Lease Deal Keeps Penguins In Pittsburgh Through 2040

Penguins Ink 30-Year Lease For New Arena

The Penguins and the Allegheny County Sports & Exhibition Authority (ACSEA) signed a lease on the team’s new $290M arena Tuesday, “formalizing the agreement reached in March,” according to Mark Belko of the PITTSBURGH POST-GAZETTE. The lease, effective when the arena opens in 2010, will keep the team in Pittsburgh for 30 hockey seasons, through 2040.  The ACSEA “expects to close on about $313[M] in financing for the arena the first week of October.” Under terms of the lease, the Penguins, who will be responsible for construction, will “keep all the revenue generated by the new arena. It also is responsible for the management, operation and maintenance” of the facility. ACSEA will receive free use of one luxury suite at the new arena and will get “no fewer than 10 seats in the stands that are no more than 12 rows from the ice.” If arena costs exceed $290M and go up to $310M, the state of Pennsylvania and the Penguins will “split the excess 50-50.” If the price exceeds $310M, the state and team will “work to reduce costs. If they are unable to do so, the team has the right to drop its participation in the project.” SportsCorp President Marc Ganis said the deal is a “reasonable market rate lease” and is “consistent with other recent single anchor tenant” NHL buildings. He noted that arena revenues could run “anywhere from [$15-40M] a year.” For the Penguins, he added that “that’s more likely at the low to middle end,” and said the operating costs could cost the team “well over $10M” a year (PITTSBURGH POST-GAZETTE, 9/21).

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