Lemieux agrees to meet with Rendell

Lemieux agrees to meeting with Rendell on financing to keep team in Pittsburgh

Arena talks next week

Friday, December 29, 2006
By Tom Barnes, Post-Gazette Harrisburg Bureau

HARRISBURG -- Gov. Ed Rendell is coming to Pittsburgh next week to talk to Penguins' owner Mario Lemieux about financing for a new arena to anchor the team in Pittsburgh.

Mr. Rendell announced a goal of March 31 for completing a deal to finance a new $290 million arena with tax-exempt bonds. That target date is about a month later than the February deadline mentioned last week by Allegheny County Chief Executive Dan Onorato.

Mr. Rendell, joined by Mr. Onorato and Pittsburgh Mayor Luke Ravenstahl, sent a letter Wednesday to Mr. Lemieux, saying they are "solidly committed to keeping the Penguins at home in Pittsburgh." The Pittsburgh Post-Gazette obtained a copy of the letter yesterday.

"We believe the time has come for those [arena financing] discussions to begin and to proceed in an expeditious manner, as we would like to complete negotiations on a financial plan by no later than March 31, 2007," the three officials said.

Mr. Rendell proposed starting the arena talks in Pittsburgh on Thursday and, in a letter to the governor last night, Mr. Lemieux agreed. Also at the meeting will be team officials Ronald Burkle, Ken Sawyer, David Morehouse and Chuck Greenberg.

Mr. Lemieux said he wants to have a financing plan ready "well in advance" of March 31.

Mr. Lemieux, in his letter, said that when he and his partners bought the team seven years ago, "We made it clear that we needed a new arena to become economically viable and competitive in Pittsburgh."

State and local officials became nervous after Mr. Lemieux said last week he would begin talking to other cities about moving the team.

Kansas City, Mo., has a new but empty arena and would like to land a hockey team.

The Penguins' lease at Mellon Arena expires in June. The arena, which opened in 1961, is the oldest in the National Hockey League.

Mr. Onorato has called reaching a deal to build a new arena for the Penguins his No. 1 priority.
In his letter to Mr. Lemieux, Mr. Rendell said he'll be in Pittsburgh Thursday and would like to arrange "a mutually agreeable time" to begin talks on financing for a new arena. Mr. Lemieux said Thursday afternoon works for him.

The governor said he recognizes that Mr. Lemieux has had a contractual obligation with Isle of Capri casinos, a St. Louis-based gaming company that had offered to build a new $290 million arena for the Penguins if it received a state slots license.

But Isle of Capri didn't get the license. Instead, the state Gaming Control Board, on Dec. 20, awarded the sole slots license for Pittsburgh to Detroit casino entrepreneur Don Barden. He plans to build a Majestic Star casino in the Chateau neighborhood near the Carnegie Science Center.

Mr. Lemieux said that now that Isle of Capri's offer to build the arena "has been turned down" by the state, "We are in the process of exploring all of our options" for building an arena.

In the letter, the governor again outlined the details of his so-called Plan B, the backup plan for funding a new arena, under which a $290 million bond would be floated and paid off over 30 years with money from four sources.

Under the Rendell plan, the team would provide $8.5 million upfront and $2.9 million per year to pay off the bonds; Mr. Barden has agreed to provide $7.5 million a year; a new state economic development fund, fueled by casino revenue, would provide $7 million a year; and another $1.1 million annual contribution would come from selling the naming and advertising rights at the new multipurpose arena, whose major tenant would be the Penguins.

Mr. Lemieux told the governor he appreciated "the positive tone of your recent public comments." But he said he's hoping that a financing plan could be developed that "is significantly better than the original Plan B."

The governor, county executive and the mayor reminded Mr. Lemieux how they have "moved forward with planning for the new arena."

They said they have "acquired the necessary land within the footprint designated by the Penguins and have continued to work on the design and financing plans."

(Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254. )