Technically, Vulcan acquired Portland Arena Management, which in turn owns the 20,000-seat Rose Garden arena, the adjacent 12,000- seat Memorial Coliseum, the 6,500-seat Theater of the Clouds, the 40,000-sf Rose Quarter Exhibit Hall and the Rose Quarter Commons.
Allen, co-founder of Microsoft Corp., built the Rose Garden in the mid-1990s without public money at a cost of $262 million and owned it through Oregon Arena Corp. Oregon Arena Corp. declared bankruptcy in 2004. Allen chose to give ownership of the arena back to its lenders rather than continue to pay above-market interest on the construction debt, which originally amounted to $150 million.
As a result, Allen lost revenue from courtside seats and other sources. Last year at this time, Vulcan estimated that the basketball team could lose $100 million over three years because of the "broken financial model." Vulcan signed a letter of intent to reacquire the Rose Garden from the lenders in early February .
"This puts us on stronger financial footing and helps us address some of the financial issues the franchise faces," says Tod Leiweke, CEO of Vulcan Sports & Entertainment. "We have begun to execute our transition and improvement plan so we can again assume our rightful position as one of the premier franchises in the NBA."
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