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After months of public debate, the Portland city council voted 8-4 yesterday to approve spending $120 million toward renovations to the Trail Blazers arena, plus $275 million for upgrades over the next 20 years. But the term sheet it approved included several major new conditions — most prominently, that the team start paying rent, starting at $3.1 million a year and rising by up to 3% a year, as well as payments in lieu of property taxes on the tax-exempt land around the arena, starting at $3 million a year and rising by 5% a year. The team must also agree to cover any cost overruns.

None of those provisions in the final term sheet were in the original one, and they could end up being pretty significant. With the rent and PILOT payments set to increase over time, they should be worth about $110 million in present value to the city, roughly $50 million from the rent and $60 million from the PILOTs because of the different escalation percentages. And while it’s hard to exactly credit these as a windfall for city taxpayers — paying rent on the building you’re a tenant in and property taxes on the land you’re using are usually just what’s expected of everybody — they are additions to the term sheet that would mostly cover the city’s debt payments on its $120 million in arena construction costs. And as for the $275 million in upgrades, that would mostly be covered by ticket taxes, which as we’ve explained here previously largely end up coming out of team owners’ pockets because microeconomics.

This doesn’t make the Blazers plan a good deal for Portland, but it would make it a far better deal. Councilor Angelita Morillo, one of the four no votes, called the revised plan “still the worst deal in the country,” which is almost certainly wrong given some other recent examples, and added “the public is getting fleeced,” which is absolutely correct, especially given that state and county taxpayers would still be on the hook for another $480 million. And it could still get worse in upcoming talks with the team: Yes vote Steve Novick said yesterday, “I’ve already signaled that I’d be willing to accept something that’s arguably less,” which is really not the way you want to start off negotiations.

Still, the Portland council did something all too rare: Presented with a plan that would have poured tax money into the local sports billionaire’s pockets under threat of the team leaving town, they decided to use their leverage as the team’s best option to play in to demand that the billionaire cough up at least some money toward the project, no matter how much he said he wasn’t gonna. And Blazers execs didn’t immediately shoot it down, with team president of business operations Dewayne Hankins issuing a fairly conciliatory (for him) statement that said, in part, “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.” That’s not an acceptance of the city’s rent and PILOT demands, but it’s not “Tom Dundon’s way or the highway” either. One thumb up to the council for at least trying to get something significant for taxpayers, rather than just rearranging deck chairs — how much they stick to their guns from here will determine if they can earn the other thumb.

For anyone who holds to the belief that sports fans are mindless boosters who want their elected officials to keep their beloved team owners (or just beloved team’s owners) happy no matter what the cost, I present you with Blazer’s Edge, the SB Nation fan site for the Portland Trail Blazers. Site editor Dave Deckard yesterday did something that the rest of the local media hasn’t yet: He assigned a reader/contributor who goes by the handle BlazerTag (possibly Ryan Whitledge, who used to host a podcast by that name) to investigate whether the Blazers leaving town would really result in an economic and fiscal catastrophe for Portland, with the city left with “a skeleton building, unused and rotting.” And the answer is: If the experience of other cities is to be believed, Portland would be just fine.

The former NHL home of the Arizona Coyotes has been without its anchor tenant since 2022; they’ve moved onto the greener pastures of Salt Lake City. To see how bad the finances got in the immediate aftermath, let’s hear from Glendale City Manager Kevin Phelps.

“The venue (Desert Diamond Arena) smashed its all-time record for revenue after the (Coyotes’) departure,” Phelps said. “The next year, they beat that number by almost $10 million.”

Glendale, you may recall, had an especially horrific lease with the Coyotes, under which the city had to pay the team to play there. Portland, meanwhile, has an especially horrific lease with the Blazers, under which team owner Tom Dundon doesn’t pay any rent or share any arena revenues.

At the peak of their popularity, the Warriors left Oracle Arena in Oakland for a new facility in San Francisco: the Chase Center. So what happened to Oracle (now called Oakland Arena) when the Warriors left? It had its best fiscal year ever and reduced its operating deficit by 97% between 2019 to 2023.

The Bay Area doesn’t have a ton of arenas — it’s basically the Warriors’ new arena in San Francisco and their old one in Oakland (not counting San Jose, the South Bay is really a different market [EDIT: or maybe one market but a really sprawly one or 1.5 markets or something, see comments if this is important to you]) — so getting the Warriors out of the way has been a blessing in disguise for the Oakland arena. Nobody ever talks much about San Francisco as an NHL expansion or relocation market despite its huge population, and this is likely one of the reasons. (The last attempt going extremely poorly would be another.)

KeyArena turned a bigger profit than it ever did with the Sonics. It happened the same way it did in Glendale and Oakland when their anchor tenants left: by freeing up the stadium revenue the sports teams were hoarding for themselves.

It goes on like that, but you get the idea. This is, in fact, a common theme in arena finances: Having an anchor tenant for 40 nights a year is nice, but not so nice when they’re not paying rent and are taking away dates that could be used on concerts that would. It’s still not especially likely that Dundon moves the Blazers, but it does seem that he needs Portland more than Portland needs him.

BlazerTag then summed up with a couple of paragraphs that reflect a position I’ve heard over the years from lots of sports fans who are all too aware they’re also taxpayers:

The Portland Trail Blazers arena dispute so far in a nutshell: Tom Dundon, owner of the Carolina Hurricanes and past purveyor of predatory lending car loans, bought the Blazers from the estate of the late Paul Allen for $4.25 billion. With four years to go on a short-term lease with the city for the arena that Allen built and then his estate got the city to take over ownership of, Dundon asked for $600 million in city-, county-, and state-funded upgrades, with Dundon himself chipping in nothing on the grounds that he already pays taxes. State legislators said okay, but city and county leaders balked, at which point Dundon sent unnamed team officials to tell reporters that if they didn’t approve this deal, he could demand even more money or else he’d move the team — despite no other cities having expressed an interest in building him an arena, and a lease that prohibits Dundon from even talking to other prospective locations until 2030.

All typical sports venue gamesmanship, so far. But the sports media has lately zoomed in on only one piece of it: Oh shit, where are the Blazers going to move?

• Two writers for The Athletic, after breaking down the basics of the arena renovation funding dispute, launched into a discussion of places the Blazers could move. After ruling out Las Vegas and Seattle since the NBA has its heart set on putting expansion teams in those two cities, they floated Raleigh (too close to the Charlotte Hornets), Austin (too close to the San Antonio Spurs), Nashville (too close to the Memphis Grizzlies), or Kansas City (a good bit smaller media market than Portland). “The case might just come down to which city is willing to offer the best sweetheart deal for an arena and a slew of tax incentives for the Blazers to come,” they report, which is true as far as it goes, but for the small detail that none of those cities are currently offering anything.
• Fox 2 in St. Louis asks if the Blazers could move to St. Louis, noting that while “it’s unclear how strongly the Trailblazers would consider St. Louis as a possible relocation destination, and how much St. Louis city officials are interested,” one of the Blazers’ minority owners is from St. Louis, so it’s “an intriguing possibility.”
• Blazers arena cheerleader Bill Oram of the Oregonian writes that “if left entirely up to me, [moving a team] would be prosecuted as a crime,” but thinks Dundon plans to do it, without specifying where he would take the team to.

Exploring whether the Blazers could actually move is fine enough journalism. But at a time when Dundon and his execs are trying to frame this as “Give me $600m or we’ll shoot this team,” headlines floating destinations where the team could go end up doing the Blazers owner’s move-threat work for him. Portland leaders actually have a fair bit of leverage here — especially with Dundon prohibited by his lease from talking about relocation for now, and with state funding that was already approved expiring at the end of this year — but they’re unlikely to use it if the news media are constantly speculating about other cities allegedly waiting in the wings.

Speaking of leverage, the latest sticking point in Blazers arena talks is a state-of-the-art clause in the team’s lease that — opposite to how these things usually work — requires the team to “maintain the arena in a first-class manner.” Portland councilmember Steve Novick has suggested the city should consider suing Dundon for failing to provide proper arena upkeep if he tries to move the team; Blazers officials say they won’t sit down to talk about a new lease unless the city first attests that it won’t challenge the quality of the team’s arena maintenance. Again, all typical sports lease gamesmanship, and to be expected. The question here appears to be who’ll blink first — and if city and county officials are more afraid of the boogeyman of St. Louis than Dundon is of losing the $365 million in state money he’s already won, that could make all the difference in the blinking calculus.

And speaking of “Approve sports spending first, work out the details later,” this just in from Portland, Oregon regarding Trail Blazers owner Tom Dundon’s $600 million arena renovation request:

As a deadline to commit public dollars to Moda Center renovations rapidly approaches, it appears that Portland city councilors will be asked to approve spending $120 million on arena renovations next month without knowing where that money will come from in the city budget.

According to city officials, that’s because the Portland Trail Blazers have yet to share details of the renovation plans they have in mind for the Moda Center. The Blazers say they need the city to commit to funding before they’ll share designs.

Sorry, wut? If ever a moment called for the employment of that Simpsons “aurora borealis” meme — oh good, looks like J.C. Bradbury is already on it.

With Dundon keeping his pig firmly within its poke, that limits Portland’s options for coming up with its $120 million share, because two sources of funding — the Portland Clean Energy Fund and a city economic development fund — have restrictions on what they could be used for. Not that it really matters: If those funds aren’t used, Portland will have to come up with other tax money, and if they are used, Portland will have to come up with tax money to pay for whatever those funds would have otherwise been used for.

Still, the fact that the Portland city council is set to commit to a term sheet for Blazers lease talks on August 12 and won’t know by then how it would pay the $120 million bill it would be committing to is, let’s go with “not great.” There’s nothing stopping the council from calling Dundon’s bluff, of course, and saying they won’t release his money until he releases his arena plans. That would seem to be the absolute least they could ask him to do, since it wouldn’t cost him any actual money — and Portland lawmakers could still totally request that he chip in more of that — but nobody ever became a billionaire by acceding to reasonable demands.