Penguins Formally Announce Plans For New Arena In Pittsburgh

Penguins Unveil Details For $290M Arena

Penguins co-Owners Mario Lemieux and Ron Burkle have formally signed a deal to build a $290M arena that will “keep the Penguins in Pittsburgh for at least the next 30 years,” according to Mark Belko of the PITTSBURGH POST-GAZETTE. Lemieux and Burkle were joined at the announcement at Heinz Field by Pennsylvania Gov. Ed Rendell, NHL Commissioner Gary Bettman, Pittsburgh Mayor Luke Ravenstahl and Allegheny County CEO Dan Onorato. Rendell indicated that a “big assist goes to the Penguins fans who have sold out” Mellon Arena this season, as the support “gave state and local leaders some leverage in the negotiations.” Rendell: “No one could guarantee the Penguins the strength, the loyalty and support Pittsburgh fans have offered them over the years.” Lemieux said that with the arena deal complete, he and Burkle “have no intention of selling the team” (PITTSBURGH POST-GAZETTE, 3/14).

ARENA DETAILS: The arena will be financed completely through a state bond. The team will supply $4.2M a year for 30 years toward the repayment, “with $400,000 annually generated through a parking surcharge” once the arena opens. Detroit-based exec Don Barden, who won the slots license in Pittsburgh, and a slots-financed state economic development fund will each contribute $7.5M annually. The state will also pay another $10.5M for “delays the team suffered while it was negotiating for a new arena.” The Penguins will control development rights to the arena land, and will receive all parking and arena revenues (PITTSBURGH POST-GAZETTE, 3/14). Also in Pittsburgh, Andrew Conte reports the state and team agreed to split the difference in overruns up to $310M, beyond which the Penguins would be responsible. Rendell said that the agreement “matches the deals offered to the Pirates and Steelers for their new stadiums.” Burkle indicated that K.C. “probably offered a better deal.” But he added, “If you have a good deal and a fair deal, we would rather stay here and be here where the fans are” (Pittsburgh TRIBUNE-REVIEW, 3/14). In a separate piece, Conte notes the Pittsburgh-Allegheny County Sports & Exhibition Authority will own the arena, and the Penguins will lease it (Pittsburgh TRIBUNE-REVIEW, 3/14).

FRIEND OF THE DEVILS: In Pittsburgh, Rich Lord reports the arena package laid out yesterday “most closely resembles” the Devils’ deal for their new arena in Newark. Local tax dollars are not going into the Prudential Center, and the public contribution, which is capped at $275M, is “being covered by the New York-New Jersey Port Authority.” However, the “bad news is that the facility blew through initial cost estimates and is now expected to cost around $375[M].” SportsCorp President Marc Ganis said of the Penguins’ arena, “If there was an over-and-under on the $310[M], I would take the over” (POST-GAZETTE, 3/14).

SLOTS KEY TO DEAL: Sources said that without help from the city’s slots revenues, the team “would be playing in another market by fall.” Univ. of Pittsburgh professor Jerry Shuster said, “There would be no other funding source close to being able to (make up) that kind of shortfall.” In a separate piece, the TRIBUNE-REVIEW’s Conte writes that because the deal “relies on slots money, [Onorato and Ravenstahl] are able to tell taxpayers that no local tax money is being contributed.” Ravenstahl said, “You look at this deal in comparison to Heinz Field and PNC Park, they’re significantly different” (TRIBUNE-REVIEW, 3/14).

OUT OF THE SHADOWS: In a separate piece, the POST-GAZETTE’s Belko reports Burkle “helped to close one last gap in financing for a new arena ... by pushing state and local leaders to take advantage of falling interest rates.” While he has “remained in the background” during his time with the team, he “took a more active role in the talks over a new arena” (PITTSBURGH POST-GAZETTE, 3/14). In Pittsburgh, Bob Smizik writes with Burkle “committed to the group, spending up to the top of the salary cap would not figure to be a problem.” Lemieux said, “Now that we have solidified the new arena, I think we’ll be in a position to be competitive with the rest of the NHL and able to afford to keep our stars and be able to spend up to the cap or near the cap” (PITTSBURGH POST-GAZETTE, 3/14).

EARLY LOOK: The POST-GAZETTE’s Robert Dvorchak reports the Penguins were “working behind the scenes with HOK Sports Inc. for the past six weeks on moving ahead with the design” of a new arena. The team has “not yet officially retained HOK” (PITTSBURGH POST-GAZETTE, 3/14). Mellon Financial Media Relations Manager Ron Gruendl said the company has “the first right of refusal for the naming rights to any new facility.” The bank is scheduled to merge with The Bank of New York, and Gruendl said once the deal is complete, the bank will “consider what we believe to be appropriate marketing opportunities” (TRIBUNE-REVIEW, 3/14).

Lemieux Receives Praise For Penguins Staying In Pittsburgh

WHERE CREDIT IS DUE: In Pittsburgh, Chuck Finder writes the new arena “means more than [Lemieux] securing his legacy with an unprecedented hat trick: He has saved the franchise thrice. Rather, such a building represents a new foundation” (POST-GAZETTE, 3/14). Also in Pittsburgh, Eric Heyl writes “plenty of people deserve credit,” including Lemieux, Rendell, Burkle, Onorato, Ravenstahl, Barden and the Pennsylvania Gaming Control Board. Research In Motion Founder Jim Balsillie, who reached an agreement to buy the team before backing out in December, “momentarily distracted Lemieux and Burkle from shopping the Pens to other cities” (TRIBUNE-REVIEW, 3/14). ESPN.com’s Elizabeth Merrill wrote Lemieux played “hardball when the Penguins issued a letter saying the team planned to pursue relocation actively. Within three days, the negotiations heated up and the deal was done” (ESPN.com, 3/13). The TRIBUNE-REVIEW’s Joe Starkey credits Penguins C Sidney Crosby for making the Penguins “relevant again. Crosby brought the fans back -– to the arena and to their televisions” (TRIBUNE-REVIEW, 3/14). FSN’s Stan Savran: “Every person who spoke at the press conference [yesterday] said that the ultimate determinant was the fan base, the fan’s support and how they’ve packed the building” (FSN Pittsburgh, 3/13).

Rendell (standing) At Announcement With (l-r) Lemieux, Onorato And Bettman

EDITORIALS: A PITTSBURGH POST-GAZETTE editorial states Lemieux, Rendell, Burkle and Bettman deserve credit for knowing that “walking away from this would leave both sides diminished and that all the elements of a deal were present if only cooler heads could work out the details” (POST-GAZETTE, 3/14). But a TRIBUNE-REVIEW editorial states lost in the celebration of the deal is “how relatively little the franchise will contribute” (Pittsburgh TRIBUNE-REVIEW, 3/14). A TRIBUNE-REVIEW editorial cartoon depicts a parade celebrating the arena deal, while a fan wonders where his wallet went (TRIBUNE-REVIEW, 3/14).

WHITHER K.C.? California-based business exec William Del Biaggio III, who has a deal with AEG to operate an NHL team at Sprint Center, said after news of the Penguins deal to stay in Pittsburgh, “I don’t think anything has changed for us. We put a very good step forward. Anyone that is looking at relocating would be interested in Kansas City.” Sprint Center Senior VP/Business Operations Mark Faber said the package offered to another NHL team would not necessarily be the same as the one offered to the Penguins. Bettman said the city is “on our radar screen, but we cannot respond to the interest at this point. We’ll have to see what the future holds” (K.C. STAR, 3/14). But Bettman added of K.C., “I think, ultimately, somebody in some league is going to want to go there” (TRIBUNE-REVIEW, 3/14).

TIME PASSAGES: The POST-GAZETTE offers a timeline of events that led to the arena deal (POST-GAZETTE, 3/14).