The Portland City Council approved $120 million in funding on Wednesday to renovate the Moda Center, a key step in efforts to keep the Portland Trail Blazers in the city long-term.

The council passed a non-binding term sheet by an 8-4 vote. An amendment attached to the measure would require the Blazers to pay approximately $3.1 million in annual rent.

The vote represents the final piece of a monthslong process to secure arena financing, though it does not guarantee the team remains in Portland. It instead triggers a 4 1/2-month negotiation period between the city and franchise over a new lease agreement.

Government entities at the state, county and local levels have now approved more than $573 million toward renovating the arena. A term sheet must be finalized by December 31 for the team to access $365 million appropriated by the Oregon state legislature, with the city council expected to vote on a final lease December 17.

The Blazers' current Moda Center lease runs through October 11, 2030, and both sides are negotiating a new 20-year agreement. Team owner Tom Dundon has maintained the Blazers should not have to contribute financially to the renovation, while team president Dewayne Hankins recently characterized Portland as an unfavorable business environment for the franchise.

The team has also pushed to remove a lease clause requiring the Blazers to maintain the Moda Center in a first-class manner, arguing it exposes the franchise to potential lawsuits. City officials have disputed that interpretation and declined to strike the clause.

Deputy city administrator Donnie Oliveira addressed the dispute in a July 28 email to Hankins, citing lease language stating the city agrees not to enforce the first-class obligations against the team.

The Moda Center remains the only NBA arena that has not undergone renovation since its construction. The city acquired the facility for $1 from the Paul Allen estate in 2024, after which the team and city began splitting annual maintenance costs of $8 million to $10 million.

The Multnomah County Board of Commissioners approved up to $101.6 million toward the arena upgrade last week, setting up Wednesday's city council vote to finalize Portland's financial contribution. Formal lease negotiations between the two sides now begin.