Fool Me Once, Shame on You...

Randy Leonard

Tram

Ahhhh. Sunday morning. A time my wife and I love to sit next to our tree filled windows and linger over the paper with a good cup of coffee.

“What’s this” I thought, noticing the Randy Gragg article entitled "The Trouble With The Tram".

“Hmmm. I think I'll read that one first.”

“The political strutting about the rising costs of Portland's aerial tram has been great theater. But it doesn't help anyone understand why the tram has become so expensive, much less whether it's still worth the money. “

“Good”, I said to myself as I continued to read, “OHSU’s story that they are innocent victims of the spiraling costs of the tram is being seen for what it is…another public relations fabrication intended to divert attention from their primary role in the design and construction of the tram.”

I continued reading Randy’s piece.

“City Commissioners Randy Leonard and Sam Adams have led the follies. Now everyone is joining in, vilifying city staffers, consultants, the architect and each other for the tram's flight to $55 million. “

I shook my head realizing that, as transparent as OHSU has been to me these past few months, they have clearly succeeded in confusing even those who should know better.

Randy’s very next sentence is, ironically, the inspiration I needed to write this piece.

“Time for a reality check.”

No shit, Sherlock.

I have, in fact and in the face of withering criticism, defended both the North Macadam/South Waterfront development and the tram (see my comments toward the end of this piece on Jack Bogdanski’s site ) …notwithstanding its most recent problems.

There has been one constant presence throughout the conceptualization, design and implementation of the tram. Dr. Peter Kohler's top lieutenant, Steve Stadum ., on behalf of OHSU, was a member of the PATI board , the entity that actually managed the design and construction of the tram.

As the PATI web page states

“The City of Portland has empowered PATI to be the project manager responsible for initiating the design process, including an international design competition, and for seeing the project through to completion”.

The real issue for me has been the purposely misleading PR campaign (pdf) undertaken by OHSU to deny any responsibility for the intentionally understated cost (pdf)presented to the council.

The Oregonian's Ryan Frank reported in his January 12, 2006 article on the tram and OHSU's role in the project as follows;

“Davis grew nervous as the guesstimate looked more like a guarantee.

"Someone grabbed onto that figure like the word of God," Davis says. "But there wasn't a whole lot that went into that number that was precise."

He called Stadum, a tram board member and a lead negotiator on the deal, to clear up the math. Davis says he left a voice mail at Stadum's office warning that the budget was probably $5 million to $8 million low. Stadum, for his part, says he doesn't remember the message” (Oregonian, 01.12.06).

It is clear to me, unless one believe's Mr. Stadum's defense that he "...doesn't remember the message", that OHSU hid from the city council that they knew the final cost of the tram would be much higher than what was represented to us at the time.

Knowing that, it is shocking that a man of Dr. Kohler’s caliber would actually write something as misleading as he did here understanding as I do that OHSU was part of the cast of characters who intentionally misled the city council (pdf).

I am not trying to blame Dr. Kohler, Steve Stadum, city staffers or anyone else for that matter. I am just explaining what I understand the facts to be.

If OHSU adopted the more rational approach suggested by Issac Laquedem, I would have been more open to their arguments for increased city financial help.

However, while I will stick by my original commitment to building the tram, that commitment was based on a city contribution of $3.5 million. That contribution was based on a cost to build the tram that was represented to be $15.5 million...a number OHSU at the time knew to be wrong.

I now know that vital information -the cost of building the tram was going to be much higher than promised- was withheld from at least three of us on the city council by a number of parties, including OHSU. I can only conclude that information was withheld from my colleagues and me to avoid jeopardizing our “yes” votes on the tram.

I cannot justify to taxpayers why I would reward OHSU’s bad behavior by now agreeing to spend more money than what I originally agreed to, a vote I can only presume OHSU counted on getting when they became part of the deception that led to the council’s agreement to construct the tram for $15.5 million.

When Commissioner Sam Adams discovered all of this, he did what some were complaining should have been done early on before Sam was even on the council. Sam took control.

If I have not said it publicly before, thank you, Sam. While I have learned that anytime one challenges the status quo you should prepare yourself for an onslaught of negative criticism, you did the right thing.

As Sam said in this post, the councils support of the tram cannot be viewed as a blank check.

Especially given, I would add, OHSU's attempt to deceive us.

Comments

  • (Show?)

    Excellent piece, Randy.

    What I don't understand is what Gard + Gerber and OHSU think the end game is here. Every time they spin this private sector meltdown as a failure of the City, it's that less likely that the city will reach any deeper than the $3.5 million already committed to this politically difficult project.

    The PR and spin coming out of OHSU puts the council in a box - precisely opposite of their own interest. Assuming they want more public contributions, right? Public relations question: If the public buys into this "council that can't shoot straight" narrative, what's the motivation for any commissioner to make a tough vote for more tram money?

    I think this really calls into question the competence of this pr effort (rationally analyzed here). OHSU should seriously consider restructuring it's public relations strategy and frankly, trading up firms.

    Without getting too off track, let's recap some golden G+G moments just from the past 2 months: 1) After spending $350,000, fails to place VOE repeal on May ballot. 2) Promotes a conspiracy theory pitting the credibility of paid petition gatherers against the League of Women Voters. Talk about taking a knife to a gun fight.. 3) PR "wiz" Brian Gard is featured in an unflattering Sunday profile in the state's largest paper. What's that saying about having a fool for a client?

    Anyway, there's more, but you get the point. OHSU should cut their losses and consider reshuffling the public relations deck.

  • Randy Leonard (unverified)
    (Show?)

    "Every time they spin this private sector meltdown as a failure of the City, it's that less likely that the city will reach any deeper than the $3.5 million already committed to this politically difficult project."

    Exactly, Charlie. The only rational explanation is what is commonly known as "group think" or, somewhat less flatteringly, the "kiss ass" syndrome.

    I have imagined a conversation between Dr. Kohler and Steve Stadum that could have gone something like this;

    "Ring, Ring"

    "Steve here"

    "Ah, yes, Steve, this is Dr. Kohler"

    "Sir, yes, how are you doing, sir?"

    "Fine, Steve. Can you run over to my office? I have a couple of things I want to talk with you about"

    "Yes, sir. I will be right there"

    Steve rides his bike from the annex over to Dr. Kohlers' suite of offices.

    "Steve, my boy. Good to see you"

    "It's very good to see you Dr. Kohler. My, you must be working out. You look so...svelte!"

    "Oh, Steve, it's just those boys down in research. They came up with this new pill...Oh, but I digress. Steve, there are couple of things I want to talk with you about"

    "Yes, sir"

    "First, I am still thinking about that whole Chief Administrative Officer job we discussed."

    "Yes, sir!"

    "Second, I need some advice on the whole cost overrun thing on our tram"

    "I will do my best, sir"

    "You know, Steveo, you really blew the whole PATI board thing. Now our ass is on the line with these cost overruns."

    "Sir, I am really sorry about that. I will do anything to make that right. Sir, I do mean anything"

    "All right, all right. Settle down, Steve. No used to you losing your dignity over this thing. Besides, its a few million measly bucks. But hell, let's have a little fun with it.

    Here's what I'm thinking, Steve. We start spinning the story that the city blew this thing. We send out a few emails to 10,000 of our closest friends saying "Oh My God, you know how the city is. Well, they've done it again. Completely mismanaged the whole thing. Hell, we didn't know what was going on. Christ, now were stuck with the bill."

    "Oh, Sir. I like it. The city is sooo the easy patsy for that kinda thing. I even heard they may have been part of the Kennedy assassination. He He"

    "Oh, good one, Stevey. But let's stay focused. Now, it's settled, we will start spinning this line, Christ, the editorial board will eat it up. Hell, on second thought, they may even buy your Kennedy deal"

    "Sir. Of all your brilliant ideas. This one is the best. The city will be so embarrassed they will have to come up with the extra money to pay for our...ummm, I mean, their screw up"

    "Now you're catching on, Stevearooni"

    "Sir, it will work!"

    "OK then, Steve. Give the boys over at PR a call and get them to work"

    "Yes Sir! Right away Sir!"

    "Oh, and Steve"

    "Sir?"

    "That promotion?"

    "Sir?"

    "It's yours"

    (Weeping hysterically now) "Thank you Sir!"

  • (Show?)

    Randy,

    I think we have to build it now, don't we? The cost of ending it is too great. As well as the damage to the City's image.

    And then the political folks take the political fallout. You will be protected; Salzman and Sten will take the bulk of the heat.

    Then you, and Sam, and Potter, and whomever else is on the Council, make damn sure that this kind of fiasco doesn't ever happen again.

  • (Show?)

    Good stuff Randy. Keep up the good work and give a shout out to our pal Sam Adams. You guys rock.

    Daylight=Disinfectant and all of that..........

    <hr/>

    It's kinda cool to see this platform (blogs) being used as a debunking tool.

    And yes They are reading every word........

  • Randy Leonard (unverified)
    (Show?)

    Paul-

    The tram is under construction and will be finished.

    The current controversy is good, old fashioned bargaining.

    OHSU is just trying to get us to pay a cost they should pay.

    I am not biting. I am not even nibbling.

    It appears as though at least two of my colleagues will stick with me through the misinformation campaign OHSU is conducting.

  • Justin (unverified)
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    Aaah, you mean you aren't going to back up a tow truck to the 500,000 ton tower? Darn, and here I was, getting my camera ready and everything!

    ;)

  • sasha (unverified)
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    First of all, I'd like to recognize that Randy Leonard is a city councillor like no other. I disagree with much of what the dude says and stands for, but there ain't anybody else I know of in the game who is willing to explain himself like Randy does.

    That said, Randy, you make no sense here. It was not OHSU who figured out that the early cost estimates were off. It was the neighborhood. They raised the issue time and again, and told the city about it time and again in all the sham public hearings that preceeded the railroad job.

    The city turned a deaf ear. The fix was in. Neil decided already.

    Randy, to try to retail to us now that the city council was a victim in this thing is an insult. Bullshit, Randy. You know it.

    I understand trying to cover your ass. It ain't gunna work this time buddy. I know you weren't on the council from the beginning of this fiasco, so maybe you have some plausible deniability. But don't try to tell us that the council was mislead here and that the true costs weren't known until OHSU fessed up.

    What do you think we are, Republicans?

  • (Show?)

    Or if we're searching for rational explanations, maybe the conversation went like this:

    "I love it sir - brilliant. But if we go into CYA mode and pin this on the city, won't we be out of luck getting more money from the council? We can stir up the public, but won't we just lose the vote at least 2 to 3? I just don't get it."

    "Ah... but we'll only lose the vote with the current council. Switch a vote and we're in business."

  • (Show?)

    It was not OHSU who figured out that the early cost estimates were off. It was the neighborhood.

    Out of curiosity (honest question here, not implying one answer or the other), did the neighborhood actually know the estimates were off -- as in have proof, even of a deductive sort -- or did they merely suspect and/or assume they were?

  • Zarathustra (unverified)
    (Show?)

    OHSU seems to be banking on the fact that the majority will be distracted by their spin. We should counter with the kind of simple, no-thought-involved soundbite that they would use and repeat it ad nauseam when dealing with the press. OHSU is a poor citizen. Period. Internal debate will happen anyway. When OHSU are (if they are) talking facts, we can talk facts. But when they're just cranking out PR bullshit, we should respond in kind. Should be our mantra: "We have no opposition to the tram per se; we just wish OHSU would become a responsible corporate entity."

    Hell, that's the way to respond on PGE, QWest issues as well. "We don't have anything against a privately owned utility provider, we just wish PGE would be a responsible corporate citizen". "QWest, no discussion about anything until you pay the franchise tax and be a responsible corporate citizen". From off-lease dog parks to Wal-Mart, OHSU and PGE, Randy Leonard's position seems to be to consistently ask for responsible citizenship. If he seems biased right or left, then I guess that just reflects the natural tendency of those on the right to only act responsibly with regard to their own immediate, perceived interests.

  • MarkDaMan (unverified)
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    The current controversy is good, old fashioned bargaining

    In all due respect, sir, this is not good. It isn't good for the city, it isn't good for OHSU.

    There should be a level of respect when speaking to OHSU, and OHSU should be showing the same level of respect. As mom always said, "Just because one isn't playing fair, that doesn't mean we bring ourselves down to that level." As our elected leader, Randy, could you please offer something more substantive than backing up a truck and pulling out the support poles. That isn't the Portland spirit, it's just nasty talk feeding the BoJacks of Portland.

    I voted for you to solve our city's problems, not create more while in office. We don't want to alienate our largest employer, an employer that brings more high paying jobs than just about any other employer in Portland. In order to compete in the 21st century economy we need a strong R&D University, we need to use our strong relationships with OHSU and PSU to grow the connections between the two; offering Portlanders a stronger higher education system.

    I fear that in all this public bickering over a tram today, that the relationship the city should be enjoying with OHSU will be frosted for many tomorrows. Randy, I'm not sure what you or everyone else are trying to figure out. The cost overruns are clear, the mismanagement in the beginning is clear. How inappropriate having a ski lift designer come up with initial cost estimates is clear. Your diatribe above isn't.

    After this brouhaha about who said what, when and where dies down, what is your solution Randy? Finger pointing aside, what are you proposing?

  • (Show?)

    Randy can speak for himself, but I think what he's proposing is pretty straightforward and totally defensible: the city follows through with its $3.5 million dollar committment, OHSU and private interests cover the rest. That's what the agreement was, and that's what it's worth to the city.

    There's a lot of demagoguing on with this issue, and I appreciate that Randy isn't automatically caving to OHSU's spin machine nor just simply saying, "No Tram. No Tram."

    I'd like to see the project succeed and the tram built, but not at any cost. Not to get too Nixonian on folks, but I do think there's a "silent majority" out there who feels similarly.

  • The One True b!X (unverified)
    (Show?)

    ...did the neighborhood actually know the estimates were off -- as in have proof, even of a deductive sort -- or did they merely suspect and/or assume they were?

    C'mon, someone out there must have an answer to this. It's important, I think, because if the neighborhood had actually laid out a bunch of the early data or something and argued that it was clear something was amiss, that's one thing.

    But if it was simply that the neighborhood was going, "well of COURSE they are trying to screw us" then it's something else. The fact that broken analog clock is right twice a day doesn't mean it's saying anything useful from an informational standpoint.

  • Randy Leonard (unverified)
    (Show?)

    Lets be clear about one thing, MDM. OHSU has adopted an aggressive strategy to mislead the public about the reasons for the dramatic understatement of the cost to construct the tram. Thier strategy, in my opinion, is to trash the city in an effort to not look bad to their private sector funders.

    You are right that we should be respectful of one another. However, respect is not forthcoming to those who use their leverage (jobs in the community, etc.) in our community cynically.

    I appreciate your voting for me in the past. If you recall, I promised to put the interests of ordinary Portland citizens above all others first. That sounds good, but it isn't always a pleasant task to follow through on that commitment.

    The current controversy with OHSU is an example of that.

    The solution to the current controversy is simple. OHSU and the developers should pay all increased costs of the tram above what has been represented to the city council -and Portland taxpayers- in the past.

  • Jerry (unverified)
    (Show?)

    OHSU's public relations will be having more problems than the partial list in Charlie Burr's post in the very near future. Stay tuned.

    Randy, please don't let the city staff (PDC. PDOT, etc) continue being a part of the misinformation on the taxpayer costs to build the tram.

    As many blogs have pointed out, the tram is costing taxpayers well over $21M at this present time in direct, attributed costs. Remember, even Adams attributed $11M in taxpayer costs just 6 weeks ago in his O commentary; and left out many other direct costs.

    Also I politely agree with most of Sasha's comments about the Council knowing of the cost overrun issue. Many times before and after your first date on the Council, CTLH, Stop the Tram, Homestead, Southwest Neighborhoods Inc. cited the cost issue.

    But most importantly, (this helps answer blX's question) as I've posted before, in late 03 the PATI Board's own Citizen Advisory Committee with SWNI wrote a three page letter to Council. They strongly asked for a delay because of the cost overruns that were becoming apparent even in the summer of 2003. The delay was requested to give time for further analysis of the cost overrun issue. That was two years before the tram construction began in the late summer of 05. There are many other examples of Council knowing/or should of known of these cost overruns.

    But you are right, PATI and its CAC had several representatives from OHSU. They knew it too. And I agree with you that OHSU's blaming Council is not entirely fair. $3.5M should be the taxpayers TIF money limit.Period. With all the other "gimmies", rezoning of the entire NM that increased heights and density by six times, that has been OHSU's (and others)windfall that far exceeds their portion of the tram costs.

  • PanchoPdx (unverified)
    (Show?)

    Funny how the "we have to finish what we started" message for the Tram parallels the emerging hardline conservative position on staying the course in Iraq.

    We've gone too far to turn back now!

    What kind of message will we send to radical islamicists {other public/private developers} if we don't follow through?

    Will the Tram become Portland's Vietnam?

    Oh, the humanity...

  • (Show?)

    Bad analogy, Pancho. Eventually the tram will be built if we stay the course, and the benefits will still accrue--they will just be costlier. In Iraq, not only is it not clear that we are moving towards our goals, it's becoming clearer that we are moving AWAY from them by continuing to stay there.

    Is spending $55mil and getting the tram better than spending $22mil and getting zip, nada, nothing? That's the question.

  • Marvinlee (unverified)
    (Show?)

    Actions speak louder than words when it comes to history. Completion of the tram now will send a message down through the future that, yes, you really can lie and mislead about project costs because in the end citizens through one avenue or another will be forced to pony up the dollars.

    All the post-construction rightous rhetoric in the world after the tram is forced through will not wipe out the historical lesson that lying pays off big time in Portland.

    None of the present parties now seeking cover has any legitimate excuse for not earlier seeking out cost information and asking probing questions.

  • Ross Williams (unverified)
    (Show?)

    Will this mistake get repeated? Probably, the city council including Randy don't seem to have learned very much from it. While I can understand not being happy that OSHU is blaming them, OHSU has always looked out for itself. The voters ought to be unhappy that the council wasn't looking out for everyone else in this project.

    The real question is how did this project get approved without careful scrutiny of the budget? The answer is that the citizen participation process was designed to manage the expected opposition from neighborhood groups to what OHSU wanted, rather than to involve the public in the decision and force a thorough vetting of OSHU's proposal.

    The mayor and city leaders signed on to the OSHU preferred solution before they had even defined the problem. The point was to buy OSHU's committment to the city and specifically to North Macadam. The result was that any reservations or alternatives that were suggested were seen fundamentally as anti-tram. Hard questions were not welcomed and careful scrutiny of the projects details were seen as efforts to kill it.

    In that environment, it is simply unrealistic to expect city staff to carefully scrutinize the budget or to raise red flags if the nubmers didn't add up. The city staff who walked into the council at any point in that process and said that it was going to cost over 3 times the original estimate would have been handed their heads. It likely would have killed the project no matter what the consequences with OHSU. No one who works for the city was going to gain by frustrating its elected leaders, even with the truth.

  • Isaac Laquedem (unverified)
    (Show?)

    Thank you, Commissioner Leonard and Mr. Burr, for the kind reference to my thoughts on how OHSU should respond to the tram cost overruns. I agree that its current PR approach isn't working. Interestingly, a few days ago Mr. Stadum gave a short, off-the-record talk about the tram project and South Waterfront at the Mausoleum Club, and if he would adopt the same tone in public, the City and OHSU might get along a lot better.

  • Randy Leonard (unverified)
    (Show?)

    It would have been interesting, Issac, to have heard him respond to how he squares those conciliatory remarks with Dr. Kohler's letter sent to the business community.

  • Clark (unverified)
    (Show?)

    "I think we have to build it now, don't we? The cost of ending it is too great. As well as the damage to the City's image." ~Paul

    Sounds like Iraq doesn't it?

    <h2>The city shouldn't be paying anything for the tram let alone 3.5 million. The neighborhood got screwed. Traffic will be like Seattle after the South Waterfront Project. The Pearl has no affordable housing, will the South Waterfront area designed by Homer Williams be like that? This project is just for a few luck enough to get some of the meat to make lots of money. Please don't dismiss me. I make a lot of sense. The 2nd downtown will create a lot of traffic on the already overcrowded Macadam. It looks as if affordable housing will be minimal. A lot of shady deals are involved in this project. All of Portland (the tax payers) are having to pay for a tram that a few will use. The thoughtfulness of this project seemed to be overruled by the sight of profit.</h2>

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