Trail Blazers, city of Portland finally meet, but distance between sides remains ‘significant’

PORTLAND, Ore. — The good news for basketball fans in this region: The Portland Trail Blazers and the city of Portland finally got in a room and talked on Thursday.

The bad news: Both sides remain divided — deeply divided — on whether the city will give the team $573 million in public funding for arena improvements in exchange for a 20-year lease that keeps the team in Portland.

“Today was a show from the Blazers that they are serious about coming to the table,’’ Portland city council president Jamie Dunphy said. “I don’t know if that guarantees anything … in fact, I think the distance between the Blazers and the city is pretty significant.’’

The sides are trying to agree on a term sheet for an arena lease in exchange for millions in public funds. The state of Oregon has already committed $365 million, contingent on the city’s approval of $120 million and Multnomah County’s contribution of $88 million.

The city council will vote on the term sheet Aug. 12. If an agreement isn’t forged, the concern is that the Blazers will lose the funding and perhaps begin looking for another city in which to play. The current lease expires Oct. 11, 2030.

Before Thursday, the 12-member city council said it had been left in the dark by the Blazers, who have been reluctant to show the scope and depth of the renovation project. The council has not been shown plans, renderings or even told in general terms what the project will entail.

Last week, Dunphy invited Blazers president Dewayne Hankins to attend a three-hour work session with the council. Hankins appeared before the council, city administrator Raymond C. Lee III and Mayor Keith Wilson for an hour.

While both sides conceded it was positive to finally talk face-to-face, there was palpable tension, including moments with strong words and veiled negotiatory threats from both sides.

At the crux of the division is an odd tactic deployed by the Blazers: the team is demanding the city remove the threat of a lawsuit before negotiations continue. Hankins and Zandria Conyers, the Blazers’ general counsel, said the team will not negotiate until the city puts that in writing, a concern stemming from a clause in the bridge agreement signed in August 2024 that stated the Blazers must maintain the Moda Center “in a first-class manner.”

The Blazers fear if they list what needs to be upgraded or repaired, the council will turn and sue the Blazers for not meeting that “standard.” In a June council meeting, councilman Steve Novick loosely pitched the prospect of litigation. The Blazers have interpreted the suggestion as the city’s intentions.

“We have been clear about the first step that’s needed for these negotiations to move forward: the bridge agreement,’’ Hankins told the council in his opening remarks. “Although we enter negotiations in good faith, the first-class standard has been wielded as a weapon, chilling our negotiations.’’

However, Mayor Wilson emphatically shot down any notion the city is looking to sue.

“The mayor, the city administrator, the city attorney have never contemplated suing the Blazers,’’ Wilson told Hankins on Thursday. “It’s never been a part of our conversations — back room, with you … we are not contemplating suing the Blazers, Rip City Management or any other parties. I just want to make sure you trust us in that discussion.’’

Moments later, Conyers, the team’s chief legal counsel, circled back to the possibility of a lawsuit.

“I feel what the mayor just said, but at the end of the day, the fact still remains: There is a litigation threat out there,” Conyers said. “I understand that is not the intent, nor the desire, nor even the contemplation of the city right now. But the reality is that there is just information and conversations we have to have … information that can’t be unseen, dialogue that can’t be unheard, that can end up impacting us and our legal position in litigation.’’

The Blazers want the bridge agreement amended to remove their responsibility to maintain the Moda Center in a “first-class manner.” The mayor and city council president both said re-litigating a past agreement is not going to happen.

“We are not interested in looking backwards,’’ Dunphy said. “We are not looking to re-open and renegotiate old contract agreements. We are looking forward to trying to figure out what the future of the Blazers in the city of Portland really is.’’

Dunphy also noted that “litigation only matters if they move the team. There is no specific litigation threat. It’s a term and condition that the Blazers had when the new owner (bought the team).’’

While the Blazers kept throwing their “threat of litigation” screwball throughout Thursday’s session, they also mixed in some curveballs — most notably, how much they are taxed and how difficult it is to do business in Portland.

Hankins said the Blazers are “paying taxes higher than any other team” and that the city’s term sheet contained more than 20 material departures from the bill signed by the Oregon state legislature in March — all of them costing the Blazers more money to operate. These asks by the city, Hankins said, come after the Blazers have paid an estimated $1 billion over the last 30 years to build, maintain and upgrade the arena.

“Portland’s current stagnant business climate, high income taxes, and divisive political environment makes this a tough city to invest in,’’ Hankins told the council. “It makes it harder to sell tickets, secure corporate sponsorships and recruit players.’’

One of the current taxes that takes away income from the team is the Spectator Tax, in which the city takes 6 percent of every Blazers ticket sold. Previously, the city took that tax and distributed it to help with the upkeep of its other sporting venues such as Providence Park (where the Portland Timbers and Portland Thorns play) and Memorial Coliseum (where the Portland Winterhawks, a junior-league hockey team, play). Since the 2024 bridge agreement, the city now funnels all of that tax back into the Moda Center to help the Blazers with maintenance and repairs. The first check from the tax, delivered recently, was for $4 million. Novick, the city councilor who rankled the team by threatening to sue, said Thursday he proposes increasing the Spectator Tax to 7 percent and increasing the share the city gets from arena parking.

It was clear the Blazers’ curveballs caught some of the council off balance. What was supposed to be a session to talk about the Moda Center and renovations morphed into talks of litigation, taxes and referendums on Portland’s business climate.

After the Blazers contingent — which also included Chief Financial Officer Joe Loomis and assistant general counsel Landus Anderson —  left the session after an hour, the council met for two hours, debating and asking questions of Wilson, Lee and Donnie Oliveria, the deputy city administrator. Several councilors noted they were confused by Hankins’ complaints about income tax — the city does not have an income tax nor the authority to change the state income tax — and some questioned why it appeared Hankins was moving the goalposts on issues that didn’t involve the Moda Center.

Regardless of the Blazers’ contentions, Dunphy said he viewed Thursday as a step forward.

“That was the first opportunity for the city council to hear that there are things outside of the scope of what we thought we were talking about,’’ Dunphy said. “We knew that was coming. And they have to know there are other things that I’m sure the city will ask for in the process of negotiations.’’

Dunphy said a definite ask by the city will be an insistence on a labor-harmony agreement that ensures union jobs.

“It is very clear to me that this council is dead-set on having a project labor-peace agreement of some sort,’’ Dunphy said. “Making sure that not only are construction and renovation jobs union-represented but also the operations and those working the concessions.’’

Up next is an Aug. 5 public hearing at City Hall, followed by an Aug. 6 deliberation meeting by the city council. Dunphy said he has confidence the Aug. 12 vote will go on as scheduled.

In the meantime, the council is hopeful the Blazers or other city administrators share more information about the renovation plans.

“The council is ready to dive into the details,’’ Dunphy said. “(The council) wants Excel spreadsheets. They want to know how many sticks of lumber, and how many bags of concrete. And that’s not quite where the Blazers are at this moment.

“I understand that’s not where they are … but we have a responsibility to be transparent and accountable to the public with every dollar we are spending,’’ Dunphy said. “And that means we need details.’’