Penguins want more public money for new arena
PITTSBURGH (AP) – The Pittsburgh Penguins say $160 million in taxpayer money isn’t enough for a new hockey arena and they’re preparing to ask for more. The team said it can no longer afford the $108 million it committed to the project to replace Mellon Arena – the oldest and second smallest arena in the NHL – even though none of the money was put up front.
The Penguins no longer want to divert a portion of their future revenues to a new arena, said Ken Sawyer, president of team owners the Lemieux Group. “It doesn’t solve our problems,” Sawyer told the Pittsburgh Tribune-Review for Saturday’s edition.
The team said it hasn’t determined how much it will be able to afford, but wants any shortfall to be covered by the city, county and state.
The city-county Sports & Exhibition Authority last year developed a financing plan that called for roughly $160 million in local and state money and $108 million from the Penguins to build a new arena. The authority agreed to a new arena after Penguins star Mario Lemieux bought the franchise out of bankruptcy in 1999 to prevent a move.
The team’s share would come from revenues generated by the new building, including ticket sales, parking revenue, luxury suites and naming rights.
But the team has been financially struggling. Even though the Penguins shed big-salary players like Alexei Kovalev, they expect to end the year with a loss.
The Penguins say a new arena is needed to keep them competitive with other clubs that derive millions in luxury box and other revenues generated by new arenas.
Allegheny County Executive Jim Roddey and Pittsburgh Mayor Tom Murphy both said they support a new arena, but have no money for the project. The state, which has allotted $90 million for a new arena, might be the team’s best bet, Roddey said.
Gov. Ed Rendell plans to review projects across the state in light of a projected $2 billion state deficit, said the governor’s spokeswoman, Kate Phillips.
Sawyer said the Penguins are not as concerned about Rendell as they are about Roddey and Murphy. He said it’s up to the city or county to recommend that the governor release the money.
If the team approaches state officials, the first question they will ask is, “Do your local leaders want this to happen?” Sawyer said.
While Roddey and Murphy see the Penguins as a regional asset, they question a new arena’s impact on the local economy.
“It’s important to remember … that the mayor has made it clear that there are no city funds available for the financing of a new arena,” said Murphy spokesman Craig Kwiecinski.