Moda Center redevelopment shrouded in fiscal uncertainty

Image: Moda Center, Fcb981, CC BY-SA 3.0

Portland has put a $120 million upfront contribution toward the Moda Center (Portland, Oregon, US) renovations on the negotiating table which is big news for the National Basketball Association (NBA) team Portland Trail Blazers.

‘yahoo!sports’ stated that there’s just one fairly important question left … where is Portland getting $120 million?

If everything remains on schedule renovations of the Moda Center could begin as soon as next summer.

That’s a lot that needs to happen over the next several months. But before Portland can worry about spending its proposed $120 million …

It still has to figure out where that money is coming from.

The redevelopment of the Moda Center is shrouded in financial uncertainty.

The Moda Center, formerly known as the Rose Garden, is the primary indoor sports arena in Portland, Oregon, United States. It is used for basketball, rodeos, circuses, conventions, ice shows, concerts, and dramatic productions. The arena has a capacity to hold 20,500 spectators. As of 2007, it is equipped with state-of-the-art acoustics and the other amenities. It serves as the home ground of the National Basketball Association (NBA) team Portland Trail Blazers.
 

Non-binding Term Sheet

The Portland City Council approved a non-binding term sheet recently that includes the proposed $120 million city contribution toward the Moda Center renovation project with additional capital commitments over a potential 20-year lease pushing the city’s proposed investment much higher.

But while Portland has agreed to negotiate around that framework exactly where that first $120 million would come from remains unresolved.

And part of the problem is that Portland still doesn’t know exactly what it’s paying to renovate.
 

Funding Sources

‘yahoo!sports’ further stated that the Portland Trail Blazers haven’t provided the city with much information about the specific improvements they’re seeking at the Moda Center making it difficult for the officials to determine which funding sources could potentially cover different pieces of the project.

Portland Clean Energy Fund

If the eventual renovation plans include the solar panels, the electric vehicle chargers or the other qualifying energy improvements some of those costs could potentially be covered through that fund.
 

Funding Complications

Without the details Portland can’t make that determination yet. And that’s where the $120 million question becomes a little more complicated.

Portland had not determined exactly how it would fund its $120 million share.

The Mayor of Portland Keith Wilson had discussed several potential sources including the anticipated tax proceeds from the Blazers’ sale, the Portland Clean Energy Fund and money through Prosper Portland.

Portland isn’t being asked to handle the entire project alone.
 

State Bonds

Oregon has committed up to $365 million in State bonds toward the renovation contingent on requirements that include a long-term commitment from the Portland Trail Blazers and contributions from the city and the County. The Multnomah County has also advanced a framework for a contribution of up to $101.6 million with conditions attached.
 

Lease Negotiations

The lease negotiations are expected to continue throughout the fall as Portland and the Blazers attempt to turn the preliminary term sheet into definitive agreements. The city officials hope to have a first lease agreement before the Council in early December and wrap up negotiations by the end of the year to remain on schedule for State bonding.
 

Framework

The Portland City Council voted 8-4 recently to approve a non‑binding term sheet outlining the framework for renovating the city-owned Moda Center in Portland, Oregon (US).

Earlier, the Multnomah County Commissioners agreed in a 4-1 vote recently to contribute $100 million to the National Basketball Association (NBA) team Portland Trail Blazers’ proposed $600 million renovation of their home ground – the Moda Center.

The approval allows negotiations with the Rip City Management (the business entity that operates the Moda Center) to enter a more detailed phase. A finalized agreement is expected to come back to the Council later this year for consideration.
 

Term Sheet

The Council has approved a term sheet that is reasonable, fair and focused on keeping the Portland Trail Blazers in Portland thus ensuring the long‑term viability of the city‑owned arena and delivering meaningful community benefits. The term sheet outlines a framework for a modernized, publicly-owned Moda Center that supports the economy and strengthens the partnership between the team and the community.

The term sheet includes terms such as a binding 20‑year agreement requiring the Portland Trail Blazers to play all home games at the Moda Center, requirements for labor-peace agreements, the community benefits commitments, and the clear financial protections on public funding.
 

‘Incredible Natural Beauty’

Remarked Jamie Dunphy, Portland City Council President, “Portland is an incredible city. We are culturally vibrant, we have the best audiences in the United States, our incredible natural beauty provides the backdrop to the best quality of life in the nation – and we are serious people who get things done. This city is a value proposition. It is also a place with values. We move forward from both. I am certain that our greatest chapter is ahead of us and I hope that the Blazers are a part of that future.”,

Commented Keith Wilson, Mayor of Portland, “I’m grateful to my colleagues on the Portland City Council for approving this initial term agreement which allows us to begin the hard negotiation work needed to secure a fair deal that benefits the city of Portland, the Portland Trail Blazers and our community. The State of Oregon has already committed more than two‑thirds of the capital funding required to renovate the Moda Center – a city‑owned asset – and keep it a world‑class venue. Now, it’s up to us to work with our negotiating team and bring this across the finish line.”
 

Next Steps

The Council’s approval marks a significant step toward securing a long‑term agreement that would modernize the city‑owned arena and outline the financial responsibilities between the city and the Trail Blazers’ ownership group. The city is working with the State and the County officials to finalize the formation of the Joint Authority as directed in Senate Bill 1501. The city expects to form the Joint Authority through an interGovernmental agreement in early fall.

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