After more than three years of stalled negotiations, bankruptcy proceedings and an on-again, off-again sale, the Rose Garden is back where it started — in the hands of billionaire Paul Allen.

Allen’s Vulcan Inc. investment firm said Monday it has completed its acquisition of Portland Arena Management, the entity that owns the 12-year-old arena. The purchase price wasn’t disclosed for a deal tentatively announced in early February.

The deal reunites the Rose Garden, which Allen forfeited two years ago to his lenders, with his Portland Trail Blazers NBA team. By reacquiring the arena, Allen’s Vulcan Sports & Entertainment division also gains control of valuable sources of revenue that Vulcan says can help fix the “broken economic model” that keeps the Blazers tens of millions of dollars in the red each year.

The acquisition also closes the book on one of the most tumultuous periods for Portland’s only major-league sports franchise, as mounting financial losses, a dwindling fan base and, seemingly, a disaffected owner all brought the team to the brink of being sold.

But Allen appeared to take a renewed interest in his team in recent months, particularly after last year’s draft in which a string of trades and picks landed several popular rookies and helped reignite fan enthusiasm. Allen and the group of lenders who owned the Rose Garden signed a letter of intent earlier this year for Allen to buy PAM and its assets, and released the news to the public on Feb. 2.

“It’s a great day for all Blazers fans because this was a really important step for ensuring this franchise was going to be a Portland-based and viable franchise for years to come,” said Tod Leiweke, president of Vulcan Sports & Entertainment, which will run the arena and the Blazers.

“There’s still a lot of work to do to get the franchise back on solid financial footing,” he said, adding that the team needs “to fill the building up and sell a lot of season tickets.”

He said the company is in “preliminary talks” over a long-term contract with Global Spectrum, which has managed the Rose Garden for the past two years, as the arena management company.

“Overall the feeling is they’ve done a pretty good job,” Leiweke said. “I think that they’re inclined and I would think we’re inclined” to continue working together.

Global Spectrum brought about 300 events to the Rose Quarter last year, said general manager Mike Scanlon. The company, based in Philadelphia, is a division of Comcast-Spectacor.

In Portland, Global Spectrum employs about 95 people full time and an additional 400 part time, he said.

Without knowing the purchase price, it’s difficult to assess whether the past three years have been a fruitless — and costly — game of chicken between Allen and his lenders. While a bankruptcy filing for a company owned by a multibillionaire may appear unseemly, businesses sometimes file for bankruptcy protection as a way of renegotiating what they consider to be bad deals. Allen owed his lenders $192 million at the time of the bankruptcy filing and sought to settle the debt for about $89 million.

But the lenders, including Prudential, TIAA-CREF and other insurers, rejected the offer, opting instead to try their hand at owning the Rose Garden. The move put financial services firms in the unfamiliar territory of running an arena, put Allen and his Trail Blazers in deeper financial instability and pitted the two entities against each other for fans’ dollars.

Now, the arena is back in Allen’s hands. And the lenders “are very satisfied with the transaction,” said Rich Josephson, a board member for PAM before Allen’s purchase.

Helen Jung: 503-294-7621; helenjung@news.oregonian.com; blog.oregonlive.com/playbooksandprofits

source : www.oregonlive.com By HELEN JUNG