The Moda Center Deal:
A Financial Framework for Portland's Negotiating Position

1. Overview

Oregon's SB 1501 authorizes $365 million in state bonds (with total debt service of $531–$623 million over 20 years) to renovate the Moda Center. Combined with the City of Portland's roughly $400 million commitment and Multnomah County's $88 million pledge, the total public investment exceeds $1 billion in nominal terms. Tom Dundon, who is acquiring the Portland Trail Blazers for $4.25 billion, is not expected to contribute any private capital toward the renovation.

The bill passed the Oregon Senate 24–6 on March 4, 2026, and is expected to pass the House before the session ends March 8. Once the state's enabling legislation is signed, the critical question shifts to the City of Portland: how does the city, as the owner of the Moda Center, negotiate its $400 million contribution and the lease terms on a building it owns?

This report presents three findings. First, the claimed $670 million in annual economic impact substantially overstates the net benefit to Portland and Oregon. The actual net new economic activity attributable to the renovation subsidy—as opposed to the Blazers' presence, which would exist regardless of who funds the renovation—is far smaller. Second, the renovation is profitable for Dundon even if he pays for it entirely himself; every public dollar is pure surplus transferred to the ownership group, and the relocation threat is not credible. Third, several elements of the deal are genuinely reasonable, including the 20-year lease, cost overrun protections, and the state's co-ownership stake.

The report concludes with a hierarchy of outcomes: the economically rational first-best outcome is that the city contributes nothing and lets Dundon invest in his own asset; the second-best is that the city contributes with strong lease terms that recover a meaningful share of the investment; and the worst outcome for residents is the current trajectory—$400 million with no terms.

2. Background and Key Facts

In 2024, the City of Portland purchased the Moda Center from the Paul Allen estate for $1 (plus $7.13 million for the underlying land). Portland now owns the building, the surrounding parking garages, and the Veterans Memorial Coliseum. The Blazers retain operational control under a bridge lease running through 2030, with a five-year extension option to 2035.

Tom Dundon, a Dallas-based billionaire who owns the NHL's Carolina Hurricanes, reached a purchase agreement for the Blazers in September 2025 at a $4.25 billion valuation. The deal is expected to close in March 2026. Dundon's group has stated its intention to keep the team in Portland.

The Moda Center, opened in 1995, is the oldest NBA arena that has never undergone a major renovation. NBA Commissioner Adam Silver has suggested the building needs approximately $600 million in upgrades for the Blazers to remain long-term.

How the money flows under SB 1501:

Source: Legislative Fiscal Office estimates; OPB and Willamette Week reporting; SB 1501 text and amendments.

3. Decomposing the $670 Million Impact Claim

Proponents of SB 1501 cite $670 million in annual regional economic activity generated by the Moda Center and Trail Blazers. This figure is a gross economic activity estimate, not a net economic impact measure. The distinction matters enormously for evaluating whether the public investment generates a positive return.

Three adjustments are necessary:

Substitution effects. Most spending at Blazers games and arena events comes from Portland-area residents who would spend that money on other local entertainment if the Blazers did not exist. A family that spends $200 at a Blazers game would likely spend a comparable amount at restaurants, movies, concerts, or other local businesses. The Brookings Institution, the St. Louis Federal Reserve, and the National Bureau of Economic Research have all concluded that stadium-related spending largely substitutes for other local spending rather than creating net new economic activity. A 2017 survey by the University of Chicago's Booth School found that 83% of a panel of eminent economists (including seven Nobel laureates) agreed that stadium subsidies are unlikely to generate benefits exceeding their costs.

Revenue leakage. A substantial share of Blazers-related revenue leaves the Portland metropolitan area. NBA player salaries for the Blazers' roster totaled approximately $170–190 million in the 2024–25 season. Many players maintain primary residences outside Oregon and spend a significant portion of their income out of state. NBA league-office revenue sharing also sends money out of Portland. Visiting team players pay Oregon income tax on game-day earnings, but their spending in Portland during brief visits is minimal.

The renovation question vs. the existence question. The $670 million figure reflects the economic activity of the Blazers' presence in Portland. But the relevant question for evaluating SB 1501 is not whether the Blazers generate economic activity—they clearly do—but whether the public subsidy for the renovation generates a positive return. The Blazers' economic activity exists because the team plays in Portland, not because of who pays for the building upgrades. If Dundon funded the renovation privately (as the Warriors' ownership did with the $1.4 billion Chase Center), the economic activity would be identical.

Note: These estimates draw on methodologies from Noll & Zimbalist (Brookings, 1997), Coates & Humphreys (2008), and Bradbury, Coates & Humphreys (2023). The wide range reflects genuine uncertainty; honest analysis requires acknowledging this rather than citing a single headline number.

The bottom line: the Blazers' presence in Portland almost certainly generates positive net economic value, including intangible civic and cultural benefits that are real even if difficult to quantify. But the $670 million headline figure does not represent the return on a $600 million renovation subsidy. The return on the subsidy is the marginal economic value created by the renovation that would not exist if the owner funded it privately—and that marginal value is close to zero, because the economic activity depends on the team's presence, not on who writes the check for the building.

4. What the Deal Gets Right

An honest analysis must acknowledge the elements of SB 1501 that are reasonable or represent genuine improvements secured through public pressure:

The 20-year lease. Requiring the Blazers to commit to a 20-year lease is a meaningful protection. It is shorter than some comparable deals (Milwaukee got 30 years, Oklahoma City got 25), but it provides a real floor of certainty for the public investment. Combined with the relocation penalty for outstanding bond debt, this substantially reduces the risk of a team departure during the bond repayment period.

Cost overrun protections. The provision making the Blazers responsible for cost overruns is genuinely important. Construction cost escalation is one of the most common ways public stadium costs exceed projections. This protection shifts that risk to the private operator, where it belongs.

State co-ownership. The joint authority structure, in which the state takes an ownership interest alongside the city, is a reasonable framework for a multi-jurisdictional investment. It provides the state with a legal basis for its contribution and creates a governance structure for the renovated facility.

The tax-recapture concept itself. Redirecting taxes generated by arena activity back into arena maintenance is a logically coherent funding mechanism. The concept is not inherently unreasonable. The concern is about the scope of the capture (expanding beyond arena operations to a full district) and the absence of reciprocal protections for the public.

5. What the City Is Leaving on the Table: A Net Present Value Analysis

Portland owns the Moda Center. This is not a grant application—it is a landlord negotiating the terms under which a private operator uses a public building. Standard landlord economics, informed by comparable arena deals across the NBA, suggest the city is forgoing significant recoverable value.

The following analysis uses a 4.0% discount rate, which approximates the current yield on 20-year AAA municipal bonds (3.78% as of March 2026) with a modest risk premium. All figures are present values over a 20-year horizon unless otherwise noted. The annuity factor at 4.0% over 20 years is 13.59.

Discount rate: 4.0% (20-year AAA muni yield of 3.78% + risk premium). Annuity factor: 13.59 over 20 years. Revenue estimates based on comparable arena deals compiled by ripcitynotripoff.com/deals and verified against Raleigh Centennial Authority disclosures, CNBC NBA valuations, and Willamette Week reporting.

Under the current deal, the city captures none of these revenue streams. Under the terms modeled above, the city would recover $145–$206 million in present value over 20 years. Against the city's roughly $310 million present-value cost (calculated as $120 million upfront plus $14 million per year discounted at 4%), this would offset 47–66% of the city's investment through direct, contractually enforceable cash flows—before considering any appreciation rights or development revenue.

Sensitivity to discount rate:

The recovery ratio is relatively stable across discount rates because both costs and revenues are discounted at the same rate. The city's investment remains partially but never fully recovered through these direct cash flows alone, regardless of rate assumptions. The gap represents the public's contribution toward intangible civic benefits (team retention, cultural value, event hosting capacity) that are real but should be explicitly acknowledged rather than left unpriced.

6. Franchise Value and the Appreciation Question

NBA franchise values have grown at extraordinary rates. The average NBA franchise value increased from $634 million in 2014 to $5.52 billion in 2026—a compound annual growth rate of approximately 20%. Even the least valuable team, the Memphis Grizzlies, has appreciated at 19% annually since its 2012 purchase. The new $76 billion media rights deal (2.6x the previous contract on an annual basis) provides a strong floor for continued appreciation.

Dundon's own track record illustrates the point. He purchased a majority stake in the Carolina Hurricanes in 2018 at a valuation of $425 million and took full ownership in 2021. On March 6, 2026, Sportico reported that Dundon sold a 12.5% minority stake in the Hurricanes at a valuation of $2.66 billion. That represents a 6.25x return and a compound annual growth rate of approximately 30% over seven years. The 12.5% stake sale generates roughly $332 million in liquidity for Dundon—almost certainly to help fund the Blazers acquisition. This is a man who turned $425 million into $2.66 billion in seven years with one franchise and is now asking Portland to hand him $400 million to increase the value of his next one.

The Raleigh connection sharpens this further. Dundon received $300 million in public arena funding for PNC Arena. The Hurricanes then appreciated from $425 million to $2.66 billion—and Dundon is now monetizing that appreciation by selling minority stakes at the inflated valuation. The public paid for the arena improvements that helped drive the franchise value increase. Dundon captured 100% of the gain. Portland is being asked to repeat this pattern at double the public investment.

However, past growth rates are unlikely to continue indefinitely at these levels. A conservative estimate of 8–10% annual appreciation over the next 20 years would project the Blazers' franchise value from $4.25 billion to roughly $19.8–$28.6 billion. The renovation itself will directly increase franchise value by improving revenue capacity from premium seating, suites, naming rights, and events.

An honest assessment: A franchise appreciation right is the most novel and least precedented proposal on the table. No comparable NBA deal includes one. That does not mean it is unreasonable—the absence of such provisions is precisely why public stadium subsidies have historically enriched private owners at taxpayer expense. But the city should understand that this is the ask most likely to face resistance, and should prioritize the more established protections (rent, PILOTs, naming rights, revenue participation) as non-negotiable foundations before pursuing the appreciation right as an additional term.

Does Portland's market size affect these projections?

A reasonable concern is whether Portland, as the 25th-largest metro area, might appreciate below the league-wide average. The honest answer: the specific rate matters for the exact dollar figures but not for the conclusion of this report.

The single largest driver of franchise value is not local market size—it is the national media deal. The new $76 billion agreement pays each team roughly $230 million per year regardless of market. That is the floor under every franchise, including Portland. The NBA's revenue sharing system is specifically designed to prevent small-market teams from falling behind. The Memphis Grizzlies—a smaller market than Portland—have appreciated at 19% annually.

Portland does have a thinner corporate base than New York or Los Angeles, which affects premium seating and sponsorship revenue. The Blazers generated roughly $350 million in revenue in 2024–25, below the league average of $416 million. But the renovation itself is designed to close that gap by adding modern suites, premium seating tiers, and naming rights opportunities—improvements that flow entirely to Dundon's revenue line.

Even at the most pessimistic reasonable assumption—say 5% annual appreciation, roughly half the conservative estimate used in this report—the franchise goes from $4.25 billion to approximately $11.3 billion over 20 years. Dundon's gain is still $7 billion. The renovation is still profitable for him. Walking away from a $4.25 billion asset over standard lease terms of $10–15 million per year remains irrational at any positive appreciation rate. The payoff matrix tells the same story whether Portland appreciates at 5%, 8%, or 12%.

7. The Raleigh Precedent and Comparable Deals

Tom Dundon's 2023 arena deal in Raleigh for the Carolina Hurricanes provides the most directly relevant comparison, because it involves the same owner, a similar structure (public arena funding + private surrounding development), and was negotiated by the same consultant—Dan Barrett of CAA Icon—who now represents the Blazers in Portland. In Raleigh, Barrett represented the public side (the Centennial Authority). He secured significant protections. In Portland, the public has no equivalent professional negotiator. The -A13 amendment requires hiring one, but the role is explicitly advisory and non-binding.

Source: Centennial Authority disclosures; News & Observer reporting; Raleigh City Council records; ripcitynotripoff.com. Portland figures from SB 1501 text and OPB/Willamette Week reporting.

Oregon is investing double what Raleigh did and receiving fewer protections than Barrett himself negotiated on the public's behalf in North Carolina. This gap is not explained by market differences—Portland is a larger market than Raleigh, owns its arena outright, and is offering substantially more public money. The gap is explained by the absence of an empowered public negotiator.

How Portland compares to other recent NBA arena deals.

The Raleigh comparison is the most instructive because it shares an owner and advisor with the Portland deal. But a broader survey of recent NBA arena deals confirms that Portland is an outlier not by a small margin, but categorically.

Sources: Marquette University NSLI Sports Facility Reports; Sacramento Bee; Detroit News; Milwaukee Journal Sentinel; Forbes; team and municipal disclosures; ripcitynotripoff.com.

Portland is the only deal in the last decade that combines 100% public arena funding with zero private capital contribution and no lease terms. Even Raleigh—also 100% publicly funded for the arena—secured rent, PILOTs, a ground lease, and affordable housing requirements. Three comparable deals (Golden State, LA Clippers, Seattle) were funded entirely with private money. Every deal that included public money also included either significant private capital or strong public protections. Portland has neither.

A common response is that Portland's smaller market explains the weaker terms. Sacramento disproves this. Sacramento is a smaller metro than Portland, faced an active relocation threat (the Kings nearly moved to Seattle in 2013), and still required the ownership group to contribute 52% of the arena's cost. Portland owns its arena outright and faces no credible relocation threat. If Sacramento could extract private capital under worse conditions, Portland can certainly extract lease terms under better ones.

8. The District Tax Capture: A Scaling Concern

The -3 amendment creates a "sports and entertainment district" with boundaries defined by a map drawn by the Blazers' management company (Exhibit 2.5, not entered into the legislative record). Under Section 4(1)(a), wage withholdings from every employer in the district are redirected from the General Fund to the Arena Fund.

Today this captures mostly arena operations—a relatively modest revenue stream. But the mechanism is designed to scale. As commercial development fills the district (hotels, restaurants, offices, entertainment venues), each new business becomes an "operating organization" whose employee income taxes are diverted. The Legislative Fiscal Office estimates the current diversion at approximately $38 million per year. If the district develops as intended, this figure will grow substantially.

The economic logic: the public pays for the anchor asset (the renovated arena) that makes surrounding land valuable. The owner develops the land privately. The taxes generated by that private development service the public debt that created the opportunity. The owner keeps every dollar of development profit. The public captures none of the land value increase it created—and loses an expanding share of General Fund revenue for the life of the deal.

This pattern has a name in economics: it is a case where public investment creates private land value, and the value is captured by the private party rather than returned to the public that created it. Economists from Henry George onward have argued that the efficient solution is to capture publicly created land value through taxation or lease terms. Portland's deal does the opposite.

An important caveat from Sacramento: Dan Barrett also negotiated a similar development deal on behalf of the city of Sacramento for the Kings' Golden 1 Center district. Willamette Week reports that district revenues there have twice failed to meet bond obligations, compelling the city to access its general fund. District-anchored development is not a guaranteed revenue engine, and this risk should temper both the owner's and the public's expectations.

9. Dundon's Payoff Matrix: How Much Leverage Does Portland Actually Have?

The analysis so far has asked what the city should demand. This section asks a harder question: what can the city get? The answer depends on understanding Dundon's actual financial position, his alternatives, and where his true walk-away point lies. Standard negotiation theory holds that the surplus from any deal should be divided based on each side's alternatives—not based on who asks more loudly. If Dundon's alternatives are poor, the public can claim a much larger share of the surplus than the current deal reflects.

What the renovation is worth to Dundon:

The renovation directly increases Dundon's franchise value in two ways. First, it adds an estimated $30–50 million per year in new revenue from premium seating, modernized suites, enhanced naming rights, and expanded event hosting capacity. At the NBA's current median revenue multiple of roughly 13–15x, this revenue uplift translates to $400–750 million in additional franchise value. Second, a modern arena removes the single largest discount factor on the Blazers' valuation; CNBC valued the franchise at $3.65 billion before the renovation was proposed, and Dundon is paying $4.25 billion in part on the expectation that public renovation funding will materialize.

Even without the renovation, Dundon's investment is almost certainly profitable. At 6% annual franchise appreciation (well below recent NBA averages of 18–20%), the Blazers would be worth roughly $13.6 billion in 20 years—a gain of $9.35 billion on a $4.25 billion purchase. The new $76 billion media deal provides each team approximately $230 million per year in national media revenue, creating an extraordinarily strong floor under franchise economics. Dundon's own record confirms this: he turned a $425 million Hurricanes purchase into a $2.66 billion valuation in seven years—a 30% annual return—and is now selling minority stakes to monetize that appreciation. The renovation is not a survival question for Dundon. It is a value maximization question.

Note: 20-year values assume 6–10% annual appreciation from the $4.25B purchase price. Dundon net gain is franchise value minus purchase price minus renovation cost. Media deal revenue ($230M/yr per team) not included in appreciation estimates.

The table reveals something important: Dundon's net gain varies by only about $600 million across scenarios A through C—the difference between paying nothing and paying everything. But even in Scenario C, where he funds the entire renovation himself, his 20-year return is roughly $14–24 billion. The renovation is profitable for Dundon regardless of who pays for it. Every public dollar contributed is pure surplus transferred to the ownership group.

The strongest counterargument — and why it doesn't change the conclusion:

The most credible response from the ownership group is: "I paid $4.25 billion specifically because I expected the state and city to cover the renovation. If you pull the public funding, you've changed the terms of the deal." This argument deserves to be taken seriously. CNBC valued the Blazers at $3.65 billion before the renovation proposal was on the table. Dundon paid $4.25 billion—a gap of roughly $600 million. It is plausible that some or all of that premium reflects the expectation of public funding.

Let us accept the strongest version of this argument and see whether it changes the conclusion. Assume the entire $600 million gap was a premium paid in anticipation of public subsidy—that without public funding, the franchise is worth only $3.65 billion and Dundon effectively overpaid by $600 million. What happens if he then self-funds the renovation?

Even under the most generous interpretation of Dundon's position—accepting that the entire purchase premium was a bet on public funding—self-funding the renovation roughly breaks even against the premium he paid, and he still captures $9+ billion in long-term appreciation. He is not underwater. He is not at risk of loss. He is, at worst, slightly less far ahead than he expected to be.

Three additional points weaken this counterargument further. First, the premium was his risk, not the city's obligation. He signed the purchase agreement before SB 1501 passed. Sophisticated investors price political risk into acquisitions constantly; when the risk does not pay off, they do not send the bill to the public. Second, the purchase agreement is already signed at $4.25 billion. Walking away from an NBA franchise acquisition—in a market where teams almost never become available—to avoid self-funding a renovation that pays for itself is not rational. The sunk cost of the purchase price locks him in more tightly than any lease provision could.

Third, Dundon's own Hurricanes transaction this week undermines the argument's logic. He purchased the Hurricanes for $425 million, received $300 million in public arena funding in Raleigh, and the franchise is now valued at $2.66 billion. If we take his reasoning seriously—that he paid a premium because he expected public help—then the public subsidy in Raleigh was already priced into his $425 million purchase. The $2.24 billion in appreciation above his purchase price was pure upside, captured entirely by Dundon. He is now monetizing it by selling a 12.5% minority stake. The pattern is: pay a price that assumes public subsidy, receive the subsidy, capture 100% of the resulting appreciation, and then argue that the next city also owes a subsidy because it was priced in again.

Why the relocation threat is not credible:

NBA Board of Governors approval. Relocation requires 16 of 30 team governors to approve. The last attempted NBA relocation—the Sacramento Kings to Seattle in 2013—was rejected 22–8. Governor appetite for relocation has only decreased since, as the league pursues expansion to Seattle and Las Vegas, which absorbs the most attractive destination markets.

Relocation fees. Any relocation would require a fee likely in the hundreds of millions of dollars, payable to the league. Combined with the cost of securing or building a new arena ($1.5–2+ billion), relocation destroys the financial advantage Dundon gains from avoiding the $600 million renovation cost.

Dundon's own actions reveal his hand. He has already accepted a 20-year lease requirement and relocation penalties in the -3 amendment. You do not accept those terms if you are planning to leave. NBA Commissioner Silver stated publicly that "relocation is not on the table now." Dundon paid $4.25 billion specifically for the Portland market. Walking away from a $600 million public subsidy to avoid paying rent of $4–5 million per year is not a rational move.

The walk-away-from-purchase risk:

The more credible risk is not relocation but that Dundon could decline to close the purchase if deal terms change. This deserves serious consideration. However, even this threat is constrained: Dundon has signed a purchase agreement, NBA franchises rarely become available, and the new media deal makes every franchise extraordinarily valuable. Walking away from an NBA franchise acquisition over lease terms that total $10–15 million per year—less than 4% of the team's estimated annual revenue—would be economically irrational. The lease terms proposed in this report would reduce Dundon's 20-year surplus by roughly 1–2%. That is not a dealbreaker. It is a rounding error on a $4.25 billion acquisition.

The practical implication is that Portland has far more leverage than the political conversation suggests. The city is negotiating from a position of genuine strength: it owns the building, it controls the lease, and its counterparty needs the renovation more than the public does. The risk of overplaying the city's hand is real but small. The risk of underplaying it—which is what the current deal does—is a certainty. A well-advised private investor in Portland's position would test this leverage. The question is whether the city's elected officials are willing to negotiate like investors rather than supplicants.

10. Understanding the Man Across the Table

Section 9 presented the objective financial analysis of Dundon's position. But negotiation is not purely mathematical—it requires understanding the psychology and decision-making framework of the person across the table. Fortunately, Dundon has described his own philosophy extensively in public interviews. His words confirm every conclusion the payoff matrix reaches.

He is not in a rush.

In a 2018 interview shortly after purchasing the Carolina Hurricanes, Dundon said of the arena development process: "I'm usually in a rush to do stuff. This one, I'm not in a big rush. I just want to make sure we do it right... there's not a deadline where it has to be done in a certain time." This directly contradicts the urgency narrative being used to pressure council. If Dundon himself says there is no deadline, why is the city being told it must commit hundreds of millions of dollars immediately or risk losing the team?

He understands franchise ownership is enormously profitable.

On buying the Hurricanes, Dundon said: "I didn't think this was a good financial decision when I did it." He described the purchase partly as an ego decision—"how much ego I could appease of my own just to have a team." That ego purchase turned into a $2.66 billion asset from a $425 million investment. A man who has personally experienced a 6.25x return on a franchise he bought on a whim understands exactly how profitable the Blazers will be. He is not going to walk away from a $4.25 billion acquisition because Portland asked for rent.

He sees sports as supply and demand.

Dundon described his approach to team operations: "It's supply and demand a little bit, right? We have the supply. It's a fixed amount of supply. It's just how much demand will there be." He openly acknowledges that the NBA is a cartel with fixed supply—the scarcity that gives franchise owners their leverage. But the supply of willing cities with existing publicly owned arenas is also fixed and shrinking. He knows Portland can't replace the Blazers. The city should recognize that he can't easily replace Portland, either.

He adapts faster than the people across the table.

On decision-making, Dundon said: "Try to figure out when you're wrong quick so you can get to go do what's right... I don't know why anybody would ever worry about being wrong." Sports Business Journal has credited his success to his "calculating nature" as a "super competitive" owner who does "whatever it takes to win." NHL agents voted him the worst owner in the league to negotiate against—not because he is unfair, but because he is relentlessly efficient at extracting maximum value. This is the person sitting across the table from council members who received an eight-minute verbal briefing with no written financial analysis.

He is ruthlessly rational.

Dundon on his decision-making framework: "I won't do anything that's not best for the team... the only variable is, is it going to help us win the most games for the longest amount of time." This is a man who makes decisions based on cold calculation, not emotion. Apply that framework to the current negotiation: accepting lease terms of $10–15 million per year in exchange for $365 million in state-funded renovations is obviously "best for the team." Refusing standard lease provisions and forfeiting $365 million in free arena improvements is not. Dundon's own philosophy dictates that he takes the deal.

Source: Tom Dundon interview, WRAL Raleigh, 2018. Available at youtube.com/watch?v=JTB78lu_lWo

11. Recommendations for the City's Negotiating Position

The payoff analysis in Section 9 leads to a clear hierarchy of outcomes for Portland's residents. These are listed in order of economic rationality:

First-best outcome: The city contributes the minimum and extracts the maximum.

As this report has established, it never made sense for the public to subsidize this renovation. The renovation is profitable for Dundon regardless of who pays. Every public dollar is a pure transfer to an ownership group that would fund the work itself. Acting as an investor in a billionaire's private enterprise is not a rational use of public money.

But that is not where we are. The state has passed SB 1501. The bond framework exists. And because of how the law is structured, Portland now faces an unusual opportunity: the state is prepared to divert $365 million from the Oregon General Fund to renovate a building that sits in Portland. That state money physically improves a Portland-owned asset—this is genuinely good for the city. But SB 1501 requires the city to commit its own funds as a precondition for the state bonds being issued. Portland would prefer to commit zero. Every dollar the city does commit is a transaction cost—the price of unlocking the state money—not a voluntary investment in Dundon's enterprise. Concessions the city extracts through lease terms, however, flow 100% to Portland.

The principle that should govern the city's approach is simple: Dundon should receive zero net public subsidy. Every dollar of public money that flows to his benefit should come back to the public through lease terms, concessions, or direct cash payments. The city should commit the minimum amount DAS will accept as "binding and substantial"—likely $75–125 million—and attach binding conditions to its resolution: rent, PILOTs, naming rights participation, revenue sharing, affordable housing, project labor agreements. Every concession can be structured as a cash equivalent: "provide this concession, or pay the city the same amount in cash." The target is 100% recovery of the city's contribution.

The joint authority created by SB 1501 will have its own internal dynamics. The state, as the larger investor at $365 million, will independently push to recoup its money. Portland and the state will each advocate for their own residents' interests in how the returns are divided. That is fine—that is the normal political reality of any multi-jurisdictional partnership. But what both sides of the authority should be completely aligned on is the foundational principle: the public does not give Dundon a single dollar in net subsidy. Everything the public puts in should come back to the public. Portland's council members were elected to maximize benefit to Portland residents. The state's representatives were elected to maximize benefit to Oregon taxpayers. Neither was elected to enrich a billionaire franchise owner. This report is designed to equip Portland's council to do its job.

Second-best outcome: The city contributes nothing and lets Dundon self-fund.

If the council determines that it cannot secure adequate lease terms—or that the political cost of participating in the deal is too high—the fallback is to decline participation entirely. The renovation still happens because Dundon would self-fund: the $4.25 billion franchise becomes $13–29 billion over 20 years, and the renovation adds $400–750 million in franchise value. The Warriors and Clippers ownership groups privately funded $1.4 billion and $2 billion arenas respectively. The relocation threat is not credible. Dundon's track record confirms this: he turned a $425 million Hurricanes purchase into a $2.66 billion valuation in seven years with the help of $300 million in public arena funding from Raleigh, and is now monetizing that appreciation by selling minority stakes. Under this outcome the city retains its $120 million for other priorities and forfeits the state money—but also forfeits nothing it currently has.

Worst outcome: The city contributes $400 million with no lease terms.

This is the current trajectory. Under the deal as structured, the city commits $400 million in public money—$120 million upfront and $14 million per year for 20 years—and receives no rent, no naming rights revenue, no PILOT payments, and no revenue participation. The city's $400 million buys nothing except the continued presence of a team whose owner would keep it in Portland anyway because leaving is more expensive than staying. This outcome transfers roughly $145–206 million in present value from Portland's residents to the ownership group, measured against what the city would recover under standard commercial lease terms. It is the equivalent of a landlord paying to renovate a tenant's space and then not charging rent.

The council is not obligated to accept this outcome. No vote has been taken on the city's contribution. The letter council members signed expressed support for SB 1501 at the state level; it did not commit to any specific city terms. Every dollar the city contributes and every lease term the city negotiates is within the council's authority to decide.

12. The City's Leverage Under SB 1501

A common concern among council members is that demanding lease terms could jeopardize the state's $365 million in bond funding. This concern is understandable but misplaced. A careful reading of SB 1501 reveals that the bill actually gives the city substantial room to set conditions. But before examining the leverage, it is worth stating plainly how the money flows—because confusion about the mechanics undermines the city's ability to negotiate effectively.

How the money actually flows:

SB 1501 creates a mechanism for the state to issue up to $365 million in bonds, repaid by diverting income taxes from Rose Quarter employers, construction workers, and performers out of the Oregon General Fund and into an Arena Fund. This is state money—Oregon taxpayer revenue that would otherwise fund education, healthcare, and public safety—being redirected to renovate a building that sits in Portland.

The renovation itself physically improves a Portland-owned asset. State money flows into Portland. This is genuinely good for the city. The problem is not where the renovation money goes—it is who captures the revenue the renovated building generates. Without lease terms, 100% of the increased revenue (from modernized suites, premium seating, naming rights, expanded events) flows to Dundon. Portland's building gets nicer. Dundon captures all the value of the nicer building.

Here is the critical point: SB 1501 does not simply hand Portland the state money. It requires the city to commit its own money as a precondition for the state bonds being issued. Section 5(5) states that no bonds may be issued unless DAS determines that Portland and Multnomah County have made "binding and substantial commitments to finance construction, renovation, maintenance and deferred maintenance of the Moda Center." This means Portland must spend its own funds—not just agree to accept the state's funds—before the state money flows.

Portland would prefer to commit zero of its own money. The renovation is profitable for Dundon regardless of who pays, and the state money alone would be sufficient to fund it. But SB 1501 requires a city co-investment as a trigger. Every dollar the city commits is therefore a transaction cost—the price of unlocking $365 million in state General Fund revenue that flows into Portland's building. It is not a voluntary investment in Dundon's enterprise. It is the minimum necessary to activate a funding structure that benefits Portland.

The strategic logic follows directly: the city commits whatever DAS will accept as "substantial" (the statute does not define this term or specify a dollar amount), attaches binding lease conditions to its commitment ensuring the operator pays back the value it receives, and recovers 100% of the city's own contribution through those lease terms. The net result is that state money renovates Portland's building, Dundon pays for the privilege of operating in it, and the city gets its transaction cost back. Dundon receives zero net public subsidy. This is the governing principle of the entire recommendation.

What "binding and substantial" means—and does not mean:

Section 5(5) of SB 1501 states that no bonds may be issued and no tax revenue may be diverted unless "the department has determined that the City of Portland and Multnomah County have made binding and substantial commitments to finance construction, renovation, maintenance and deferred maintenance of the Moda Center and related debt service." The key words are "binding and substantial." The bill does not define "substantial." It does not specify a dollar amount. And critically, it says nothing about the commitment being unconditional.

A council vote to commit $120 million with lease terms attached—rent, PILOTs, naming rights participation—is exactly as "binding and substantial" as a $120 million commitment without them. DAS has no basis under the statute to reject a commitment because it includes standard commercial lease provisions. Attaching conditions makes the commitment smarter. It does not make it less substantial.

Does the state money actually benefit Portland?

A natural instinct is to view the city's contribution as leverage: spend $75–125 million to unlock $365 million in state-funded improvements to a building Portland owns. A 3:1 to 5:1 ratio sounds like a good deal. But three factors complicate this picture substantially.

First, the state is taking co-ownership. Section 5(2)(a) of SB 1501 requires the state to take "an ownership interest in the Moda Center that the department determines is greater than a nominal interest." Portland is not receiving $365 million in free improvements to its building. It is giving up partial ownership of the building in exchange. The city currently owns the Moda Center outright. After this deal, it will not.

Second, the increased value of the renovated building flows almost entirely to Dundon, not to Portland. The renovation generates an estimated $30–50 million per year in new revenue from premium seating, modernized suites, enhanced naming rights, and expanded event hosting. Without lease terms, every dollar of that revenue goes to the operator. Portland's building gets nicer, but Portland captures none of the revenue that the nicer building generates. It is the equivalent of renovating a rental property at the landlord's expense and then allowing the tenant to keep all the increased rent.

Third, the state money is not free. It comes from income taxes that would otherwise flow to the General Fund, which pays for a wide range of state services including education, healthcare, and public safety. The tax diversion mechanism in Section 4 redirects wage withholdings from Rose Quarter employers, construction workers, and performers from the General Fund to the Arena Fund. For Portland residents, this means the state "investment" in the Moda Center comes at the cost of reduced General Fund revenue available for other priorities.

The bottom line: the city's contribution only makes financial sense for Portland if the lease terms ensure the city captures a share of the value the renovated building generates. Without terms, Portland is spending $75–125 million to make a private operator's business more profitable inside a building the city used to fully own and will now only partially own, funded by tax revenue diverted from public services. That is not a 3:1 leverage ratio. It is a transfer.

The false dilemma:

The implicit argument being made to council members is: "If you attach conditions, Dundon will refuse to sign, and the state money disappears." But follow the logic. If Dundon refuses to sign a lease because the city demanded standard protections that exist in 9 of 12 comparable NBA deals, then Dundon killed the deal, not the council. The council made a binding and substantial commitment. The other side refused standard terms. That is an extraordinarily defensible political position—far more defensible than having voted to hand over $120 million with no return.

And as the payoff matrix in Section 9 demonstrates, Dundon will not refuse. Walking away from a $4.25 billion franchise acquisition over lease terms that total $10–15 million per year—less than 4% of the team's annual revenue—is not a rational move. The choice before council is not "contribute with no terms or lose the state money." The choice is "contribute with terms or contribute without terms." The state money flows either way.

The joint authority does not diminish the city's leverage:

SB 1501 creates a joint authority between the state and the city to own and oversee the Moda Center. Some council members may worry that this structure subordinates the city to the state—that DAS or the governor could override the city's preferred lease terms. This concern gets the power dynamic backwards. The state cannot form the joint authority without the city, because the city owns the building. The state cannot issue bonds without the city making its "binding and substantial commitment." The city is not a junior partner being told what to do by DAS. It is a co-equal whose participation is a prerequisite for the entire structure to exist.

The chain of consequences is worth stating plainly: if the city declines to participate or declines to make a "binding and substantial commitment," no joint authority is formed. If no joint authority is formed, the conditions in Section 5 are not met. If those conditions are not met, no bonds are issued and no tax revenue is diverted. The state legislation becomes a dead letter. Every other party—the state, the county, Dundon—needs Portland to say yes. That is not weakness. That is the strongest negotiating position any party at the table holds.

This means the city can condition its participation in the joint authority on the authority's lease with the management entity including specific terms—rent, PILOTs, naming rights sharing, community benefit requirements. The mechanism is straightforward: when council votes on its commitment, the resolution itself can include binding conditions that must be reflected in the joint authority's lease agreement with the operator. These are not requests. They are terms of the city's participation. If the joint authority negotiates a lease that does not include the city's conditions, the city's commitment has not been satisfied, and the city is not bound.

If anything, the co-ownership structure should make the state more interested in strong lease terms, not less: the state is now a co-owner too, and both public parties benefit from the operator paying rent on a building they jointly own.

The negotiator gap—and what it means for leverage:

The -A13 amendment to SB 1501 requires the involvement of "an experienced negotiator" to safeguard public interests during lease discussions. The city has engaged Carl Hirsh of Stafford Sports, a New Jersey-based firm with deep experience in arena development. Stafford's website describes services that include negotiation of "binding Term Sheets" and tenant leases, and its client list includes both municipalities and private sports entities. The firm has the credentials and the capability to serve as lead negotiator with binding authority.

Two things about this engagement merit scrutiny. First, Hirsh's most prominent credential is serving as President of Spectacor Development in Philadelphia, where he was the key negotiator on behalf of Comcast-Spectacor—a private sports conglomerate—negotiating against the City of Philadelphia and the Commonwealth of Pennsylvania. He secured development rights for the private side. He has worked with public clients as well, but his career-defining work was extracting concessions from cities on behalf of owners. This does not mean he cannot effectively represent Portland's interests. It means the council should understand whose interests his experience was built to serve, and should ensure his engagement is structured with clear instructions that prioritize the public's financial return.

Second, and more critically: under the -A13 amendment, the negotiator's role appears to be advisory and non-binding. This is the precise gap that the Raleigh comparison exposes. In Raleigh, Dan Barrett of CAA Icon served as lead negotiator with binding authority on behalf of the Centennial Authority. He secured $4.5 million per year in rent, ground lease payments at 6% of fair market value, PILOTs, 10% affordable housing, and $10 million in team-funded improvements. Barrett had the power to walk away from terms that did not meet the public's threshold. An advisory negotiator who can recommend but not commit does not have that power—and the other side of the table knows it.

The leverage implication is direct: if the city wants its negotiator to function as a genuine counterweight to Barrett and the Blazers' team, the council must grant binding negotiating authority with clearly defined minimum terms. A negotiator who reports back to twelve council members for every decision is not a negotiator—it is a messenger. Barrett does not operate under those constraints. The council should ensure its representative does not either. This is a decision the council can make at any time, and it costs nothing.

The implicit subsidy that no one is naming:

There is a point that has been largely absent from the public conversation. Not charging rent on a building the city owns is economically identical to charging rent and then handing the tenant a cash subsidy for the same amount. If fair market rent on the Moda Center is $5 million per year and the city charges $0, the city is subsidizing the operator $5 million per year. The fact that this subsidy does not appear as a line item in any budget does not make it less real—it simply makes it less visible, which is precisely why it is structured that way. Every year that Portland charges no rent on the Moda Center is a year that Portland is writing the ownership group a check. The city is simply not calling it that.

The Seattle precedent—and how to reveal the true market price:

The implicit subsidy described above is not theoretical. A city-owned arena 170 miles north of Portland already demonstrated what happens when the public acts like a landlord. In 2017, the City of Seattle issued a request for proposals to redevelop its city-owned KeyArena. Two sophisticated arena operators—AEG/Seattle Partners and the Oak View Group (OVG)—bid competitively for the right to lease the building. OVG won. The result:

OVG privately financed the entire $1.15 billion renovation. Zero city money. Zero taxpayer risk. All cost overruns absorbed by OVG. The City of Seattle retained ownership of the building. OVG signed a 39-year lease with two eight-year renewal options. The city collects rent. OVG is responsible for all operations and maintenance for the life of the lease. The renovated arena—now Climate Pledge Arena—hosts the NHL's Seattle Kraken and the WNBA's Seattle Storm, and is NBA-ready.

Portland owns a nearly identical asset: an aging city-owned arena that needs renovation. Portland is doing the opposite of what Seattle did: funding the renovation publicly, charging no rent, and transferring all upside to the tenant.

Portland does not need to replicate Seattle's approach—SB 1501 has already created a different structure. But the Seattle precedent reveals an important mechanism the city can use as leverage. Portland could lease the Moda Center to any qualified arena management company with the right to sublease to the Blazers. Multiple operators would bid. The winning bidder would charge Dundon market rent—because that is how they would make money on the lease. Competitive bidding among lessees would reveal the true market rental value of the building. Nobody in that chain does this for free.

This is a form of what economists call a Vickrey auction: the competitive process forces bidders to reveal their true valuations. Dundon himself could bid, and would be motivated to do so—leasing directly from the city is cheaper than paying a middleman's markup. He would bid at or just above the next-highest bidder to cut out the intermediary. The city captures the surplus either way: either Dundon pays market rent to avoid the middleman, or someone else leases the building and the city collects regardless. If a third-party lessee overestimates what Dundon will pay in sublease rent, that lessee absorbs the loss—not the city. The downside risk transfers entirely to the private sector.

The city does not actually have to conduct this auction. The point is that the possibility of doing it proves the implicit subsidy is real and quantifiable. If an arena operator would pay the city $5 million per year for a master lease because they can charge Dundon $8 million per year in sublease rent, then the city not charging rent is a subsidy of at least $5 million per year. The market is telling the city the price. The city is simply choosing not to collect it. And if the Blazers' negotiating team resists standard lease terms, the council has a credible response: "We can put the master lease out to competitive bid and let the market decide the rent. Would you prefer to negotiate with us, or with Oak View Group?"

This competitive lease path is not just a theoretical alternative to SB 1501. It is a genuine fallback—and in some respects a superior one. The SB 1501 path carries real risk for Portland. The city commits its own funds, enters a joint authority with the state, and then must negotiate with both Dundon and the state over how the returns are divided. The state is putting in $365 million—nearly three times the city's share—and has every incentive to recoup its own investment first. There is no guarantee that Portland comes out ahead in that negotiation. The city could end up subsidizing Dundon and getting outmaneuvered by the state on the split.

The competitive lease path carries essentially zero risk for the city. Either Dundon wins the auction—in which case the city captures his true valuation—or a third party wins and the city collects market rent regardless. If the third-party lessee overestimates what Dundon will pay in sublease rent, they absorb the cost, not the city. All downside risk transfers to the private sector. The city retains full ownership with no co-ownership dilution, no joint authority to navigate, and no state partner claiming the lion's share of returns.

If the city wants to reflect the positive externality of having the Blazers specifically—the civic pride, the cultural identity, the non-financial value of a major professional sports franchise—it can do so explicitly by applying a defined "city discount" to Dundon's bid. For example, the city could treat Dundon's bid as though it were $50 million higher than its face value, reflecting the community's willingness to subsidize the Blazers' presence up to that capped amount. This makes the subsidy transparent, bounded, and democratically defensible—rather than leaving it as an unquantified justification for a blank check. The city is saying: "We value having the Blazers at $50 million. That is the discount. Everything else is market rate."

The ideal use of this analysis is not to abandon SB 1501, but to discipline the negotiation within it. The council's message to the Blazers and to the state becomes: "We can proceed under SB 1501 with strong lease terms that ensure zero net public subsidy. Or we can skip the state money entirely, auction the master lease competitively, and let the market set the price. We prefer the first path—but only if the terms justify the risk of a joint authority where the state claims the majority position. The alternative is always available." That credible alternative is what makes the SB 1501 negotiation work in the city's favor.

The three-way dependency—and why the city cannot simply "shop" the building:

SB 1501's bond repayment mechanism is funded by diverted income taxes from Rose Quarter employers, construction workers, and performers. The Blazers are those employers. Player salaries, team staff, visiting teams, concert performers—that is where the estimated $20 million per year in diverted tax revenue comes from. No Blazers operating in the building means no tax revenue stream, no bond repayment, and no bonds issued. The entire legal architecture presupposes a tenant generating the revenue that services the debt.

This means the city cannot use SB 1501 to renovate the building independently and then lease it to a different operator. The law is structurally dependent on the Blazers being the tenant. There is no alternative NBA franchise to court—teams are not transferable commodities—and no non-NBA tenant would generate the income tax revenue that repays the bonds. The suggestion that committing city funds to the renovation gives Portland leverage to "shop" the building to other tenants misreads how SB 1501 works.

But this dependency runs in all directions. Dundon needs the city to unlock the bonds. The city needs the state to fund the renovation it cannot afford alone. The state needs Dundon to generate the tax revenue that repays the bonds. No party can walk away without the whole structure collapsing, and collapse is worse for Dundon than for anyone else—he is the one sitting on a $4.25 billion asset in a 30-year-old building that he would then need to renovate at his own expense.

This three-way dependency is precisely why all parties should welcome strong lease terms. Nobody is going to torpedo a deal worth hundreds of millions over standard commercial provisions. The interdependence protects the deal. What it does not protect is the status quo of no terms—because the city is the one party that can condition its participation, and without the city's participation, nothing else works.

The information environment:

The political pressure on council to accept the deal without terms is driven in significant part by a public that lacks basic information about the transaction. In real-time public discourse following the publication of this analysis, the majority of engaged Portland residents demonstrated that they did not know the city owns the Moda Center, did not know Dundon is contributing $0 in private capital, and were arguing based on relocation fears that do not survive contact with the financial data in this report. Many confidently asserted that the deal was a "no-brainer" while being unaware that comparable deals in other cities include protections that Portland's does not.

This is not a criticism of the public. It is a description of the information environment in which council is being asked to make a decision worth hundreds of millions of dollars. When the public conversation operates at the level of "save the Blazers" versus "don't subsidize billionaires," council members who demand specific lease terms have no political cover—even when the terms are standard, precedented, and financially justified. Correcting this information asymmetry—whether through public education, media engagement, or a formal deliberative process—is essential to creating the political conditions in which good terms become achievable.

13. A Note on District 2 and the Rose Quarter

The Moda Center sits in Portland's Rose Quarter, within Council District 2. This geography carries particular significance. The Rose Quarter and surrounding Lower Albina neighborhood were historically the center of Portland's Black community before being devastated by urban renewal, freeway construction, and stadium development in the mid-twentieth century. The Albina Vision Trust, which advocates for equitable redevelopment of the neighborhood, testified in support of SB 1501.

If the sports and entertainment district develops as the -3 amendment envisions, the question of who benefits from that development is not merely financial—it is a question of whether Portland repeats or corrects a historical pattern. Development rights protections, community benefit agreements, affordable housing requirements (which Raleigh's deal includes at 10%), and local hiring provisions are not additions to the deal. For the Rose Quarter specifically, they are prerequisites for legitimacy.

It is important to recognize that demanding better lease terms does not conflict with the goals of the Albina Vision Trust or organized labor—it advances them. AVT wants equitable development of the Rose Quarter. The current deal contains no affordable housing requirement, no community benefit agreement, and a district tax capture mechanism that diverts economic value from new development to arena debt service rather than back into the community. Labor wants construction jobs, operating jobs, and fair wages. Those jobs come from the renovation happening—not from the government paying for it. If Dundon self-funds, the same workers get hired. And a deal with strong terms could include project labor agreements that serve union interests better than the current deal, which contains none.

The argument that demanding better terms threatens these constituencies is precisely backwards. Every stakeholder's interests—the Black community's, labor's, the city's—are better served by a deal with enforceable protections than by a deal without them. The only party whose interests are harmed by adding protections is the ownership group. Verbal promises that are not in the lease are worth exactly $0 the moment the other side finds them inconvenient. If terms have been agreed to informally, putting them in writing costs nothing. If the other side will not put them in writing, they have not actually been agreed to.

Appendix: Cash-Equivalent Flexibility and Efficient Negotiation

The financial professionals on the other side of this negotiation operate with precision. They model every scenario, price every concession, and structure every term to maximize their position. They have done this hundreds of times, across dozens of cities, with billions of dollars at stake. They do not deliberate—they calculate.

If you sit down across the table from someone who has spent a career extracting value from public negotiators and expect to wing it, you will be outmaneuvered. This is not speculation—it is the exposed mechanism behind every stadium deal in which the public contributed hundreds of millions and recovered nothing. The pattern repeats because the sophistication gap repeats.

It is not customary to present this level of financial mechanics to elected officials. But the situation demands it, at least until the city has hired a professional negotiator with binding authority who can operationalize these principles in real time at the table. Until that person is in place, the council itself is the negotiator, and the council needs to understand the logic that the other side is already using. What follows is that logic.

Every concession in Section 10 ultimately reduces to a dollar amount. Rent of $4–5 million per year is worth $4–5 million per year. A 50% share of naming rights is worth whatever half the naming rights contract pays. A PILOT of $1.2 million is worth $1.2 million. This observation has a practical implication: each line item can be presented to the ownership group as a choice. The city can say, for each term: "provide this concession, or pay the city the equivalent in cash."

This approach has three advantages:

It collapses structural objections. If the ownership group argues that naming rights are complicated, or that PILOTs are not standard in Oregon, or that revenue sharing creates accounting burdens, the response is simple: then pay the equivalent in cash. The mechanism is negotiable. The dollar figure is not. This moves the conversation from process disputes to the only question that matters: how much.

It increases economic efficiency. Different concessions may be worth different amounts to each party. If naming rights participation is worth $3 million per year to the city but costs the ownership group $5 million per year in lost flexibility (because bundling naming rights with sponsorship deals is more valuable than selling them separately), then both sides are better off if the city takes a $4 million cash payment instead. The city gets more than the concession was worth to it; the ownership group pays less than the concession would have cost. This is the basic logic of efficient exchange: let each asset go to whoever values it most, and settle the difference in cash. By attaching a price to every line item, the city creates a menu that allows the ownership group to optimize across terms while the city captures at least its reservation value on each one.

It can only help the city's position. Offering a cash alternative to each concession strictly expands the ownership group's options—it never removes one. If the city sets cash equivalents at or below what it genuinely considers the concession to be worth, the city is indifferent between receiving the concession or the cash, and the ownership group gains the flexibility to choose whichever costs it less. This makes agreement easier without costing the city anything. It is a Pareto improvement over presenting the concessions as non-negotiable in form.

In practice, this means the recommendations table in Section 10 could be presented to the ownership group as follows:

The ownership group can mix and match—accept some concessions in kind, buy out others in cash—as long as the total value to the city meets the floor. This is how sophisticated private-sector negotiations work. There is no reason the public side should negotiate with less flexibility.

The difference between leaving $150 million on the table and recovering it is not political will. It is analytical preparation. The city can match the other side's rigor. But only if it decides to.

14. The Playbook: How Markets Solve This Problem

Everything in this report—the payoff matrices, the comparable deals, the leverage analysis, the Raleigh precedent, the Seattle model—reduces to a simple insight: there is one right way to structure this deal, and it requires no guesswork, no political courage, and no faith in the other side's goodwill. The market does the work.

Step 1: Let competitive bidding reveal the true price.

Portland owns the Moda Center. It should lease the building the way any rational owner leases a valuable asset: through competitive bidding. Issue a request for proposals. Invite arena operators (OVG, AEG, ASM Global, and others) to bid on a master lease with the right to sublease to the Blazers. Dundon can bid too. In fact, he is motivated to—leasing directly from the city is cheaper than paying a middleman's markup.

This is a form of Vickrey auction. The competitive process forces bidders to reveal their true valuations. The city does not have to guess what the building is worth, does not have to rely on a negotiator to extract the right number, and does not have to bluff. The market tells the city the price. If Dundon's bid reflects the true value of the building, he wins. If it doesn't, someone else wins and the city collects regardless. If a third-party lessee overestimates what Dundon will pay in sublease rent, that lessee absorbs the loss—not the city. All downside risk transfers to the private sector.

Step 2: Name the Blazers discount explicitly.

Portland values having the Blazers. That value is real—civic identity, cultural significance, community pride. But it is not infinite, and it should not be hidden. The city should put a number on it. Call it the "positive externality discount"—an explicit, bounded, publicly stated amount that reflects what keeping the Blazers in Portland is worth to the city above and beyond market rent.

The city council names the number: $10 million per year, $50 million capitalized, $300 million—whatever the council determines the civic value to be. In a competitive bid, Dundon's offer is treated as though it were that amount higher than its face value. If the discount is $50 million and Dundon bids $5 million less than a competitor, he still wins—because the city has explicitly decided that keeping the Blazers is worth $50 million.

This changes everything. If Dundon walks away, it was worth it by definition—the city already decided the maximum price it would pay for the externality, and Dundon's demands exceeded it. There is no regret, no second-guessing, no "did we lose the team over a few million dollars." The city named its price. Dundon chose not to meet it. That is not the city's failure. It is Dundon's choice. And as the payoff matrix demonstrates, it is a choice he will almost certainly not make—because walking away from $365 million in free arena improvements over the difference between market rent and a discounted rent is not rational.

There is an additional elegance to this approach. Standard tax incidence analysis tells us that Portland will recoup a significant share of the Blazers discount through the fiscal externalities the team generates—player income taxes, employee payroll taxes, business license taxes, visitor spending that cascades through local businesses. These revenues exist only because the Blazers are in Portland. A generic arena operator would not generate them. So the "real cost" of the discount to the city is less than its face value, because part of it flows right back through the city's own tax base. In the best case, the fiscal externality exceeds the discount entirely, meaning keeping the Blazers is free after accounting for the tax revenue they generate. In the worst case, the city bears a small, bounded, transparent cost that it has explicitly chosen to accept. Either way, the subsidy is visible, accountable, and democratically defensible—rather than hidden inside a no-rent lease and justified by vague appeals to civic pride.

Step 3: Recognize the two separate negotiations.

Portland is not in one negotiation. It is in two. The first is with potential lessees—Dundon and any other party willing to operate in the building. That negotiation is solved by the competitive bid described above. The market sets the price. The city discount accounts for the externality. There is essentially zero risk.

The second negotiation is with the state, through the joint authority created by SB 1501. The state is offering $365 million in bond-funded renovations—but it is not offering them for free. The state will take co-ownership of the building. The state will claim the larger share of returns, having contributed nearly three times the city's share. The state's representatives will advocate for Oregon taxpayers, not Portland residents specifically. There is no guarantee that Portland comes out ahead in that negotiation.

The only reason to involve the state is if the city believes it can recoup more value from the SB 1501 structure than it puts in. That is possible—the city's contribution unlocks $365 million in state money that renovates Portland's building, and the city can attach lease conditions that flow 100% to Portland. But it is not guaranteed. The state will fight for its share. The joint authority introduces political complexity and co-ownership dilution. The city could end up subsidizing Dundon and getting outmaneuvered by the state.

The competitive lease path has none of these risks. No co-ownership. No joint authority. No state partner claiming the majority position. The city retains full ownership and the market sets the terms. This path should be the city's default—the outcome it accepts unless the SB 1501 terms are demonstrably better for Portland.

The bottom line:

15. Bridging the Gap: A Citizens' Assembly on Lease Terms

The financial analysis in this report is clear. The comparable deals are clear. The payoff matrix is clear. But none of that matters if council members face overwhelming political pressure from constituents who have not seen the numbers and believe the Blazers will leave if the city asks for rent. As the real-time public discourse demonstrated, the majority of engaged Portlanders do not know the city owns the building, do not know Dundon contributes $0, and are arguing based on relocation fears that collapse on contact with the data. That information gap is the single biggest obstacle to a fair deal.

A Citizens' Assembly can close it. Oregon pioneered the Citizens' Initiative Review—a process in which a randomly selected, demographically stratified panel of residents hears expert testimony from all sides, cross-examines witnesses, deliberates, and issues a public finding. The process has been used on state ballot measures since 2010 through Healthy Democracy and is internationally recognized as a best practice in deliberative democracy.

The proposal: convene a Citizens' Assembly specifically to evaluate the terms of the Moda Center lease. Not whether the deal should happen—the deal is happening. Not whether the Blazers should stay—they are staying. The panel's sole question is: given that the city is contributing public money, what lease terms should be attached?

This solves three problems simultaneously. First, it gives council members political cover. The demand for fair terms becomes a citizens' recommendation, not an individual politician's position. "A representative panel of 24 Portland residents examined the lease terms and concluded that rent, PILOTs, and community benefits are appropriate" is a fundamentally different political object than "Councilor X is risking the Blazers." Second, it creates preemptive negotiating leverage. The moment the Blazers' side learns that an informed panel is going to scrutinize the terms publicly, they rationally improve their offer before the finding is published. Third, it transforms the information environment. Twenty-four people who start the process with the same misconceptions as the general public will—after two weeks with the payoff matrix, the Raleigh comparison, and testimony from both sides—arrive at conclusions grounded in the actual data. Their finding becomes a public document that permanently changes the conversation.

The panel can be selected using publicly verifiable randomization—for example, the Sortition Foundation's open-source algorithm with a seed derived from an external source no one controls (such as a stock closing price on a predetermined date). Anyone can re-run the algorithm and confirm the selection was fair. The process is transparent, auditable, and uncorruptible.

16. Conclusion

The Trail Blazers should stay in Portland. The Moda Center should be renovated. These conclusions are not in question.

The question is whether the city uses its ownership—the most valuable asset at the table—to secure a fair return, or whether it hands over a commitment with no return. The tools are simple: competitive bidding to reveal the true market price, an explicit discount for the civic value of the Blazers, and a clear-eyed assessment of whether the SB 1501 path is better for Portland than the market alternative. If the answer is yes, the city enters the joint authority with binding lease conditions attached. If the answer is no, the city auctions the lease and lets the market work.

What the city cannot afford to do is contribute without conditions, without competitive price discovery, and without an explicit accounting of the public value at stake. That is the worst outcome for residents, and it is the outcome currently on the table. The council has the authority and the leverage to demand better. Whether it uses that leverage is the only remaining question.

Clay Shentrup is a Portland-based policy analyst with expertise in welfare economics, tax policy, and institutional design. He is co-founder of the Center for Election Science and co-founder of Election by Jury (www.electionbyjury.org).

Contact: wonk.blog  |  www.electionbyjury.org