Portland and Multnomah County set table for Moda Center negotiations

With deadlines fast approaching, Portland and Multnomah County officials Thursday hammered out the framework for their looming negotiations with the Portland Trail Blazers over Moda Center renovations.

This plan was set into motion in the spring, when the state pledged to commit $365 million in state bonds to renovate the aging arena if the city and Multnomah County both pitch in money ($120 million and $100 million, respectively). In exchange, the state asks the Blazers to commit to a 20-year lease at the Moda Center. All parties intend to finalize the deal by the end of the year.

County board members and city councilors held separate meetings Thursday to discuss what details they’d like to see in a Moda deal in exchange for their financial contributions to renovate the publicly owned arena.

The meetings come after months of increasingly tense public debate over funding sources and trade-offs — and a souring relationship between local governments and Blazers management. The team has refused to provide details sought by city and county officials, citing a potential threat of litigation from the city.

That frustration was on full display Thursday, as city and council elected officials begrudgingly advanced their spending plans.

“Right now, it does feel like there are some of us who might be getting extorted by the NBA on this,” said Councilor Angelita Morillo, one of six city councilors up for reelection this year. “At the end of the day, you’re gonna have to look at yourself in the mirror every single day when you wake up and decide if you’re okay with doing this to Portland without the appropriate negotiation for our people.”

Portland’s term sheet moves forward unchanged

In July, Portland’s administrative branch released the first draft of a term sheet laying out the city’s desired framework for negotiations with the Blazers. That draft includes the $120 million up-front commitment and up to $275 million for ongoing maintenance over the 20-year lease.

It also included details that the Blazers have deemed “nonstarters,” like a $3 million annual fee to make up for property taxes the Blazers won’t pay on the public building and a requirement that the team allows Moda staff to unionize.

While some city councilors supported the draft language, at least half balked at what they considered a weak starting point for negotiations. Thursday offered councilors a chance to introduce amendments to that term sheet, before a final Aug. 12 council vote.

Yet the majority of the council chose to keep the document unchanged. Councilors voted down all 18 proposed amendments Thursday.

“The question is whether adopting amendments today strengthens or weakens our ability to get to the final deal that is the best possible deal for Portland,” said Councilor Elana Pirtle-Guiney, whose district includes the Moda Center. “I believe making piecemeal changes on the dais today could risk or undermine the work we have done up to this point.”

Pirtle-Guiney and Council President Jamie Dunphy announced Thursday that they intended to vote down every amendment. Dunphy said he has instead directed his staff to draft a single amendment for councilors to consider at the Aug. 12 meeting that incorporates some of his colleagues’ proposals.

This stance perplexed some of the council’s more progressive members. They suggested that the term sheet might be the council’s only meaningful opportunity to influence any deal the city reaches with the Blazers.

“If we’re in the video game, we’re not at the big boss yet,” said Councilor Sameer Kanal. “We haven’t gotten to a point where we’re negotiating with the Blazers. We are looking at what we’re even able to ask for.”

Councilors argued their failed amendments would have put the city in a stronger negotiating position. The proposals included removing the $275 million for ongoing maintenance, increasing the $3 million annual payment by 5% each year, giving the city the ability to sell the arena’s naming rights, and increasing the amount of money the city can collect from arena ticket sales.

Councilor Candace Avalos, who proposed 12 of the amendments, urged Dunphy to incorporate some of these ideas into his amendment package.

“I think the current term sheet is absolutely unacceptable,” she said. “I hope that we come in next week with some of these additions because otherwise I think we are failing Portlanders.”

Amendments needed seven votes to pass, and four of them failed with the 12-person council split evenly.

Dunphy said Thursday he will most likely incorporate those four proposals that failed with a tie vote into his amendment, that is, if the city’s negotiators believe it’s worthwhile.

“If it’s not, then we won’t,” he said.

The Aug. 12 meeting is scheduled to last the entire day. The term sheet also needs seven votes to pass. Wilson can cast a tie-breaking vote.

It’s still not clear how the city will pay for the $120 million contribution. City officials have paused plans to tap the city’s clean energy fund or economic development bureau until they have more information from the Blazers about how that money would be used.

Before the meeting ended, Councilor Sameer Kanal pressed Wilson on whether he wants the city to see a return on investment in its Moda Center deal.

“Absolutely,” Wilson replied. “It’s how you quantify that, whether it’s qualitative or quantitative.”

Wilson told Kanal he’d also be discussing the failed amendments with the city’s negotiators to influence the final term sheet.

Multnomah County advances funding plan to city

Earlier in the day, Multnomah County Commissioners debated their own version of a term sheet.

While Chair Jessica Vega Pederson had previously pledged that the county would contribute roughly $101 million toward Moda Center renovations, that plan needed the full county commission’s sign-off before negotiations over that money began.

The commission gave that stamp of approval with a 4-1 vote Thursday.

But it didn’t come easy.

“I am still uncomfortable with the dollar amount and think it is too much,” said Commissioner Meghan Moyer, who cast the sole vote against the proposal.

But the majority of commissioners advanced a commitment to direct $101.6 million toward arena renovations. Commissioners didn’t identify the exact revenue source, but asked county staff to craft a financing plan that prioritizes using money from a county rental car tax and other tourism-related funds.

The proposal also keeps the county from touching its business income tax to cover the cost, a revenue source initially floated by Vega Pederson. This tax goes into the county’s general fund, and any reduction could lead to county budget cuts. Unionized county staff has urged commissioners to avoid tapping this specific revenue source to prevent future layoffs.

Commissioner Shannon Singleton, who introduced this funding plan as an amendment, said union representatives told her using the business tax money would “feel like a slap in the face.”

“This attempts to address both the concerns of our frontline staff, but also to move forward with the funding package that gets us to a deal,” said Singleton, who is running for county chair this fall.

Moyer and Commissioner Julia Brim-Edwards had pushed for a clearer — and smaller — commitment. Both hoped to limit the county’s financial contribution to $88 million, coming solely from the rental car tax. This would have cut out the county’s proposed $12 million to cover future arena maintenance.

“I don’t think we should be paying for maintenance for an asset we don’t own,” said Brim-Edwards, who is also running for county chair in November. But she and Moyer didn’t have the support of their colleagues.

They did find an ally in Singleton in raising concerns about the outside negotiator Vega Pederson hired. At Thursday’s meeting, Vega Pederson said she had hired Chris Oxley, a longtime Blazers business strategist, to represent the county at the negotiating table. Oxley is also the board president of Sport Oregon, the nonprofit behind a coalition lobbying the city and county to commit to Moda renovations.

“I’m sorry, did I mishear?” Moyer asked when Vega Pederson first shared his name Thursday. “We hired a negotiator that’s on the board of an organization that is lobbying us on this issue? How is that not a wild conflict of interest?”

Moyer, Brim-Edwards, and Singleton all approved an amendment that directed the county’s Chief Operating Officer to lead negotiations with the Blazers. This wouldn’t boot Oxley from his role, but it does ensure that Vega Pederson isn’t directly overseeing negotiations.

Despite much disagreement, commissioners did unanimously agree on what they want to see their negotiators get out of the final funding deal. That proposal included a number of demands:

• Multnomah County has a seat on the joint oversight body, alongside the city and state, on how public money will be spent on Moda renovations.
• The Blazers agree to hire unionized construction staff and allow Moda Center staff to unionize.
• Prohibiting the city from expanding tax exemptions on land around the Moda Center without commission approval.
• The Blazers will return any county funding if the team relocates before the 20-year-lease ends.
• The Blazers pay the county and county school districts an annual payment in lieu of property taxes (the amount of this payment is undefined)
• That the deal creates new revenue for the county in some way, whether that be through concession sales, parking, or other charges.

The county’s proposal now heads to the city, where it is expected to be incorporated in the city’s term sheet on Aug. 12.