The Tulsa Precedent
This is the third essay in a series on the Keller Auditorium and Portland State's Performing Arts and Culture Center. The first, “Before the Keller Goes Dark”(May 23), made the labor case for the project. The second, “From the Arts Complex to the Academic-Industrial Complex” (July 8), asked what the project means for a university in retrenchment. This essay examines the public balance sheet. Three essays, one project, three rooms: the stagehands', the faculty's, and the taxpayers'.
A university does not ordinarily launch a $750 million capital campaign in the same year it books a $31 million deficit, cuts $20 million from its budget, lays off 40 staff members, and freezes hiring for three years. In October 2025, the University of Tulsa did. Campaign materials called the moment an “inflection point.” Megan Zahneis’s reporting in The Chronicle of Higher Education makes clear what the phrase leaves unsaid.1
In this context, “inflection point” is a euphemism for a transaction. The institution asks a new set of donors to underwrite recovery from self-inflicted damage. Tulsa arrived there by a route Portland State has now entered, and the record is already public.
Zahneis follows a string of presidents, each of whom left the next one with a crisis to manage. Steadman Upham pursued expansion through construction. Gerard Clancy answered the resulting strain with a plan that cut academic programs, branded True Commitment, which reduced offerings by 40 percent and drew no-confidence votes and national criticism. Brad Carson reversed much of that austerity and staked his presidency on an ascent to R1 research status, funded by ambitious spending. Rick Dickson, the interim president who followed, returned the institution to austerity and a narrower mission. Four presidents, one recurring pattern. Each administration spent or cut the university into a condition its successor was left to undo.
The first of those crises traces back to a construction boom. During the expansion under Upham, branded Embrace the Future, the campus grew by more than one million square feet, including a 70,000-square-foot performing-arts center. The campaign exceeded its fundraising goal. The buildings cost more than the campaign raised for them.
According to a 2022 presentation that Carson later gave to members of the Board of Trustees, a document the university disputed, Tulsa spent $370 million on capital expansion while raising only $280 million for construction, and borrowed from its restricted funds to cover the difference. The gap became a nearly $62 million unfunded liability.1 In 2016, as deficits mounted, Upham suspended the university’s contributions to employees’ retirement accounts and cut 43 staff positions. The people who worked at the university helped pay down the cost of the buildings raised while the money was flowing. The hall goes up in the boom. The faculty pay for it in the bust.
Portland State University has reversed the order. In June 2025, the Oregon Legislature authorized $137.5 million in state bonds for Portland State’s Performing Arts and Culture Center through Senate Bill 5505, and the university advanced the project.2 A market feasibility study commissioned by the city concluded in January 2026 that Portland could not support two large venues capable of hosting touring Broadway, and it recommended the PSU site.3 The university pressed forward. Nine months after the bond authorization, Portland State announced formal retrenchment under President Ann Cudd to close a budget deficit. Its final plan, released in July 2026, confirmed 36 faculty layoffs. The promise was downtown revival; the result was a monument advanced and a faculty reduced.
Tulsa expanded during the boom and cut during the bust. Portland State proposes to cut first and build anyway, into an economy that offers no boom to build into.
Oregon’s unemployment rate was 5.2 percent in June 2026, close to a full point above the national rate of 4.2 percent, and it has held at that level for a full year. Total nonfarm payroll employment fell by 8,500 jobs over the year, a decline of 0.4 percent, with losses in both the private sector and government.4 Manufacturing shed 10,000 jobs, a contraction of 5.6 percent and the steepest of any major industry. Health care and social assistance added 14,000, the one substantial gain, and that gain reflects an aging population rather than a widening market for discretionary tickets.
The state's own forecast promises no rescue. The Office of Economic Analysis called its June outlook one of slower growth and revised anticipated job creation downward. Oregon grows more slowly than the nation, and the state projects population growth averaging 0.4 percent a year through 2035.5 The audience base for a landmark venue is not expanding; it is close to flat.
Oregon now closes more businesses than it opens. Figures from the U.S. Bureau of Labor Statistics, first reported by The Oregonian, show business closures outrunning openings by 1,700 in 2024 and by roughly 6,000 through the first three quarters of 2025.67 The imbalance is the longest the state has sustained since the Great Recession.8 Bingjie Kong of the Oregon Employment Department attributed the pattern to a cooling labor market and to conditions that make new businesses reluctant to enter. A state that shutters more establishments than it opens is shrinking the tax base and consumer spending that a new venue would require.
Portland exhibits the starker version of the decline. The Portland Metro Chamber reported that the region lost 8,800 jobs in 2025, the fourth-worst performance among the nation’s metropolitan regions, and that Portland has fallen to second from last in national real estate outlooks.9 Intel, the region’s largest private employer, has carried out repeated rounds of layoffs at its Washington County operations.
Downtown, the district on which a new center would depend, has not recovered its weekday economy. Even after two quarters of slight improvement, downtown office vacancy stood at 36.5 percent in the second quarter of 2026, more than triple its level at the end of 2019,10 and the Chamber’s own analysis found that even a full return to pre-pandemic office attendance would raise downtown foot traffic only to about half its former level. Hybrid work is a lasting condition, not a temporary one. A 3,000-seat touring hall depends on discretionary spending, tourism, and downtown recovery accelerating, and every current indicator points the other way.
The would-be owner of the hall just laid off 100 people. The city closed a record general-fund shortfall of $170 million for the 2026-27 fiscal year, discontinuing about 140 positions in the budget it adopted in June.11 Oregon ArtsWatch has reported that the city faces more than $1 billion in arts, culture, and entertainment infrastructure needs on which it has yet to hold a full public hearing.12 Metro has moved to return management of the Portland’5 venues to the city by mid-2027. The proposal would add a capital obligation of several hundred million dollars to a portfolio the city cannot presently maintain, in a budget cut to the bone.
Supporters appeal to necessity. The Keller Auditorium, which opened in 1917, does not meet current seismic standards, and a prolonged closure would strip Portland of its only stage able to host touring Broadway and the revenue those shows return to the smaller halls. The seismic hazard is real. It establishes that the region needs a working large venue. But it does not show that the region needs a new city-owned hall, estimated at up to $447 million, rather than a renovated Keller at about $290 million.1314 The feasibility study the university welcomed found no market for two large halls at all. Necessity is being enlisted to justify the price, and the two are not the same claim.
The proposal should be seen in full context. The Performing Arts and Culture Center would occupy four acres at the southern edge of downtown, the largest developable parcel in the central city, two blocks from the Keller: a 3,000-seat Broadway house owned by the city, a smaller academic venue for the university, a hotel, and parking, with supporters projecting activation of seven surrounding blocks.
On July 28, Portland State asked the council’s City Life Committee to commit by December 1 to a project agreement and an initial city investment of $44 million toward a 2030 opening, citing $12.6 million in early private pledges. Testimony against the resolution put the missing numbers on the record: a combined cost for the new complex and a renovated Keller approaching $1 billion, no identified funding source for the city’s share, and a feasibility study that weighed one large hall against the other but never analyzed the two-venue plan the council is being asked to approve.14
A constructive alternative exists, and it comes from the administration itself. In her December 2023 report for the governor’s Central City Task Force, President Cudd outlined what Portland State could contribute to downtown: educational spaces redesigned to better connect with the community, upgraded existing buildings, expanded childcare in the central city, and affordable student housing in the core.15
The university’s $137.5 million in state bonds could support that agenda. An academic hall of 800 to 900 seats, the size the university’s own programs require, along with renovation of its existing teaching spaces, would give students and faculty the facilities they now lack. Meanwhile, the city could fund the least expensive repair of the auditorium it already owns, estimated at $236 million, to keep the Keller at full capacity.14
The same crews that raise a theater can raise a dormitory or renovate a classroom, and the workforce agreement the university has already signed would cover that work as well.14 The remaining objection is continuity, the question of where touring Broadway performs while the Keller is repaired, and it has remedies far cheaper than a new hall: phased construction or a temporary stage, possibilities the committee testimony said the feasibility study set aside without serious analysis.14
Redirecting the bonds would require new legislation. The proposal on the table asks for more: a public university entering the commercial theater business amid shrinking enrollment, and a city assuming an obligation of several hundred million dollars for which it cannot name a funding source.
The comparison to Tulsa raises one fair objection, and it deserves a full answer. Tulsa is a private university that spent its endowment and borrowed against its restricted funds. The Performing Arts and Culture Center is a joint project: the large hall would belong to the city, and Portland State’s share is financed by state bonds authorized through Senate Bill 5505 rather than endowment draws. The financing instruments differ, and the difference is not cosmetic.
The difference ends there. Capital ambition creates a hidden liability; austerity covers it; a new campaign begins in the middle of the damage and rebrands that moment an inflection point. That sequence holds whether the money is endowment or bond, private draw or public authorization. What Portland State changes is the order, and that makes the problem worse. Tulsa at least completed the boom before the bill came due. Portland State has begun eliminating faculty before the complex is built, in a state forecasting slower growth and a metropolitan economy shedding jobs. The university reaches the austerity stage first and proposes to stack the capital ambition on top of it.
A genuine budget emergency suspends discretionary ambition until the crisis passes. When an administration invokes emergency language to eliminate departments while advancing a monumental building, the emergency is not forcing the cuts; it is excusing them. The administration will reply that the hall is an investment rather than an ambition, a bet on enrollment and downtown revenue. The preceding figures price that bet: a flat population, a shrinking metro, and a market that the city’s own study says cannot support two halls. Tulsa is the clearest example of where that bet leads. The performing-arts center still stands. Several of the academic programs cut to service the boom that raised it do not. The building outlived the faculty lines.
Portland State has that record in front of it, published nationally, before the concrete is poured. Tulsa is not a hypothetical about what could occur in Portland. It documents what happens when the same sequence plays out elsewhere, for the same reasons, under the same euphemism. The hall goes up in the boom. The faculty pay for it in the bust. Portland proposes to skip the boom and keep the bill.
SOURCES
1. Megan Zahneis, “The University That Couldn’t Stop Reinventing Itself” (online title: “The Ambition Trap”), The Chronicle of Higher Education, December 2, 2025 (January 2, 2026 issue). https://www.chronicle.com/article/the-ambition-trap
2. Portland State University, “PSU-Led Performing Arts and Culture Center Builds Momentum With $155 Million in State, City and Private Funding,” June 30, 2025. https://www.pdx.edu/news/psu-led-performing-arts-and-culture-center-builds-momentum-155-million-state-city-and-private
3. “Plan for two-venue Keller Auditorium, PSU Performing Arts Center challenged,” Oregon ArtsWatch, January 27, 2026. https://www.orartswatch.org/future-of-keller-auditorium-psu-performing-arts-center-challenged/
4. Oregon Employment Department, “Oregon’s Unemployment Rate Remains at 5.2% in June” (news release), July 15, 2026; data at QualityInfo.org. https://flashalert.net/id/OreEmployment/189753
5. Oregon Office of Economic Analysis, June 2026 Economic and Revenue Forecast, released May 20, 2026. https://www.oregon.gov/das/oea/Documents/OEA-Forecast-0626.pdf
6. “Oregon business closures outnumber openings — and the gap is growing,” Oregon Insight, The Oregonian / OregonLive, July 12, 2026. https://www.chronline.com/stories/oregon-business-closures-outnumber-openings-and-the-gap-is-growing,405346
7. U.S. Bureau of Labor Statistics, “Business Employment Dynamics — Oregon” (second quarter 2025 data). https://www.bls.gov/regions/west/news-release/businessemploymentdynamics_oregon.htm
8. “More business openings than closings in Oregon in last decade, despite economic stigma,” Oregon Capital Chronicle, April 7, 2026. https://oregoncapitalchronicle.com/2026/04/07/more-business-openings-than-closings-in-oregon-in-last-decade-despite-dour-economic-stigma/
9. Portland Metro Chamber, 2026 State of the Economy and 2026 State of Downtown & the Central City, February 2026. https://portlandmetrochamber.com/resources/2026-state-of-the-economy/ and https://portlandmetrochamber.com/resources/2026-state-of-downtown/
10. “Downtown Portland office vacancy rate falls for second straight quarter,” Axios Portland, July 22, 2026. https://www.axios.com/local/portland/2026/07/22/downtown-office-vacancy-rate-falls-second-quarter
11. City of Portland, “Portland City Council adopts final budget for 2026-27,” June 18, 2026. https://www.portland.gov/hello/news/2026/6/18/portland-city-council-adopts-final-budget-2026-27
12. “Portland facing $1 billion-plus in arts, culture and entertainment infrastructure requests,” Oregon ArtsWatch, March 2026. https://www.orartswatch.org/portland-facing-1-billion-plus-in-arts-culture-and-entertainment-infrastructure-requests/
13. “Future of Keller Auditorium headed to Portland City Council,” Oregon ArtsWatch, June 2026. https://www.orartswatch.org/future-of-keller-auditorium-headed-to-portland-city-council/
14. Portland City Council, City Life Committee, public hearing on the Performing Arts and Culture Center resolution, July 28, 2026 (hearing record and testimony). https://www.portland.gov/council/agenda/city-life-committee/2026/7/28
15. Ann Cudd, “Portland is What We Make It,” Portland State University Office of the President blog, December 14, 2023. https://www.pdx.edu/president/blog/portland-what-we-make-it