 
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
Wednesday, January 16, 2002
No one should be surprised that the Pittsburgh Penguins expect the city and county to meet the June 30 deadline for drafting a financial plan for construction of a new arena. It's there in black and white.
Three years and three months ago, the hockey team filed for Chapter 11 bankruptcy protection -- a first for the National Hockey League. After winning the Stanley Cup in 1991 and 1992, the team had been mishandled financially and run into the ground. Drowning in debt, the franchise owed $32.5 million alone to its chief unsecured creditor, Mario Lemieux, and millions more to others.
Instead of cashing in at Bankruptcy Court, the star player converted the money owed him into an ownership stake, then raised an additional $51 million from other investors. One year and countless rounds of negotiations later, he and his investment group took control of the team.
Eager to see the franchise remain in Pittsburgh, both the city and county governments were directly involved in helping parties in the complicated case reach an agreement. After the Lemieux group successfully secured the team in September 1999, the city and county said they "will endeavor to complete a financing and development plan by June 30, 2002, for construction of a new multipurpose arena."
It's there in black and white. It is also 2002.
The way we read it, the assurance doesn't mean that the money will begin to flow then or that construction will start then. It means that the city and county (and, one hopes, even the state) will have agreed on a framework for replacing 41-year-old Mellon Arena, the oldest hockey venue in the league, with a new, probably $225 million, facility.
The Penguins, of course, are only following the lead of the Pirates, the Steelers and NHL teams that see a new venue as a necessity for strengthening the franchise financially, improving its competitiveness and keeping it where it is. Rarely are such facilities built exclusively with private dollars, and that, of course, is where the controversy begins.
Unfortunately, Pittsburgh, Allegheny County and Pennsylvania are coping with the effects of an economic downturn. Collections from the county's 1 percent sales tax (which chips in a key component of the PNC Park-Heinz Field financing) are expected to slip this year, and the state (which had earmarked $60 million from the capital budget) is projecting a deficit of a half-billion dollars by July 1.
This does not mean, though, that the principal players should resist forming a plan. Last year Mario Lemieux bought the vacant St. Francis Central Hospital, near the arena, anticipating that the $8 million tract would become part of the development site.
If that were to reach fruition and a new arena were to be located closer to Fifth Avenue, it would create a greater economic opportunity for the acreage occupied by and surrounding Mellon Arena. The city, for instance, could extend its successful Crawford Square neighborhood farther down the hill and add community business establishments.
Within that package, Pittsburgh would get more than a new multipurpose arena, but a sizable redevelopment project. Though it would come with a higher price, it should be able to leverage other investment dollars.
It's encouraging that Steve Leeper -- who as head of the city-county Sports & Exhibition Authority directed the construction of the two stadiums and the still-rising convention center -- is willing to discuss financial options for a new arena in late March.
Let's hope the mayor, the county chief executive and the governor are willing to plan for the future, too.