Penguins, state hold late-night talks on new arena

Updated: January 19, 2007, 7:41 AM ET
Associated Press

PITTSBURGH -- The Pittsburgh Penguins couldn't strike a deal for a new arena during a late-night negotiating session Thursday with Gov. Ed Rendell and local leaders, but a gubernatorial aide said an agreement could be reached soon.

The Penguins' Mellon Arena lease expires at the end of the season, and the team has all but threatened to move to Kansas City, Mo., unless an agreement to build a new arena can be reached within the next few weeks.

Meeting for the second time in three weeks, the two sides didn't begin talking until Rendell arrived from Philadelphia at 9:15 p.m. EST, and the Penguins' representatives -- owner Mario Lemieux wasn't among them -- left less than two hours later.

Rendell, Allegheny County chief executive Dan Onorato and Pittsburgh Mayor Luke Ravenstahl met for another hour, but Rendell aide Chuck Ardo said the Penguins' early exit wasn't a sign the talks didn't go well.

"None of the principals is going to have any comment tonight,'' Ardo said. "All I can say is negotiations are going to continue, and we hope to be able to work out a deal at some point in the near future.''

Asked why neither side was talking -- unlike the previous meeting, when Lemieux and Rendell both appeared optimistic during interviews -- Ardo said, "We don't intend to negotiate through the media.''

Ardo said no face-to-face meetings are currently scheduled, but, he said, "Negotiations are continuing'' with an agreement hoped for "as soon as possible.''

A surprise guest at the talks was Don Barden, the Detroit gambling casino owner who was picked by a state panel last month to build a new slots machine parlor in Pittsburgh. Barden has agreed to contribute $7.5 million a year toward the arena costs.

"I want to do everything I can to see that the Penguins stay in Pittsburgh,'' Barden said.

Before the meeting, Onorato told reporters, "We're coming down to try to finalize the deal'' -- the most optimistic comment any of the principals have made to date. But Onorato also cautioned it would take time to work out details such as the Penguins' lease and financing.

The arena meeting was the first since Jan. 4. Then, Lemieux -- only hours removed from touring Kansas City's new arena -- expressed optimism that the arena would be built and the team he played for and later bought would stay in Pittsburgh.

But while Kansas City gives the Penguins some leverage in the talks, Lemieux is not expected to move the team from the city where he became one of hockey's greatest players unless he has no other options.

The Penguins play in the league's oldest building in 45-year-old Mellon Arena, yet they are filling an average of 94 percent of all seats for every game and will sell out most of their 41 home games. With young stars such as Sidney Crosby, they have emerged as one of the league's big drawing cards again following four consecutive last-place seasons.

However, Lemieux became angered as lawmakers spent six years repeatedly brushing off his pleas for a new building and, again last month, when the state gaming board rejected a casino company's offer to build the arena for free in exchange for the slots machine license. Barden was chosen instead.

Still, that rejection may have increased the Penguins' leverage in negotiating the so-called Plan B arena package and likely will result in a better deal than they could have gotten at any other time since Lemieux's group bought the team in 1999.

Rendell's initial Plan B offer, in March, called for the Penguins to pay $8.5 million upfront for a new arena, plus $4 million a year and an additional $1 million or so as their share of the naming rights revenue.

However, the state has sweetened that deal in the current negotiations, with the $8.5 million likely to be paid by the local Sports and Exhibition Authority in exchange for land owned by the Penguins that is needed for the arena.

Kansas City offered its new Sprint Center rent-free, but that city lost an NHL team previously because of the lack of fan support. Also, the league considers Pittsburgh a much more attractive market because of its Eastern location, larger TV audience, lack of NBA competition and longtime rivalries with teams in New York and Philadelphia.

The Penguins can't play in a new Pittsburgh arena until 2009 at the earliest, but a proposed Mellon Arena lease extension calls for no rent and the team to earn most of the non-hockey revenue. Mellon Arena was used for approximately 85 non-hockey revenue events last year.


Copyright 2007 by The Associated Press

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