Moda Center Renovation
01 — Background

Why the city owns the Moda Center

In short: the original 1995 lease provided that ownership of the arena would eventually transfer to the city, so the city was always going to end up owning it regardless of the current renovation proposal.
Original 1995 land lease agreement
The original land lease agreement from 1995 confirmed that the city would acquire the arena no later than 2025.

The single biggest fact surrounding the Moda Center renovation is that the city of Portland owns the arena. The Blazers are the primary tenant, and the current arena lease runs through 2030. The city has publicly pushed for a long-term lease extension. The Blazers reportedly want an updated arena before agreeing to a long-term lease. That's where we are.

In-depth

The potential risk for the city is if the Blazers don't sign a long-term lease and they actually do leave. If that happened, Portland would still own the Moda Center, and would still have to figure out how to operate, maintain, repurpose or otherwise deal with the building.

Which leads many to question: why does the city own the arena? Some have raised concerns about the city acquiring the arena for $1 in 2024 and paying another $7.13M for a parcel of land underneath part of the arena.1 But when the arena was originally built in 1995, it was mostly privately funded by Paul Allen and independent financiers. Of the $262 million construction cost, roughly $46 million came from Allen personally and $155 million from a bond consortium, against about $34.5 million from the city.2 The Blazers signed a 30-year land lease agreement with the city, and the agreement was that at the end of the 30 years, ownership of the arena would transfer over to the city, if there wasn't an agreement to transfer ownership earlier.3

The city was always going to end up owning the Moda Center by no later than 2025.

Sources
  1. Portland City Council Ordinance 191857.
  2. The Seattle Times, "Portland Finally Gets Its Promised Rose Garden — Public-Private Cooperation Provided The Financing," Oct 19, 1995.
  3. Portland City Council Resolution 37750: "a key agreement is the Arena Ground Lease which became effective when the new arena opened on October 12, 1995, and provided that at the end of the original lease term in 2025, ownership of the arena would transfer to the City." (Portland.gov)
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