Portland City Council votes 8-4 to approve $120M Moda Center renovation term sheet

This article was written by Jared Cowley and Evan Watson from KGW:

PORTLAND, Ore. — Portland City Council voted 8-4 Wednesday to approve an amended, nonbinding term sheet, taking the first step toward a deal that could put up to $120 million in city money into a renovation of the Moda Center and keep the Trail Blazers in Portland for at least another 20 years.

The vote starts formal negotiations with the Trail Blazers over the renovation funding and a new lease. Those negotiations will continue through the fall, with a final agreement expected to come before the council for a vote in December.

Portland Trail Blazers President of Business Operations Dewayne Hankins released a statement Wednesday afternoon after the city approved the term sheet, saying the franchise looks forward to working with the city's negotiating team in good faith.

"I want to thank Mayor Wilson, Council President Dunphy and the City Council for their efforts to this point," Hankins said. "We appreciate today’s actions and acknowledge there is still meaningful work ahead as we continue negotiations."

Councilor Sameer Kanal, who voted in favor of the term sheet, emphasized that Wednesday's vote does not lock the city into a final agreement.

"A yes vote doesn't lock anything in but keeps the door open for negotiations," Kanal said. He acknowledged "there's more to do" and said the city still needs a negotiating partner, echoing concerns from other councilors about the Blazers' reluctance to engage in the process up to this point.

Four councilors voted against the term sheet, including Candace Avalos, who said the amended proposal doesn't go far enough to ensure Portland gets a fair return on its investment.

"It's not about just keeping the Trail Blazers in Portland, but whether Portland is getting a fair return," Avalos said. She said every dollar committed to this deal is a dollar taken away from other city priorities at a time of ongoing fiscal challenges.

The amended term sheet proposal includes a new provision requiring Rip City Management, the Blazers affiliated company that operates the Moda Center, to pay the city $3.17 million in annual rent, with 3% increases tied to inflation. Councilors initially proposed a $2 million annual rent provision before Councilor Steve Novick amended it to $3.17 million in a 7-5 vote.

The rent would be in addition to a proposed $3 million annual payment, with annual 5% increases, to offset property taxes.

The approved term sheet also includes a commitment that the Blazers will play all home games at the Moda Center, limits on how much public money can be spent and a series of community benefits, including a labor peace agreement.

Council President Jamie Dunphy said the next three months will be challenging but expressed optimism about the negotiations. Speaking to KGW after the meeting, he said the term sheet is reasonable and puts the city in a strong negotiating position with the Blazers.

"There's nothing crazy in this. There's been a narrative that City Council is going to add wacky things in there. That did not happen," he said. "These are all reasonable negotiated positions that are based on feedback and individual councilors' research about what should be in there. I feel incredibly strong about the position that we just started our negotiators off with."

The proposed city contribution is part of a nearly $600 million public funding package that also includes $365 million from the state and up to $101.6 million from Multnomah County. The county approved its contribution last week after a contentious six-hour meeting. The Blazers have not committed any money toward the project.

Portland Mayor Keith Wilson said Wednesday's vote sent a message to the NBA that Portland is serious about keeping the Trail Blazers.

"Portland showed up today, and it was for the NBA as well," Wilson said. "They wanted to see if we were earnest about our approach, if the rhetoric really mattered, and today we said the term sheet mattered, and we got a solid vote to move forward."

Portland's vote came after weeks of debate over whether the city should commit public dollars to the project and if it did, whether Portland is getting enough in return for its investment.

Nearly 100 people testified before the council last week, and during a meeting later in the week, a majority of councilors rejected 19 proposed amendments from five councilors — Novick, Avalos, Kanal, Angelita Morillo and Mitch Green — aimed at changing the terms.

Morillo criticized the term sheet in the council's discussion.

"Make no mistake this is not a good deal," she said, citing economic studies on the poor value of subsidizing sports arenas. "The public is getting fleeced."

Councilor Elana Pirtle-Guiney argued that the city has three options for the city-owned Moda Center: renovate it as part of a deal with the Blazers, renovate it without the Blazers and without funds from the state and Multnomah County, and let the arena decay over time. 

She said the city's term sheet is a way of getting closer to the best option available, ensuring the Blazers' long-term future and working to revitalize the Albina neighborhood. 

"Folks want to see a fully activated and vibrant Moda Center and they want a realistic, practical good deal for the city in any lease agreement," Pirtle-Guiney said. 

The amended term sheet approved Wednesday was proposed by Dunphy and councilors Kanal, Pirtle-Guiney and Dan Ryan; the latter three councilors represent District 2, where the Rose Quarter and Moda Center are located.

Oregon Senate President Rob Wagner, D-Lake Oswego, praised the vote's outcome, saying in a statement: 

“I see today’s Portland City Council vote as a sign that we’re making real progress in both reinvesting in the public asset that is the Moda Center, while establishing a vision for what we hope our region will provide all Oregonians in the decades to come. An updated, modern, and accessible entertainment venue provides an important element in Oregon’s ability to maintain its competitiveness as a great place to live, work, and play.

“I congratulate the Council members on their thoughtful and engaged process as they came to their decision, ensuring the next era of the Moda Center is as much a part of our region’s success as it has been since Paul Allen opened its doors more than 30 years ago.”

Full statement from Blazers

The following statement is from Portland Trail Blazers President of Business Operations Dewayne Hankins:

"I want to thank Mayor Wilson, Council President Dunphy and the City Council for their efforts to this point. We appreciate today’s actions and acknowledge there is still meaningful work ahead as we continue negotiations.

"Our goal remains the same: to reach a deal that allows the Trail Blazers to succeed on the court and as a business, supports a thriving Portland economy, and creates a path for the team to remain in Portland for decades to come.

"We look forward to continuing to work with the City’s negotiating team in good faith, addressing the issues that remain and finding a resolution that allows all of us to move forward together."