City agrees to buy Moda Center, land for $7.13 million, plans ‘major renovation’
PORTLAND, Ore. (KOIN) — The Portland City Council unanimously approved the city’s purchase of the Moda Center, and a parcel of land located within the Moda Center for $7.13 million at Wednesday’s city council meeting.
The purchase is part of a five-year bridge agreement between the City of Portland and Rip City Management, LLC — the “sister company” of the Portland Trail Blazers. Rip City Management and the Portland Trail Blazers are both owned by the estate of Paul G. Allen.
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Under the arena’s new operating lease, the city has agreed to match the funding that the Blazers organization puts toward the renovation of the Moda Center. Per the agreement, the city’s contribution can not exceed the revenue it collects from ticket and parking fees generated by Blazers home games during the previous fiscal year. The city states that it will not use any other funds to pay for Moda Center renovations.
Nearly 30 years old, the Moda Center is the oldest NBA arena to not have undergone a major renovation, the city says. The pledge of public funds incentivized the Blazers organization to sign a five-year agreement that will keep the Blazers in Portland through 2030. With the promise of “major renovations” coming to the Moda Center, the Blazers and the city are working on a long-term agreement that would keep the team in Portland for 20 or more years.
“Rip City Management, LLC intends to seek public funding from sources in addition to the [City of Portland] to provide the public financial support necessary for a long-term agreement and needed major renovation,” the emergency ordinance reads.
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The change in ownership provides additional incentives for renovating the building. Under the city’s ownership, the property is exempt from property taxes, which are estimated to cost $1.2 million, annually.
“Transferring the Moda Center into City-ownership is a key financial component of the new Arena Operating Lease and provides important property tax benefits to the operators,” the ordinance reads. “It also gives the City greater control of the building and potential changes to it in the future. In addition, public ownership of the Arena makes future public investment into the building easier, including from debt-related sources such as taxable public bonds.”
The Rose Quarter, which includes the Moda Center and the Veterans Memorial Coliseum, hosts more than 260 events and attracts more than 1.7 million people each year. The Rose Quarter supports 6,000 jobs and has an estimated economic output of more than $600 million per year.
“A majority of this output is linked directly to Portland Trail Blazers games,” the ordinance reads. “It is critically important to Portland, the metropolitan region, and the state of Oregon that the successful operation of the arenas at the Rose Quarter continues, and the Moda Center remains the home court for the Portland Trail Blazers.”
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Under the deal, the city will receive the Moda Center for $1 and purchase a parcel of land within the Moda Center for $7.13 million. The funding for these purchases will come from the city’s Spectator Venues and Visitor Activities funds.
A press release issued by Mayor Ted Wheeler on Aug. 2 said that the bridge agreement with the Blazers will help improve the fan experience at Oregon’s largest gathering place and help transform the city’s historic Albina neighborhood.
“Reinvesting revenue generated by Moda Center and the Rose Quarter back into Moda Center will help maintain its competitive position in the NBA, improve the fan experience, and make it competitive for more high-profile concerts and tourism events in the Pacific Northwest,” Wheeler’s statement reads. “A major Moda Center renovation will also be a centerpiece for revitalizing the Rose Quarter and the Lower Albina neighborhood into a vibrant transformational area and supporting community-led efforts to restore the Black community.”
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