Fresh off a season in which his team turned a $2 million profit, Penguins owner Mario Lemieux says he still needs a new arena to stay financially competitive.
Without a new arena, Lemieux said, it "will be very difficult to keep the team here ... I'm not going to move the team out of the city. I might be forced to sell it."
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Owner Mario Lemieux listens to planners explain the options for renovating Mellon Arena or building a new home for his Pittsburgh Penguins. (Annie O'Neill, Post-Gazette) |
In a news conference yesterday at 40-year-old Mellon Arena, Lemieux and his chief operating officer, Tom Rooney, said their financial success resulted mainly from the team's reaching the third round of the National Hockey League playoffs -- something they can't count on every year.
Other unusual factors were increased attendance after Lemieux rejoined the team in December and the success of the minor-league Scranton/Wilkes-Barre Penguins, who made the finals of their playoffs.
Lemieux acknowledged the arena funding issue was "going to be very difficult" and "a tough situation for everybody."
He said he was pleased with the team's performance on and off the ice this season.
"Off the ice I think we made tremendous progress. We are able to turn a small profit only two years after coming out of bankruptcy," he said.
Two consulting firms hired by the Penguins, HOK Architects and Turner Construction Co., estimated the cost of a new arena at $204.5 million to $225.6 million -- about the same amount they said it would cost to renovate Mellon Arena's luxury suites, lighting, sound, concession stands, handicapped accessibility and other items.
Lemieux said that, within six to eight months, he hopes to resolve where a new arena would be located.
While sites on the North Shore, in the Strip District and McKeesport will be considered, the apparent front-runner is property Lemieux bought for $8 million Tuesday, the former St. Francis Central Hospital on Centre Avenue, across the street from Mellon Arena.
Lemieux said he hoped a financing package for a new arena could be ready by next June.
Rooney said he was aware that local and state politicians want more private funding committed to a new arena than was committed to the new baseball and football stadiums.
They reason that an arena can be far more profitable because it can be used year-round for events other than hockey -- basketball, concerts, circuses, skating, wrestling and religious meetings, among other things.
The Pirates provided about 18 percent of the $260 million cost of PNC Park, and the Steelers provided about 44 percent of the $281 million cost of the football stadium.
Rooney said he's still trying to determine how much private money would be available. It might be possible to renegotiate the naming-rights deal with Mellon Financial Corp. if a new arena is built. Mellon is paying $18 million over 10 years to the Penguins for the right to put its name on the current arena.
The state Legislature has earmarked $60 million in the current capital budget to help pay for a new arena in Pittsburgh. Gov. Tom Ridge still has to agree, however, to release the money, and he could release less than the full $60 million.
Ridge spokesman Steve Aaron said yesterday the governor "is interested in talking with the Penguins" about funding for a new arena but hasn't committed to a specific amount.
"He did make it clear that whatever financial role the state does play in a new arena, it would be significantly less than the role we played in financing the stadiums," Aaron said.
The state provided $75 million for each stadium.
The state recently contributed $25 million toward a $90 million rink being built for the minor-league Hershey Bears, Aaron said. It will be called Giant Center, with Giant supermarkets buying naming rights.
It's difficult to compare the Penguins' $2 million profit with that of other NHL teams because most of them, as private companies, don't release such numbers. An NHL vice president, Bill Daly, said during the Penguins bankruptcy case two years ago that about three-fourths of the teams lose money.
Mayor Tom Murphy issued a written statement yesterday, saying he hadn't yet seen the Penguins' study on the costs of renovating Mellon Arena vs. a new facility and hasn't talked with the team about it.
"However, I can tell you there is no city money available for the development of a new arena, and I firmly believe that it is going to take a lot of private money to make any new arena development possible," Murphy said.
Murphy has mentioned the possibility of using Allegheny Regional Asset District funds to help build a new arena. That money comes from the county's 1 percent sales tax.
In recent years, the asset district has provided $3.2 million annually to pay debt from capital improvements made at Mellon Arena during the 1990s. The district also is providing $13.4 million a year for the next 30 years to finance a $173 million bond issue that helped to pay for the new stadiums.
Allegheny County Chief Executive Jim Roddey, who will be a key player in arena financing discussions, said he wanted to review the Penguins' study before commenting.
He has previously said he would support public funding only for infrastructure improvements -- items like road improvements and sewer lines -- related to a new arena.
Sports columnist Ron Cook contributed to this report.
Mario says new ice arena a must 
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