Allen buying back Rose Garden
EmptyPORTLAND, Ore. -- Portland Trail Blazers owner Paul Allen plans to repurchase the Rose Garden Arena, three years after he gave it up in bankruptcy proceedings.
Allen said Friday that his holding company, Vulcan Inc., has signed a letter of intent with Portland Arena Management LLC to acquire the Rose Garden through an affiliate of Vulcan. The sale price was not disclosed.
The announcement appeared to end speculation that the Blazers and the arena would be sold as a package, as Vulcan officials had said was possible last year. They had estimated last February the team could lose more than $100 million over three years -- calling the split ownership of the arena and the team a "broken financial model."
Allen said the team was suffering serious financial problems last year as the Blazers were wrapping up one of the worst seasons in franchise history, finishing an NBA-worst 21-61.
The talk of a sale had gone so far last year that former Trail Blazers player Terry Porter and Mark Wattles, who founded the Hollywood Video chain in Oregon, had expressed interest in buying the team.
Allen, the billionaire co-founder of Microsoft Corp., built the Rose Garden without public money. But when the team's sister company, Oregon Arena Corp., declared bankruptcy in 2004, Allen chose to give up ownership rather than continue to pay interest on construction debt.
The loss of the arena cost the Trail Blazers revenue from luxury suites and other arena sources, made worse by declining ticket sales.
"With this letter of intent, we've taken a positive step forward. Assuming this deal gets finalized, it will be a major milestone which will strengthen the long-term financial health of the Trail Blazers," Allen said in the statement.
A spokeswoman for Allen said no further public comment was planned by those involved in the deal until a final agreement was reached. There was no estimate on how long it would take.
The announcement was welcomed by Thomas Luther, chairman of Portland Arena Management, who said in the release that the deal will "ensure that the Trail Blazers will remain in Portland."
"The team has long been an integral part of the community, and we believe this resolution benefits all interested parties," Luther said.
Mayor Tom Potter also said the agreement was a strong signal "the Blazers will remain an important part of Portland in the future."
NBA commissioner David Stern thanked the Blazers and the arena company for their efforts, saying "the ultimate winners here are the fans of the Portland Trail Blazers and the City of Portland."
Vulcan officials said the final price tag for the Rose Garden and related structures was about $262 million after an initial construction loan of about $155 million. It opened in the fall of 1995.