The Portland Trail Blazers logo is visible on a flag waving during a National Basketball Association game against the Detroit Pistons at Moda Center in Portland, Ore., on Feb. 23, 2020.
Kaylee Domzalski / OPB
From sale speculations to the realities of life without Damian Lillard, the future of the Portland Trail Blazers is a hot topic. Next week, Portland City Council will address one unknown: the fate of the soon-expiring lease at the Moda Center.
The proposed five-year lease extension with the city, which owns the land the Moda Center occupies, illuminates challenges the team’s management have faced in trying to finance major renovations to the 29-year-old arena and offers a short-term promise to keep the team in Portland.
“This keeps the Blazers playing in Portland until at least 2030,” said Karl Lisle, the city’s facilities program coordinator. “We don’t want a team that is actively looking to relocate. It’s a win for the city to secure the team for those extra five years.”
The team also considers the proposed agreement a win. That’s mostly due to changes in how the Moda Center can recoup city dollars to jump-start renovations at the aging arena.
Since the Moda Center opened in 1995, the venue has poured an estimated $150 million into the city’s Spectator Venues and Visitor Activities Fund, a pot of money made up of venue ticket taxes and parking fees from Providence Park, the Moda Center, and the Veterans Memorial Coliseum. The city largely uses that money to pay off debt for projects at other city-owned venues. The Moda Center is owned by Rip City Management, a private company, and receives none of the revenue from the spectator venues fund. This is a condition of Rip City Management’s 30-year lease with the city, which expires in October 2025.
“That was part of the deal,” said Dewayne Hankins, the Trail Blazers president of business operations. “But that was something we wanted to see change. We are just, in this deal, getting what the Blazers are generating to be put back in the building.”
The proposed lease extension is between Rip City Management and the city of Portland. The Trail Blazers and Rip City Management are both owned by the estate of late billionaire Paul Allen, which is overseen by his sister Jody Allen.
Hankins characterized the unique five-year lease extension as a demonstration of Allen’s commitment to keeping the Trail Blazers in Portland.
“Jody’s goal from the start was keeping the team here long term,” he said. “And that is woven throughout the [agreement]. It’s been unequivocal.”
The extension, called a “bridge extension,” is nonbinding. According to Lisle, it acts as a green light for the city and team to work toward finalizing a deal by the summer. The proposal comes with the ability to be renewed for another five-year term after 2030. But both Hankins and Lisle say the goal is to hammer out a much longer-term lease by that point.
The proposed agreement requires Portland to allow Rip City Management to hold onto all ticket surcharges and parking fees generated at city-owned garages during Blazers home games for “the sole purpose” of paying for Moda Center renovations and other construction projects, instead of into the city’s spectator venues fund. The city estimates it collects between $4 million and $6 million annually in fees at Blazers games.
Revenue from the Moda Center taxes and fees make up about 75% of the city’s annual spectator venues fund revenue. Lisle said that about half of those funds come from Blazers games. The fund, which generated just under $10 million for the city last year, helps pay for maintenance and past renovations at the Veterans Memorial Coliseum and Providence Park, where the Portland Timbers and Thorns play.
Lisle said the soccer clubs and other venue maintenance won’t be impacted by subtracting revenue collected from Blazers games.
“Impacting that fund, that was a fundamental question with the city’s comfort level about this deal,” he said. “But we are confident that it’s not going to inhibit the ability to meet ongoing obligations out of that fund.”
Per the proposed deal, the fees and taxes from Blazers home games would never account for more than 50% of the Moda Center’s annual capital construction expenses.
Hankins said the Moda Center is overdue for renovations, ranging from a new scoreboard to upgraded seating sections to an exterior lobby. In previous interviews, Hankins has said he wanted the arena to undergo major renovation by 2030, when the space is slated to host the NCAA Women’s Final Four tournament. That won’t be possible under this lease extension.
That’s because the Blazers — and the city — don’t have the kind of money available to cover these big costs. Hankins said the extension will allow the team time to seek additional funding from public entities, like Multnomah County, the Metro regional government or the state.
The lease extension includes other proposals that could trim costs for Rip City Management. That includes handing ownership of the Moda Center over to the city, a move that will relieve Rip City Management from paying hefty property taxes on the building (city records show the company paid $208,000 in property taxes for the arena in 2023). Hankins said this transfer may also make it easier to attract outside funding from other government agencies for renovations, since public bonds and other funds aren’t allowed to go toward privately-owned buildings.
The deal also mentions an agreement with the city to examine whether the swath of land surrounding and encompassing the Moda Center — long referred to as the Rose Quarter — could qualify for Tax Increment Financing. This is a funding tool that allows the city to freeze taxes in a certain geographic area over a period of time and use the increase in property values in that area to reinvest in the district, a tool commonly known as urban renewal.
Hankins said this could help turn the Rose Quarter into the entertainment and community hub that’s been a discussion point for decades but never materialized. He sees this plan in relation to a recent proposal from Albina Vision Trust to turn land currently owned by Portland Public Schools — which neighbors the Rose Quarter — into affordable housing and contributions to the 1803 Fund to make investments in that neighborhood and others nearby.
“They have this goal of revitalizing a neighborhood that was torn apart by urban renewal,” he said. “We have this desire to make this a hopping place 365 days a year. Our goals are really, really aligned.”
Mayor Ted Wheeler, who participated in negotiating the lease extension, shared a similar outlook on the agreement.
“This bridge agreement helps us maintain world-class sports and entertainment in our city while we plan for the future,” Wheeler said in a statement. “In addition to its significant economic contributions, the Rose Quarter is a major cultural center, gathering place, and key component of our identity and civic pride. I am excited about the possibility of continuing to enhance and grow this tremendous community asset in partnership with the Blazers organization.”
The agreement doesn’t prohibit the Blazers from leaving Portland at the end of the lease. But it could come with a cost: The proposal requires that the team return all the fees and taxes recouped from the city’s spectator venues fund back to the city if the team leaves in 2030.
“It’s kind of a good faith thing to make sure people knew that we were committed to keeping the team here,” said Hankins.
If the proposal is approved by City Council Wednesday, the city and Blazers will begin cobbling together a final lease extension. Per the draft proposal, the final draft will be submitted by August.