I didn’t mean for this to be an all–Portland Trail Blazers week, but here we are. The latest news is that, on top of anonymous team officials saying they won’t dignify the city’s lease offer with a response, anonymous city officials say they’ll wait for a counteroffer because to do otherwise would be “negotiating against ourselves.” That’s what you call an impasse, prompting The Athletic to run an entire explainer on how impasses work.
And at the same time, two Multnomah County commissioners are threatening to pull the plug on $35 million in county arena renovation funding that was already approved:
Ahead of a scheduled vote later this week, Commissioners Julia Brim-Edwards and Meghan Moyer on Tuesday introduced a pair of amendments that would cut more than a third of the $100 million that County Chair Jessica Vega Pederson previously committed toward the estimated $600 million project and require that the county recoup any debt it takes on to help finance it…
One of Brim-Edwards’ and Moyer’s amendments would pull the $35 million in earmarked business tax proceeds from the pot of county money, reducing the total to about $65 million.
“The county anticipates a $60 million deficit over the next three years,” the pair said in a statement Tuesday, noting those funds “could instead be used to protect essential services for seniors, people with disabilities, homeless individuals and veterans.”
The county commission only has five members, so the amendments would only need to pick up one more vote to have a shot at passage. In that case we could see Blazers owner Tom Dundon increasing his demands while Oregon officials reduce their offer, which doesn’t need an explainer to explain how that would be an impasse.
At that point, the conventional wisdom goes, Dundon could start ramping up efforts to move the team, something up till now only hinted at by his unnamed henchmen. Except that, as reported here this week, Dundon’s site agreement with the city dictates that he “shall not relocate or seek to relocate the playing site” of Blazers home games until his lease expires in 2030, under penalty of everything up to and including a court injuction. So that rules out openly shopping around for new cities for another three and a half years, right?
Except! ESPN’s Brian Windhorst wrote yesterday that the lease doesn’t block Dundon from moving the team:
The basics are this: The Blazers have a short lease, negotiated in 2024, that only runs through 2030, and the penalty for breaking the lease is to repay the local governments the cost of renovations, which haven’t taken place.
In short, the Blazers are not locked down.
Here’s the lease, which indeed runs only through 2030. In section 13.4, it specifies that if Dundon is found in default of his lease (he doesn’t have rights to terminate the lease, only the city does), Portland can “seek specific performance or other injunctive relief” and try to “recover monetary damages” — there’s nothing in there about Dundon just repaying the cost of any renovations and getting off scot-free.
So, whatchu talking about, Brian? Since Windhorst doesn’t have a public email address that I can tell, I tried tweeting at him, but so far have gotten crickets. Until he provides some receipts for his claim, we should assume that what the lease says is what the lease means, in which case Portland has the hammer in terms of forcing Dundon to come to the negotiating table if he wants arena money, or else he has to sit and lump it until 2030. That’s not perfect leverage, but if city and county officials want to play hardball for the time being, it does appear that Dundon doesn’t have much he can do in response other than send his flunkies to warn elected officials not to make dad mad.
Q. “So, whatchu talking about, Brian?”
A. “I dunno, I just write what the owner’s ‘sources’ tell me to write.”
The idea that rich people are going to be held to things like contracts is so quaint.
Couldn’t he just violate the terms of the agreement and then when finally dragged into court years later on a case that is a near certain loser (for him) offer a meagre settlement with no admission of guilt and move on to fleecing customers in another state in future?
Asking for a friend…
FWIW, I think Windhorst has incorrectly assumed that the “renovations” described are the ones currently being planned.
I believe the lease refers to the last round of renovations the former Rose Garden underwent. Whether that was the ‘2007’ ones that involved Allen or more recent ones, I am not sure.
The entire history of the financing & construction/operation of this facility could be a case study in lack of attention to detail. A former team owner loaned money for construction at exorbitant rates in order to bankrupt the corporation that controlled the building. Apparently no-one saw anything wrong with that and onward the shell game went.
https://en.wikipedia.org/wiki/Rose_Garden_arena_bankruptcy
Maybe this is what the subprime owner (the new one…) had in mind when he spoke of maintaining the ‘great tradition’ of the franchise?
I don’t see anything in the lease about paying off any renovations. If you do, John, can you point me to a section number?
I do not, no. I was referring to Windhorst’s interpretation of the alleged repayment clause. If it exists, I would assume it applies to past renovations, not the ones that have not yet been spec’d or completed.
The lease is linked above — I don’t see anything for Windhorst to misinterpret. My guess is someone told him this, and he didn’t check.
LOL. Being an insider must be a lot of work.
What about?
10.9.1 If the Arena ceases to be the NBA home of the Portland Trail Blazers or its
successor NBA franchise team, Tenant shall repay the City Contribution paid to Tenant during the
Term, upon demand from the City, which demand will be made, if at all, within twelve (12) months
after the Arena ceases to be the NBA home of the Portland Trail Blazers or any other NBA
franchise team. The obligations of this Section 10.9.1 shall be applicable to all successors and
assigns of Tenant and shall survive for a period of two (2) years following the date the Arena
ceases to be the NBA home of the Portland Trail Blazers or its successor NBA franchise team,
regardless of the date of the termination of the Lease.
“10.9.1 If the Arena ceases to be the NBA home of the Portland Trail Blazers or its
successor NBA franchise team, Tenant shall repay the City Contribution paid Term, upon demand from the City, which demand will be made, if at all, within twelve (12) months
after the Arena ceases to be the NBA home of the Portland Trail Blazers or any other NBA
franchise team. The obligations of this Section 10.9.1 shall be applicable to all successors and
assigns of Tenant and shall survive for a period of two (2) years following the date the Arena
ceases to be the NBA home of the Portland Trail Blazers or its successor NBA franchise team,
regardless of the date of the termination of the Lease.”
I’m guessing he’s interpreting this part.
I’m not sure that is the right interpreting.
Double post
Thank you! You’re right, that’s almost certainly what he (or his source) is misreading.
What does that part mean, then?
I suppose it adds up to the same thing. If the Blazers leave in the next four years, the city could not go after him for the cost of renovations that never happened.
It means that if the city spends money on renovations and the Blazers leave anyway, Dundon has to repay the city’s costs. But it doesn’t override the other lease language that says the city can sue to block the Blazers from moving.
Hmmmn.
Does it?
This is the ‘bridge lease’, isn’t it? Offered to Allen & Co as they did not feel comfortable exercising (any of) the 10yr extension(s) they owned an option on.
So, while I agree he appears to be more or less bound to the current lease until it expires, I don’t see how it has any effect on a future lease that might involve additional spending by the city/county etc.
Was any money spent at the time of the bridge lease negotiation? I don’t recall any significant upgrades being discussed or agreed in 2024/25. But I could easily have missed them.
Wouldn’t those be the expenses he had to reimburse if he leaves before 2030?
Reading this kind of language is not a specialty of mine and it is specifically designed to be difficult for lay persons to absorb correctly. But it seems to me that at the end of this bridge lease, he can walk without owing anything.
If there were improvements or other moneys committed by the city/county/state at the time this extension was negotiated, I’m not seeing them.
The bridge lease runs through October 11, 2030.
I think we’re all in agreement that Dundon can do anything he wants starting in 2030.
From the outside, it kinda does seem like Dundon bought that specific franchise, in that specific city, with the idea that it’s another small market that he could easily shake down for a huge arena subsidy, and that he wouldn’t have to worry about leases and all bother because the market’s natural desperation would override everything else.
And really, had he not come out looking like the sports version of Scrooge with a penchant for public asshattery from basically the moment he bought the Blazers, it’s possible we might already be talking about a deal that hasn’t been agreed upon by all parties involved. Alas.
has been agreed upon* lol
IIRC, he said he bought the Blazers because they were the only NBA team for sale.
Theoretically, this means anyone with his level of wealth could have also bought the team. But it also definitely means Dundon had the option of *not* buying the team and turning himself into public enemy no. 1 basically overnight.
Whether this is incompetence or insincerity on his part is still TBD, but given other owners’ track records, it might already be safe to assume it’s the latter.
I suspect he would disagree. These people don’t seem to understand that not being an a$$hole is one of the options available to them. Also, just because an overpriced thing is for sale, they do not have to bid on it. They don’t seem to know that.
Recall the parable about the scorpion and the frog.
Yes because having many billions of dollars isn’t enough. Must get more and more and more.
While the lease prohibits the Trail Blazers from talking to other cities, is there anything to prevent other cities from making pitches to the Trail Blazers?
This worked for David Letterman after losing The Tonight Show to Jay Leno.
We should consider the possibility that the explanation is Brian Windhorst doesn’t know what “specific performance” means.