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Tipped Off
04-13-2007, 10:48 AM
Hawks' home ice uncertain
The future site of the hockey team's games -- the Coliseum, the Rose Garden or elsewhere -- looms as a sticking point
Friday, April 13, 2007

The Portland Winter Hawks want to call Memorial Coliseum home.

The problem is that the Western Hockey League considers the arena substandard and plans to complete a detailed report describing its deficiencies this month.

The City of Portland's response: Funds for major fixes are limited, so try playing more games next door at the Rose Garden.

That brings up another sticking point: The Hawks are in the 13th year of a 20-year lease at the Rose Quarter that team owners consider a "broken economic model."

Trail Blazers owner Paul Allen often threw out words to that effect to describe his predicament in recent years, before his Vulcan Inc. investment firm regained ownership of the Rose Garden when it reclaimed the arena from bankruptcy this month. Vulcan's Sports & Entertainment division now controls the Winter Hawks' lease with the Rose Quarter.

Concerns by Hawks owners foreshadow what could be a looming battle to decide where the junior hockey team skates the majority of its games -- in Portland or elsewhere. Jack Donovan, the club's president and co-owner, said he plans to meet Friday with J.E. Isaac, the Trail Blazers' senior vice president for business affairs, to "try to figure out where everything stands."

"We're looking forward to seeing if we can't resolve these issues," Isaac said. "We think they are resolvable, and we can continue to have the Hawks here as a major tenant."

Under new ownership last season, the Hawks played all but six of their 36 home games at the Coliseum, which was built in 1960. Areas needing improvement in the building, according to the WHL and Hawks owners, include women's restrooms that are too small and lack baby-changing stations, locker rooms with holes in the ceiling, glass boards that need to be replaced or cleaned, and a playing surface of inconsistent quality.

The newer, larger Rose Garden, where the Hawks played the remainder of their home games last season, would be a better venue for the team, said Dave Logsdon, Portland's spectator facilities manager. The city can reasonably afford $500,000 a year for Coliseum maintenance and repair, Logsdon said, but it probably would cost a "very significant amount of money" to bring the building to WHL standards.

"The Rose Garden is perfectly suited for hockey," Logsdon said. "So in our mind, part of the solution is to make better use of that facility."

Before last season, the Hawks often played a majority of their home games at the Rose Garden, which opened in 1995.

Logsdon's suggestion that the Hawks revert to playing more often at the Rose Garden angered Jack Donovan, the team's president and a minority owner.

It costs the team thousands of dollars more each game to play at the Rose Garden for various rental charges, and the Hawks gain no revenue from the arena's luxury suites, Donovan said. The Hawks also control more advertising revenue at the Coliseum, he said.

"The economics over there can never work for us, because that's the home of the Blazers," Donovan said. "I've never understood the city's attitude in telling us to go play someplace else. That attitude may have us playing someplace else. And not here (in Portland)."

Winter Hawks owners have logged several queries asking if they are interested in selling or moving the team, Donovan said.

"They know our backs are against the wall," he said. "We have to explore all options we have, and it's clear under the present scenario it doesn't work."

Donovan and his two investment partners -- majority owner Jim Goldsmith, a New York businessman, and John Bryant, a Dallas lawyer -- hoped to make the Hawks profitable within three years when they took ownership of the club in March 2006. Donovan described the Hawks' prior year financial losses as "substantial."

He likened the Winter Hawks' situation to one Allen faced before his investment firm announced April 2 it had regained ownership of the Rose Garden.

"They've been bloodied by a tough lease. They've felt the pain," Donovan said. "We're in the same boat. There's nothing different."

Allen forfeited the Rose Garden to lenders two years ago after putting Oregon Arena Corp., the entity he created to run the arena, into bankruptcy more than three years ago. He briefly sought public assistance last spring to stanch projected red ink. Allen later put the Trail Blazers and the Rose Garden up for sale before announcing his bid Feb. 2 to buy back the Rose Garden.

Continued.......

Tipped Off
04-13-2007, 12:54 PM
Donovan and his partners agreed to buy the Winter Hawks in late 2005, near the end of Oregon Arena Corp.'s bankruptcy. They figured, Donovan said, that when the bankruptcy ended, the Hawks' lease would "go down," giving them an opportunity to work out a new one they considered fair.

That didn't happen.

In the past two weeks, Winter Hawks owners negotiated to waive a requirement of the Rose Quarter lease that the team play a minimum number of games at the Rose Garden. The team also secured certain dates it wanted to play games at Memorial Coliseum.

The adjustments "should help us in putting together a powerful schedule," Donovan said.

But Hawks owners want to change other lease provisions, allowing them to better tap into revenue streams from advertising and concessions sales.

"This lease is too long," Donovan said. "Every area of business has changed in the 15 years this lease has been around."

Isaac declined to comment on the lease terms but said, "We understand the financial situation they're in."

He added that Global Spectrum -- the Philadelphia-based company that has managed the Rose Garden and the Coliseum the past two years -- has made numerous improvements to the Coliseum. They include recarpeted locker rooms, repairs to the veteran's memorial and updated concessions equipment and options, Isaac said.

Isaac hinted, however, that plans for a convention center hotel and a Portland streetcar extension to the area point toward future development around the Rose Quarter that, though years away, might lead to the Coliseum's demise.

"The property the Memorial Coliseum sits on may be a key to that," Isaac said.


And a key that possibly opens up a more profitable venture.

The Coliseum has averaged a couple of hundred thousand dollars a year in operating losses the past decade, Logsdon said. Vulcan is responsible for absorbing those losses, he said.

The city began losing money on the Coliseum last year when it boosted annual capital improvement spending to $500,000, an amount that Logsdon said is penciled into the building's five-year financial plan.

Despite the losses, he said, the city plans to continue operating the Coliseum as a secondary arena, at least for the next few years. Long term, Logsdon said, Rose Quarter development might influence what happens to the arena.

"It has been and will continue to be challenging to have the Coliseum be profitable, especially when you consider the capital expense that's going to be required to keep it operating," Isaac said. "You can make improvements, but it becomes more and more expensive just to keep what you have operating when your building systems are 40-plus years old."

But in the meantime, Isaac said, the Winter Hawks remain an important equation to a successful Rose Quarter.

"The bottom line is that the Winter Hawks are a very valuable tenant here at the Rose Quarter, regardless of which building they play in," he said. "When they do well, we do well, so whenever there's a chance to assist them, we're certainly going to do that."

Donovan remains hopeful.

"This is where we want to be," he said. "We bought this team to be in Portland."

Boaz Herzog: 503-412-7072; boherzog@news.oregonian.com

Spokane Sin Bin
04-18-2007, 05:29 PM
I hope Portland managment can figure this situation out. I'd hate to see the Winterhawks move. That would hurt other teams in U.S. divison.