be screwed. (again.)

 link to www.oregonlive.com