The blank-check problem

Were these votes blank checks?

Legally, no, and officials will correctly say so. The County’s August 6 resolution is an affirmation plus instructions; its money still requires an intergovernmental agreement, a county-code change, and budget votes in 2027 and 2028. The City’s August 12 term sheet is nonbinding; its money still requires the definitive documents, due by December 31 with a Council vote targeted for December 17, and budget actions after that. Every vote below is a toll gate where the public can still speak and conditions can still be attached:

• Aug 6, 2026: the County board adopted its resolution and amendment slate.
• Aug 12, 2026: Council adopted the term sheet, 8–4, as amended and nonbinding; a cross-bloc amendment package passed 12–0.
• December 2026: Council votes the definitive documents, due by December 31. A December 17 target has been reported; confirm the published agenda before relying on the date. The County board takes up its IGA.
• 2027: closing conditions, the five conditions DAS wants met by the end of December for a spring 2027 bond sale, and budget appropriations at both governments. Any city ordinance is subject to referendum by petition.

But here is why “nonbinding” is cold comfort. In public deals, the number voted first becomes the anchor every later number is measured against, while the scope stays fluid. Not immovable: August 12 proved that, when a floor amendment moved the proposed rent from a dollar to $3.17M a year at commencement and a cross-bloc package passed 12–0. What an anchor does is shift the burden: after August, changing $573M requires someone to reopen a settled figure, and “we already committed” answers the scope question without ever examining it. The check isn’t blank. It is worse: the amount is pre-filled, and the payee writes the memo line later.

The clocks do not all end together

SB 1501 §5 conditions issuance and specified tax transfers on the executed lease and sufficient local commitments. Local commitments therefore cannot simply be conditioned on bonds already existing in a way that defeats the statute. Use a legally coordinated closing with separately defined construction and disbursement gates.

SB 1501 §4 tax capture runs through the statutory period based on the later of lease expiration and debt payoff. A contract cannot alone end capture at payoff while a longer lease continues. The statutory quarterly reporting provision sunsets January 2, 2032, so permanent reporting must be contractual.

The law requires expert comparables work; it does not expressly require a separate published final-deal-terms report in the form the former Register demanded. That can be a new public approval requirement. December is a consequential local negotiating/administrative target, not a signing cliff written into SB 1501. State tranche authorizations and practical issuance lead time still constrain delay.

Sources: Enrolled SB 1501 · Enrolled SB 5701 · August 12 City term sheet

The second commitment: what the term sheet pledges beyond $573 million

On August 6, in a council session called to consider amendments, Councilor Mitch Green, an economist, put a spreadsheet on the screen and showed what the term sheet commits beyond construction capital. Exhibit D pledges a second commitment: up to $275 million of Moda Center user fees, Blazers parking revenue and Veterans Memorial Coliseum income, committed to the arena over twenty years. The public ledger states the framework this way: $573 million of public renovation funding and up to $288.6 million of continuing support before financing; the $861.6M sum is neither a present value nor a binding all-in expenditure. Green’s arithmetic on the floor, in his words:

The mechanism matters as much as the number. Because that revenue is pre-committed, the City cannot borrow against it, which is why councilors have been told there is no money in the Spectator Facilities Fund for the City’s $120 million share, leaving the Portland Clean Energy Fund and the general fund as the remaining candidates. Green’s amendment would have freed that stream to bond against, funding the City’s entire share without touching PCEF or cutting services. He said plainly it would move him to yes on the term sheet.

It failed, 5–7. So did every other amendment offered that day: a rent line on a building the City owns and currently leases for one dollar a year (failed 6–6), a private-capital contribution from an ownership group that paid $4.25 billion for the franchise (5–7), a share of naming-rights revenue (5–7), an increase in the arena user fee from 6% to 7%, with the added point going to the City unrestricted instead of back into the building (6–6), a larger payment in lieu of property taxes (6–6), a requirement that Council receive a funding-source and opportunity-cost report 30 days before any vote (5–7), and a single sentence directing the Mayor to negotiate any return on investment at all (6–6). Eleven amendments reached a recorded vote. Zero adopted. [Correction, August 8: this page previously said “seventeen amendments.” More than eleven were filed, but eleven is the number that came to a roll call, and eleven is the number we can verify from the session record.]

The reason given was not that the ideas were wrong. The Council President stated before the first amendment was introduced that he would oppose all of them, because they had not been cleared with the administration’s negotiating team in advance. Councilors also established on the record that this was their only opening: executive sessions cannot take votes under Oregon’s public meetings law, and amendments at the December definitive-documents stage would come after the negotiation is finished. Councilors described August 12 as up or down. It did not turn out to be: eleven amendments failed on August 6, and on August 12 a twelve-vote package and a rent increase both carried. That is the strongest evidence on this page that the December documents are movable too, and the reason the scope gate below is worth asking for now.

Two more things about this money deserve plain statement. First, the $275 million pre-commitment does something subtler than block a bond. Money that can only be spent on the building is money the building’s operator has every reason to spend: once venue revenue is earmarked for arena capital, another club level, another scoreboard, another hospitality suite costs the operator approximately nothing to want. Without eligibility standards, an independent lifecycle plan, and an owner contribution formula, that stream is not a maintenance fund. It is a standing invitation. Second, a correction to this page, dated August 8. We wrote here that nothing says who pays when the project runs over. That was wrong, and the term sheet is better than we described: “All costs for the Renovation will be the sole responsibility of, and be paid for by, Rip City, except for the Public Funding Contribution… Anything in excess of the Renovation Budget as shown in Exhibit A is the responsibility of Rip City,” and the ownership entity is to provide “an unconditional guaranty.” That is a real protection and it should be said plainly.

What is wrong with it is subtler, and worse. An overrun is measured against a budget, and the budget is Exhibit A, the page that reads “to be attached.” The same clause then provides that “Rip City will provide an updated Renovation Budget to be set forth in the Definitive Agreements.” So the party that bears every dollar above the baseline is the party that writes the baseline, after the public money is already committed. A guaranty against overrun is only as strong as the baseline it is measured from, and a baseline the paying party writes for itself, after the public money is committed and with no independent line-by-line check, is one nobody has tested for padding. The protection is real. The number it protects against does not exist yet, the counterparty holds the pen, and no one has agreed to referee it.

The number came before the scope

Every private construction project runs in one order: scope, then budget, then commitment. This deal ran in reverse. The proof is in the City’s own July 16 draft term sheet, obtained under public records law. It priced the renovation at $573,000,000, “as itemized and shown in Exhibit A,” “based upon information to be verified.” Exhibit A was an empty page:

Meanwhile, the only independent scope document in existence is the City’s 2024 facility condition assessment, and it prices upkeep rather than a renovation: the VSG workbook sums to $252.9 million at its 2024 cost basis, a lifecycle capital figure, not a transformation price. No document anywhere in three governments’ processes reconciles the $573M ask to any scope at all. The number didn’t come from a scope. So the scope will be reverse-engineered to consume the number. Inspect the assessment line by line →

At the July 30 work session, the City confirmed the genealogy on the record (per the session’s caption record): the winter talks set a “$600 million… target,” the earlier floated ask, that the NBA was “validating,” and “573 was us getting as close to that 600” from the three governments’ combined capacity, while the NBA, councilors confirmed, never requested $573M specifically. And the deputy administrator, in the same session: “we still don’t know what 573 is getting us.” A target validated by the league, assembled from what governments could pay, itemized by no one.

It gets one step worse. The draft said the budget would be “updated… in the Definitive Agreements,” meaning the team writes the baseline after the money is committed, and whatever it writes becomes the baseline. The adopted term sheet keeps that sequence. That matters because the deal’s best protection, cost overruns belong to the team, only bites above the budget. If the counterparty drafts the budget after the commitment, padding isn’t an overrun. It’s the budget. A padded budget is an overrun the public pays in advance.

In August, the bill’s own sponsor confirmed all of this on camera. Asked by KGW’s Tim Gordon about the state’s $365 million, Sen. Kate Lieber said the quiet part in sequence: “we don’t have architectural renderings… it’s a little chicken or egg… when you renovate your house, it depends on the budget”; the amount was “what they wanted from the state… between 500 and 600 million in this capital sort of stack, and that’s what we tried to put together”; and its purpose was a message to the league during the sale: “so that the NBA would… basically say to the new owner… they’re coming in with a really good package here. It’s a market deal… now you need to stay and negotiate a long term lease.” Asked whether the owner should contribute a couple hundred million: “it was not something that was overwhelmingly needed at the time.”

That is the blank-check mechanism described by the person who wrote the largest check: no drawings, an amount set by the recipient’s ask, assembled as a signal to the league, and no private contribution required, because no one thought to ask.

The protections, audited

Both governments have written real protections. The question is what each one actually covers, and when it can still be used.

The shared gap is the fatal one: no independent scope referee. The state law funding this deal (SB 1501 §6(2)(a)) already requires the State to retain an arena-negotiations expert during this negotiation. The State’s PFM comparables review has surfaced; a deal-terms review of rent, relocation and revenue shares has not, and the statute does not expressly require one to be published. The only independent scope document in existence is the City’s 2024 condition assessment, a lifecycle forecast that prices upkeep, not the renovation, sitting on its own shelf.

What sufficient would look like

Five fixes, all still available before the December documents. They are not free of schedule: an independent owner’s-representative reconciliation of an itemized arena budget against the City’s own condition assessment and an independent estimate of the renovation scope is a six-to-ten-week engagement costing a few hundred thousand dollars, and it has to start before the December vote rather than beside it. That is the honest price. Against $573M committed for twenty years it is the cheapest insurance on the table, and construction cannot begin before the definitive agreements in any case, so the work fits inside the calendar the deal already has.

1. A scope gate with a quality bar. No vote on the definitive documents until an itemized budget exists and an independent owner’s representative reconciles it, line by line, to the City’s own condition assessment and an independent estimate of the renovation scope.
2. A frozen baseline. Exhibit A completed and locked before the overrun clause means anything. You can’t have an overrun against a budget nobody wrote.
3. Money that follows scope categories. Genuine repair funded differently than the revenue-generating upgrades the operator keeps. The City’s assessment does not sort the scope that way: it is a lifecycle forecast, and the maintenance claim is preserved, tolled and unvalued pending a legal and engineering matrix. Sorting it is the referee’s first job.
4. Walk-away preserved at every stage. A verification right without a walk-away right is a formality. The City’s signature is the consideration; condition it. The closing standard →
5. The County’s sliding scale, adopted city-side. “Proportionately reduced if terms are not achieved” is the only protection in this entire deal that works automatically, instead of requiring a future council to find the courage to blow up a deal.

A protected closing runs in three steps

1. 01DefineScope, cost and the public limit.
2. 02CommitLegally sufficient funding and private support.
3. 03ReleaseDraw conditions and enough money to finish.

Coordinate statutory prerequisites and construction funding. Do not create a circular closing condition.

A cap must survive the difficult cases

A public maximum is only as good as its behavior when the project goes wrong. Four cases decide whether $573M is a ceiling or a first installment.

Define the deliverable

Require mature scope, independent estimates, schedule, contingencies, eligible uses and acceptance. Separate new investment from existing duties. Tie each draw to work certification, matching contributions and sufficient remaining funds. Allocate every overrun and change category explicitly.

Sources: August 12 City term sheet

The public cap test

Specify maximum exposure by government, account, year and use, including financing, enabling work, utilities and administration. Preserve receipt-conditioned continuing support. A scope change or accounting label must not silently turn a ceiling into a guarantee.

None of this is exotic. It is how every bank, every insurer, and every homeowner in Portland commits money to construction: the bid first, the check second. The City’s own Exhibit A said “to be attached.” Attach it first.