Background
Ground broke on the Rose Garden in 1993, and the building opened two years later in 1995. The Rose Garden cost $262 million to build, $155 million of which was financed through a loan from a consortium of lenders led by pension fund TIAA-CREF. As Allen was unwilling to personally guarantee the loan, the lenders demanded an interest rate of 8.99%, with no opportunity for prepayment. Other major creditors included Prudential Insurance, and Farmers Insurance. A shell corporation, the Oregon Arena Corporation (OAC), was chartered to oversee the construction and operation of the Rose Garden, as well as operation of the Rose Quarter as a whole. The sole shareholder in OAC was Allen.
During the 1990s and the early 2000s (decade), the team was successful both on the court and in the box office—twice making it to the Western Conference finals—but a series of questionable and expensive player acquisitions caused many fans to sour on the team, by then derisively called the "Jail Blazers." In addition, the team payroll skyrocketed to over $100 million.
In 2002, a collective bargaining agreement between the NBA and the players' union imposed a luxury tax on excessive payrolls; this tax impacted the team's finances greatly. In the summer of 2003, Bob Whitsitt resigned and was replaced as team president by Steve Patterson; Patterson was chartered with restoring the team's image and bringing costs under control.
Read more about this topic: Rose Garden Arena Bankruptcy
Famous quotes containing the word background:
“Silence is the universal refuge, the sequel to all dull discourses and all foolish acts, a balm to our every chagrin, as welcome after satiety as after disappointment; that background which the painter may not daub, be he master or bungler, and which, however awkward a figure we may have made in the foreground, remains ever our inviolable asylum, where no indignity can assail, no personality can disturb us.”
—Henry David Thoreau (1817–1862)
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