Isaac Laquedem

Discount airlines restore my train of thought

Charlemagne's column in the January 29 Economist reminded me of my pet (pipe dream?) public works project.  The column describes how that advent of cheap air travel in the European Union has encouraged people to travel between countries almost on whim.  The author interviewed passengers at Stansted Airport (near London) who had paid $95 or less for their tickets.  "What these airlines do is let you live in two countries at once," said a Scottish student who was going to Spain to visit her boyfriend.  On a more macro level, the author said that "The surge in British holidaymakers buying houses in France is closely linked to the rise of low-cost airlines.  And it is not just travellers who feel the benefits.  Entire regional economies have felt the impact.  The city of Carcassonne in south-west France reckons that the 235,000 passengers who arrive every year on low-cost airlines have created over $360 million of extra economic activity."

Our mental "distance map" of the places we go is based not just on physical distance but on what it costs and how long it takes to go there.  And air travel is cheap: the article mentions the amazement of some American backpackers at Stansted whose air tickets from Stansted to Barcelona were no more expensive than their train tickets from London to Stansted.

This is not to say that Portland should try to become a discount air hub and attract European tourists.  We have no Carcassonnes to offer them.  But for about $2 to $3 billion we can shrink time and cost in a different way, which is to build high-speed rail between Portland and Seattle, eventually extensible to Eugene on the south and Vancouver, BC on the north.

Rail service is slow now . . .

A mixed message

As I took the Laquedemitasse to the Auto Show today I wondered if he would understand the irony in our using public transit to go look at SUVs.

A lesson business school doesn't teach

The 60th anniversary this week of the liberation of the most notorious of the Nazi death camps called to mind an incident involving a Genial Old Codger of my acquaintance, who came to this country in the late 1940s and went into business for himself.  Many years later, he got into a business dispute.  The other person threatened to sue the G.O.C. if the G.O.C. didn't do what he wanted.  "I'll spend thousands on lawyers to sue you!  I'll shut down your business!  I'll take all your money!  It'll be the worst thing that ever happened to you!" the second man threatened.

The G.O.C. smiled and softly replied, "I spent six months in Auschwitz.  What can you do that's half as bad as that?"

Margie Boule yields her crown

Tonight at the Fifth Annual Celebrity Spelling Bee of Schoolhouse Supplies, Margie Boule (a two-time winner) of the Oregonian finished a close second, yielding her title as spelling champ to Nicole Vogel, publisher of Portland Monthly.  "Isosceles" was her downfall, and "diaphanous" (not a word usually associated with January clothing for Portlanders) gave Ms. Vogel the crown.

The celebrity contestants included two more members of the print media, Don Hamilton of the Tribune and Jonathan Nicholas of the Oregonian, and two broadcasters, Tony Martinez of KPTV and Pat Boyle from KPAM.  When one of the broadcasters asked the judges if phonetic spellings would be accepted, Mrs. Laquedem commented that the print media people would no doubt outperform the broadcast people.  And she was right: Messrs. Martinez and Boyle hit the ground early in the bee.

Mayor Potter was one of the other good-sport contestants, and Commissioner Adams was one of the two judges (the other was Rob Smith of the Business Journal), leading to a burst of laughter when, after being given a word he found challenging, the mayor intoned, "Commissioner Adams, what bureaus would you like?"

The crowd filled the Melody Ballroom, and the silent auction was a success for the organization and its new executive director, Nick Viele.  Schoolhouse Supplies' mission is to collect supplies for the public schools and then to distribute them to teachers and classrooms.  It has a simple and effective distribution method:  a teacher who needs supplies goes to the warehouse, selects what he or she wants, and takes the goods back to the classroom -- all free.  Mr. Viele said that a $6,000 cash gift can be stretched to buy $30,000 of supplies, good value for the dollar.  And the spelling bee was great fun -- I secretly wished that I was one of the contestants, until the MC called the words "furfuraceous" and "oppugn."  Look for the sixth annual Bee this time next year.

One good thing about Texas Pacific

While I'm on the subject of public utilities (vide yesterday's post), I do like one thing about Texas Pacific's bid, which is that the buyer has a name composed of plain ordinary words.  I compare it to the names of our telephone companies -- Verizon, Qwest, and Cingular -- which read to me like the late-night products of a drunken typesetter.

A modest proposal for PGE

Now that Texas Pacific has admitted what was a latently obvious fact -- that it's buying PGE with the hope of reducing overhead, increasing profits, and selling it for a big profit in a few years, a laudable motive -- how shall the PUC deal with its request to buy PGE?  Let's assume that the City of Portland doesn't put together a plausible bid for the company, and that Texas Pacific is the only serious bidder.

The main reason I don't like out-of-state ownership of our public utilities is that Portland has lost most of its public company corporate headquarters (PGE, PP&L, Fred Meyer, Willamette Industries, Georgia-Pacific, Louisiana-Pacific, and U.S. Bank, to name a few of the last 20 or so years) and not replaced them.   It makes sense for electric companies to be headquartered where their customers are, and there's little economy of scale in combining them into multi-state conglomerates.  (Does anyone remember PEPCO?)

Here's Isaac's suggestion to the PUC:  allow the Texas Pacific bid to go forward, but require Texas Pacific to offer PGE for sale as a public offering -- not a negotiated private sale -- no later than five years from now, and thereafter prohibit any further acquisition.  If you can't bring PGE back to Oregon now, bring it back later.

More on the Fliedner Building

The Fliedner Building at SW 10th and Washington (see yesterday's post) deserves a little more attention.  For many years, from 1943 or so to maybe 1990, Portland Luggage Company occupied the corner store.  (There's a picture of the building in the 1940s at the website of Portland Luggage.)  Its principal, the late Bill Simon, used to do radio advertisements ending with the tag line, "If you don't come to see me today, we both lose!"  The store has moved and expanded, and his children now operate it.  The Fliedner Building was built in 1907 and was known initially as the "New Fliedner Building" (perhaps it replaced an older one), and it was then the home of Pacific Chiropractic College, now part of Western States Chiropractic College.  As befitting its location near the brewery district, the J.W. Seavey Hop Co. maintained its offices on the fifth floor during the 1940s.

To the west of the Fliedner Building is the Dinihanian Building, the former home of the M.E. Dinihanian oriental rug company, a business owned and operated by Megrditch Dinihanian (1883-1984) for most of his very long life.  More interesting is the building to the north, now unnamed but formerly called the Insurance Service Building.  It's inconspicuous from the street, fitting into the middle of the block.  What makes it unusual is that it runs through the middle of the block all the way to 11th Avenue, where there's access to underground parking.  The Knower of All Things says that it's the last building built in downtown Portland without a building permit, something that if true deserves a historical plaque on the sidewalk in front.

Also, the light is better under the lamppost

The story goes that the bus company hired a new driver and sent him out to work the thinly-traveled Riverside Drive route.  The first day he came back with $50 in the farebox.  The second day he came back with $46.  The third day he came back with $53.  The fourth day he came back with $750.

"What happened?" said the supervisor.  "We've never had that much money on the Riverside Drive run in an entire week, let alone one day."

The driver replied, "Hardly anyone was riding on that route you sent me on, so today I took the bus over to Northwest 23rd and drove there all day.  That street's a real gold mine!"

This story came to mind when I read the Tribune's story Friday about the Portland Development Commission and its sort-of subsidiary, the Portland Family of Funds.  PDC formed PFF to acquire and administer about $100 million in New Markets Tax Credits, a federal program designed to encourage development in poor neighborhoods.  (The article calls them "economically troubled neighborhoods," but let's be direct.)  PFF started a project at NE Alberta and Killingsworth and another at NE King and Shaver, but they haven't gone well.  PFF itself pulled out from being a tenant at one of them and has moved into rented office space downtown.  Now it wants to buy the Mekka Building (better known as the Fliedner Building) at 10th and SW Washington and renovate it for its own offices.  The reason for changing its focus from North and inner Northeast Portland to downtown?  It's easier to make money doing real estate projects downtown than in the poor areas of Northeast Portland.

That's a great reason for a private developer to do projects downtown.  It's not such a good reason for a government agency, or quasi-government agency (I still can't figure out what exactly PFF is), to lose sight of why it was formed.

The Homeric irony of Mr. Bush's inaugural party

Thirty years ago George Bush might have dreamed that some day his friends and the government would spend $40 million on a party in his honor, but never that he would have given up alcohol before the first corks were popped.

Of ports and pilots

Maritime pilots aren't often in the newspapers.  This month has been an exception, with the Tribune and the Business Journal publishing stories about two related efforts by the Ports of Portland, Vancouver, and Longview to change the business of river and bar pilots on the Columbia River.

[Digression: all foreign ships by law, and virtually all USA-flagged ships for safety, that transit the Columbia River must hire a bar pilot to cross the Columbia River Bar between the ocean and Astoria, and a river pilot to pass between Astoria and points upriver (Longview, Kalama, Vancouver, or Portland).  The association of bar pilots includes 20 pilots and dates back to 1846.  The association of river pilots includes about 45 pilots and dates from about the same time.  They may be the two oldest continuously operating businesses in the state.  The state Board of Maritime Pilots sets the rates that pilots may charge.]

The three port districts (the Ports of Kalama and Astoria apparently aren't participating) want to reduce the number of bar pilots, which they believe would save ships about $500 per trip to Portland.  The Port of Portland has also made noises about consolidating the river pilots and bar pilots so that one pilot, instead of two, would pilot a ship from the ocean to Portland, charging one pilotage fee instead of two.  The upriver ports (Longview, Kalama, Vancouver, and Portland) are the only ocean ports on the west coast where a ship must hire two pilots instead of one to get to the port.

A run-of-the-mill ship pays maybe $10,000 or $12,000 in pilotage fees . . .