Portland Offers Blazers a Fully-Funded Arena Renovation, But Will It Be Enough?

Updated: 3:20 pm August 14

Amid raucous calls from protesters not to spend millions renovating the Moda Center, Portland City Council approved a lease term sheet to send to the Portland Trail Blazers Wednesday, August 12.

The city is in the process of negotiating a 20-year lease agreement with the Blazers for the team’s use of the city-owned arena that will include a $573 million renovation of the venue. Under the newly approved term sheet, the city would chip in $120 million toward the renovation in the near-term and another $275 million toward the arena’s upkeep over the next 20 years. The Oregon Legislature has also approved $365 million toward the Moda Center renovation, with Multnomah County agreeing to pick up the tab for the remainder of the cost. Now it’s up to the team to accept the proposed lease terms.

The arrangement is similar to a commercial lease. The Blazers’ venue management company, Rip City Management, runs all events at the Moda Center and Veterans Memorial Coliseum. 

City councilors have repeatedly said they want a fair deal for Portlanders as the city heads into negotiations. Wednesday’s vote was evidence of Council’s disagreement over whether the current terms and conditions represent the best deal for the Rose City.

“We’re in a situation where our state legislature asked zero questions,” District 4 City Councilor Mitch Green said, referring to the state’s approval of Senate Bill 1501, which committed the $365 million toward Moda Center renovations without any substantive conversations with Portland’s elected leaders, or any questions about whether the NBA team’s requested renovation package was comparable to  stadium construction costs in other cities.

“The perception here every step of the way has been like, ‘Don’t worry, there is no problem here. This will all pay for itself. It’s self-contained,’ but it’s not,” Green said. “There’s no such thing as a free lunch in public economics.”

The councilor lamented the threat the Blazers dangled in front of the city of moving the team elsewhere if they can’t get a sweetheart lease deal.

“Tom Dundon does not care about our city. He does not care about our team, our values, or our future. He has made that clear.”

Elana Pirtle-Guiney, District 2 City Councilor

Council Vice President Olivia Clark had a less cynical take. 

“We’re getting a three-to-one match on the renovation of the Moda,” she said, referring to funds committed by the Oregon Legislature. “I don’t want to lose that opportunity….”

In District 2, where the Moda Center is located, Councilor Elana Pirtle-Guiney called the proposed lease terms “the most reasonable option” for the city, considering Portland now owns the Moda Center and will need to spend a sizable chunk of money to renovate the venue over time, regardless of whether the Blazers are a long-term tenant. 

“Tom Dundon does not care about our city,” Pirtle-Guiney said bluntly, referring to the billionaire majority owner of the Trail Blazers, who has been adamant that the public should fully fund the cost of a venue remodel even though his team will be the primary tenant. “He does not care about our team, our values, or our future. He has made that clear.”

City staff have said Dundon’s requests include state-of-the-art upgrades beyond the typical standard, including luxury suites and locker room upgrades, though the team has not yet submitted concrete plans showing how they’d configure a nearly $600 million renovation of the venue.

But, Pirtle-Guiney posited, “there’s a cost to not activating the largest space in our city.” 

Approval of the resolution laying out the lease agreement passed 8-4, with Green, District 1 Councilor Candace Avalos, and District 3 Councilors Angelita Morillo, and Tiffany Koyama Lane, all voting against the term sheet.

Wednesday’s vote marked a key step in developing the contours of upcoming negotiations between the city and the Trail Blazers. Prior to the vote, Multnomah County committed $101.6 million toward the project. That vote came with its own dramatics when commissioners learned County Chair Jessica Vega Pederson enlisted the services of former Trail Blazers executive Chris Oxley, who now serves on the board of Sport Oregon—an organization that’s lobbied the county to chip in toward the Moda Center renovation—to serve as the negotiator for the county in the Moda Center deal. 

While the City Council failed to pass a slew of proposed amendments to the terms last week, voting against all 11 proposals put forward by councilors, they found middle ground on Wednesday thanks to a small package of amendments co-sponsored by Council President Jamie Dunphy and all three councilors from District 2. The amendments reintroduced some of the prior proposals most councilors sought to address. 

The fine print

While the city’s negotiators have yet to present the preferred lease terms and conditions to the Blazers, the current term sheet includes a host of stipulations including an annual $3 million fee in lieu of property taxes, which will increase by 5 percent each year. The city is also asking to retain its 6 percent user fee on all tickets sold for events at the Rose Quarter and all revenue from parking. The Blazers will be responsible for maintaining the arena according to specified standards.

The amended term sheet will also see the city requesting annual rent from the Blazers—a stipulation initially proposed by Councilor Avalos. Councilor Steve Novick’s amendment to raise the proposed rent from $2 million to $3.17 million per year, with an annual increase tied to inflation, passed in a 7-5 vote. Novick’s moderate colleagues voted against the proposal while the six progressives voted in favor. Without the Council’s changes, the city would have entered into discussions with the Blazers paying just $1 to use the stadium. 

Despite several financial concessions included in the revised lease proposal, some councilors remain bullish about the city’s expenditure, which will likely exceed $450 million over the next 20 years when accounting for debt service on bonds issued. Green said Wednesday the city is entering into the “worst deal in the country.” Morillo added that “the public is getting fleeced.” 

Councilors passed three amendments Wednesday. One ensures all future revenues generated through ticket sales and parking fees will go toward the city’s Moda Center investments, and ensures all future financial contributions will be allocated through the regular city budget process.

Various sources have been floated to help pay for the renovation, including the Portland Clean Energy Fund, business license taxes, and the city’s general fund. The city is expected to float bonds to pay for the renovation costs, but the Council has yet to decide on a funding source. 

The city will maintain development rights on all land parcels adjacent to the Moda Center, as outlined in the deal. If the Council approves, the city administrator will move ahead in coordinating with the Albina Vision Trust and other lower-Albina developers already working to rebuild the area. 

Other terms in the sheet include a labor peace agreement–asking the Blazers not to interfere in staff unionization efforts at the Moda Center. Unlike NBA players, who operate under a collective bargaining agreement, most concession staff at the arena aren’t unionized. 

Councilor Morillo credited the public, and councilors in the progressive bloc—who previously introduced all but one of 11 amendments the moderate bloc rejected the week prior—for the gains made on the term sheet Wednesday. With the exception of Novick’s rent bump, all amendments to the final resolution were revamped versions of those introduced by progressive councilors. 

“It is because of the tireless efforts of community members and some of the members of this body that this term sheet is improved at all,” Morillo said.

Still, a few proposals failed to reach the seven votes necessary to make it into the final resolution. A proposal floated by Morillo and District 2 Councilor Sameer Kanal would have required the city’s administration to deliver a report to Council 15 days prior to any financial vote, laying out the opportunity costs and trade-offs associated with using specified pots of money for the Moda Center renovation. The amendment sought to give Council a better understanding of how paying for the arena would impact the city’s budget, overall. Morillo and Kanal’s amendment failed in a 6-6 tie.

“Economists don’t do analyses like that. These things are totally made up.”

JC Bradbury, sports economist, on city and state-commissioned economic impact studies of the Moda Center

A proposal from Green and Avalos that would have nixed the city’s commitment of $275 million toward arena upkeep over the next 20 years also died last week and wasn’t resurrected in amendments brought forward Wednesday. Green argued the city’s pledge to reinvest its Moda Center revenue back into a fund for ongoing building upkeep that ultimately benefits the Blazers is an unnecessary perk that drives up the city’s costs. 

“Why do we need to plow $275 million into new capital formation for the next 20 years right away?” Green asked. “Didn’t we do that when we renovated the stadium? The fact that no one has been able to address that question head on, honestly, is scandalous.”

Tensions were high inside and outside City Hall as councilors dug into the details. Immediately after discussion of the arena renovation began, a person opposed to the deal yelled “people are lining up at food banks!” into a bullhorn outside the building and “we know that the public hates this deal!” A protester’s calls for the city to “stop funding billionaires,” were amplified enough to nearly drown out the voices of councilors inside at times, making it difficult for them to hear each other.

Inside, some in the audience held signs reading “no bailouts for billionaires.” At one point, security escorted someone out of the chambers after they disrupted the meeting, saying, “we’ve got schools being shut down and we’re talking about a renovation?”

Blazers balk at city’s initial proposals

The slew of proposed amendments Wednesday was put forward despite the Blazers’ initial rejection of the city’s draft terms and conditions.

During the first face-to-face meeting between city councilors and Trail Blazers management Thursday, July 30, representatives from Rip City Management called the city’s draft term sheet a “non-starter,” and blasted Portland’s business and political climate. Dewayne Hankins, president of business operations for the Trail Blazers, said city leaders need to consider a deal that gives the team enough financial leverage to recruit top-tier players. Other members of the Blazers management team said they’d need to see more competitive tax rates and favorable business conditions.

“We heard that you view our draft term sheet for a new lease … as a non-starter,” District 1 Councilor Loretta Smith told the Trail Blazers reps during the July 30 work session. “We see it as one of the most generous public proposals in professional sports.”

“I have heard that the NBA believes what the city put forward is a fair market deal,” Dunphy told the Mercury the following week after the Council’s August 6 meeting.

City Hall staff who spoke on background say negotiators were nervous about the Council making any substantive changes that would push the term sheet even further from what the Blazers would tolerate. 

Dunphy said he hadn’t been in contact with the Blazers or the NBA, but said he’s “certain that outside observers are watching this process.”

Councilors to city: show us the math

A week before Wednesday’s critical vote, Councilors Morillo and Green hosted a webinar with renowned sports economists who cast doubt on city and state-commissioned economic impact studies related to the Moda Center. At least two have been completed in the last two years, both of which attempt to quantify the overall economic output from tourism and increased spending related to sporting events at the arena.

“Economists don’t do analyses like that. These things are totally made up,” JC Bradbury, one of two panelists who presented during the webinar, told attendees. Bradbury is a professor of economics, finance, and quantitative analysis at Kennesaw State University in Georgia.

Bradbury presented alongside Victor Matheson, a professor of economics at the College of the Holy Cross in Massachusetts who serves as editor of the Journal of Sports Economics. Bradbury and Matheson have both studied the public financing of sports venues and say sports stadiums rarely produce the kinds of economic ripple effects touted by enthusiasts. 

“When you see people going to see the Portland Trail Blazers play basketball, most of those people live in Portland, and so when they’re spending their money at the stadium or at restaurants near the stadium, they’re just simply reallocating their spending from other places within the city,” Matheson explained. In other words, their money likely would have been spent in the city one way or another.

The lead-up to Wednesday’s vote was fueled by dueling public feedback and pressure on elected officials to get a deal done that keeps the Blazers in Portland. Councilors also faced pressure not to give millions in city money—in the form of renovations—to Dundon. Progressive councilors have held firm on questions about return on investment, comparisons to expenditures on sports arenas made by other cities, and the economic trade-offs associated with the Moda deal. 

The city took over ownership of the Moda Center in 2024 from the Paul Allen estate, effectively making Portland the Trail Blazers’ landlord. At the time, city leaders expected they’d have to renovate and repair the 30-year-old arena in phases over the course of the next 20 years, but they didn’t budget for or anticipate a renovation at the scale that Dundon and the Blazers have asked for as part of the conditions in the upcoming lease negotiations.

Dundon, via Trail Blazers management, has so far been adamant that the cost of a Moda Center renovation should be covered entirely by the public. As of Wednesday, he’s one step closer to achieving that goal. The term sheet stipulates that renovation will be covered up to $600 million, with the Blazers on the hook for any costs beyond that, including costs from project overruns.