Trail Blazers, City of Portland Agree to 5-Year Extension on Moda Center Lease as Talks on Rose Quarter Development Continue
The new deal will go before the Portland City Council next week.
📍 PORTLAND, Ore. — As talks continue around the long-term development of the Rose Quarter campus and the Lower Albina neighborhood, the Trail Blazers are on the verge of securing their short-term future at the Moda Center.
The Blazers and the city of Portland have reached agreement on a five-year extension of their lease, which was set to expire in October of 2025. The Blazers will then have an option to extend the lease an additional five years, through 2035, according to sources with direct knowledge of the deal. However, this agreement is being approached by both sides as a bridge deal, with the ultimate goal of a long-term developmental project with the land around the Moda Center and the Rose Quarter campus.
The agreement, which was negotiated by Blazers president of business operations Dewayne Hankins and Portland mayor Ted Wheeler, is set to go before the Portland City Council next week, where it is expected to pass a vote.
Once it’s official, the bridge deal will give the city, team and other stakeholders time to negotiate a long-term plan not only to renovate the arena and keep the Blazers playing there, but for more significant development in the Rose Quarter area and greater Albina district in North Portland.
The Blazers’ previous ground lease with the city, a 30-year contract that went into effect when the arena opened in 1995, included three options for the team to extend the lease by an additional 10 years each. The team’s deadline to make a decision on the first of those 10-year extensions is Oct. 11 of this year, one year ahead of the expiration of the lease.
Both the Blazers and the city felt they needed more time to negotiate a new long-term lease and a plan for developments in the area that made sense for all parties. As a result, the team and city agreed to split that initial 10-year renewal option into two five-year periods, to create more flexibility to work out a long-term deal.
The term sheet for the new agreement, which I have viewed and which will be voted on by the City Council next week, lays out what the sides are calling a “public-private partnership” involving a transfer of the arena from the team to the city and a roadmap to keeping the Moda Center, which is the oldest NBA arena to never undergo a major renovation, viable as a long-term home for the Blazers.
As part of the agreement, ownership of the Moda Center will be transferred from the estate of the team’s late owner, Paul Allen, to the city for a purchase price of one dollar, according to the term sheet. The city already owns the Veterans Memorial Coliseum and the parking lots and property around the Moda Center, with the exception of one parcel that was a car wash before the Moda Center was built. The Blazers own that piece of the land under the arena and, as part of the agreement, will sell it back to the city at market price to fully consolidate ownership of the Rose Quarter with the city.
Generally, it is more politically viable for a city to invest money in an arena that is publicly owned than one that’s privately owned by the owner of an NBA team, and transferring the arena to the city clears that hurdle.
In the new agreement, even though the city will now own the Moda Center, the Trail Blazers will still have full operational control of the Rose Quarter, according to the term sheet.
Under the current 30-year agreement set to expire in 2025, the city collects revenue from parking in the garages and a small tax (6 percent) on ticket sales for Blazers games. That money, which has totaled around $150 million since the arena opened in 1995, has been used to fund updates to other city-owned sports facilities including the Coliseum and Providence Park, where the Timbers and Thorns play. Under the new agreement, parking and ticket-tax revenue from Blazers home games will now be reinvested into Moda Center updates, repairs and maintenance.
This past summer, the Blazers completed the first of three summers’ worth of major renovations that will be needed to keep the Moda Center up to the standards of modern-day NBA arenas. They aim to have the rest of the work done by 2030, when the building is scheduled to host the NCAA Women’s Final Four. Updating the arena will also increase the likelihood that the Blazers will be able to do other things they’ve said they want to do, including bringing a WNBA expansion team to Portland and bidding to host NBA All-Star Weekend in the future.
The work last summer was paid for in full by Vulcan Inc. chair Jody Allen, the Blazers’ de facto owner in the years since her brother’s death in 2018. According to the term sheet for the new agreement with the city, the team will continue to invest significantly in updates to the arena, but money the city makes on Blazers games from the ticket tax and parking fees will also be used to help pay the costs of improving the arena and the area around it.
The city’s contribution to this work over the next five years will come entirely from this pool of money—meaning the city will not take on any debt, implement any new taxes or raise any existing taxes to pay for improvements to the Moda Center. The city’s end of the costs for this work will also be capped at 50 percent of the total costs, with the other 50 percent, plus any overages, being paid for by Blazers ownership.
Another piece of the plan laid out in the term sheet is the implementation of new signage outside the Moda Center. This is part of an effort to make the Rose Quarter campus into a true entertainment district similar to the Toronto Raptors’ “Jurassic Park” or the Milwaukee Bucks’ “Deer District.” The arena being owned by the city rather than the team helps clear some of the legal roadblocks in building that sort of outdoor display.
Over the next five years, the Blazers and city officials plan to continue discussing other development projects in the area. Earlier this week, Portland Public Schools reached an agreement to sell their headquarters building that’s down the street from the Coliseum to Albina Vision Trust, a nonprofit focused on redeveloping the neighborhood. While that group has not had formal discussions with the Blazers on their involvement in this project, the two parties have a good working relationship and are aligned in their long-term aims. In December, Hankins and AVT executive director Winta Yohannes co-authored a guest op-ed in The Oregonian about their shared goal of revitalizing the Lower Albina area.
According to sources close to the negotiations, Blazers ownership was adamant during the process that their desire is for the team to remain in Portland long-term. While the idea of the team moving has always been more of a vague fear stoked in some corners of the public discourse than a serious possibility, Jody Allen agreed to significant financial protections for the city against that scenario.
The term sheet includes a section called “Repayment of City Funding Commitment,” which states that if at any point in the future the Moda Center is no longer the Blazers’ home arena, the team’s ownership—be it Jody Allen or anyone who buys the team from Paul Allen’s estate in the future—will be required to pay back 100 percent of the money the city contributed to updating the building.
If all goes according to plan, the Blazers’ next step won’t be picking up the second five-year extension in the new agreement—it will be a much longer deal with the city, accompanied by larger effort by everyone involved to rebuild the Lower Albina neighborhood. This bridge deal buys them time to make that a reality.
Thanks for writing about this. I find this part of the team fascinating.