The Pirates got PNC Park. The Steelers got Heinz Field. Now the Penguins want a new arena, too -- and the team says it has a contractual agreement that the city and county will have a financial plan in place by summer.
"June 30 is the deadline when the financing plan has to be ready," said team consultant John Brabender. "That date is in the contract."
The date is in the contract, but whether it's a deadline depends on how one reads it.
The document, written in September 1999, says the city and county "will endeavor to complete a financing and development plan by June 30, 2002, for construction of a new multipurpose arena."
That's a deadline, say the Penguins.
Most of the government officials involved would like to acknowledge such a deadline, but the problem is: The cupboard is bare.
Allegheny County Chief Executive Jim Roddey, for example, said last week that the county didn't have any money for an arena and suggested the Penguins look to the state and to their own resources.
Steve Aaron, a spokesman for Gov. Mark Schweiker, said the state was willing to listen to a request, but he doubted whether Pennsylvania could provide as much as $60 million -- the amount currently in the wish-list capital budget for the project. The state provided $75 million for PNC Park and another $75 million for Heinz Field.
Stephen Leeper, executive director of the city-county Sports & Exhibition Authority, which floated $173 million in bonds for the two stadiums, said he was too busy building the new David L. Lawrence Convention Center now to worry about a hockey arena.
He's getting the convention center ready for its first event, the annual recreational vehicle show, set to open Feb. 23.
"We will begin to discuss options on financing for an arena in late March," Leeper said. "We realize there are issues associated with the age and condition of Mellon Arena, and we need to determine what is the best way to address those issues."
The Penguins are eager to begin discussing such issues. Mellon Arena opened in 1961 and, as the team is fond of pointing out, it is the oldest facility in the National Hockey League.
The Penguins say they're competing against many other teams that play in new arenas that produce more revenue than Mellon Arena, which has fewer luxury suites and club seats than newer facilities have.
The Penguins want to have a financing plan in place by June 30 so actual fund-raising can begin and the new arena can be under construction by the fall of next year. They'd like to begin playing there in the 2005-06 season.
"It's important to stay on that time line," Brabender said.
The arena is expected to cost $200 million to $225 million. The site hasn't been specified, but it likely would be located somewhere on the 30 acres that surround the Mellon Arena and the empty St. Francis Central Hospital, which team owner Mario Lemieux bought last year for $8 million.
The September 1999 agreement was written at the time Lemieux and his group of investors bought the team out of federal bankruptcy court.
The promise of a new arena was a key in Lemieux's decision to buy the team, Brabender said.
But Leeper noted a section of the agreement that says a deal for a new arena "must include significant private participation by the Lemieux Group."
Also, the money must be in a "form and amounts" that are acceptable to the SEA, the city, the county and the state, the contract states.
Based on a study done last year, the Penguins say that bringing Mellon Arena up to modern NHL standards would cost nearly as much as the minimum of $200 million needed to build a new one, so a rehab doesn't make sense.
The Penguins want the new arena to have about 18,000 seats, or 1,000 more than Mellon Arena. They also say the corporate luxury boxes at the current arena are too far from the ice and are much inferior in quality to the suites at PNC Park and Heinz Field.
The team also says the current arena has antiquated mechanical equipment, doesn't comply with the Americans with Disabilities Act, has concourses that are too narrow and doesn't have enough revenue-generating club seating.
If the Penguins' rink doesn't generate as much revenue as other teams' newer rinks, they won't be able to compete for higher-salaried players, said team spokesman Tom McMillan.
The current management under Lemieux has stopped the red ink that flowed under previous owner Roger Marino, but in the long term the team needs money from a new arena, agreed Lemieux Group President Kenneth Sawyer.
In 1998-99, just before Lemieux took over, the team lost $18 million; in 1999-2000, Lemieux's first year as owner, the team broke even; and in 2000-2001 the team actually made a $3 million profit.
But Sawyer pointed out that the team reached the third round of the playoffs last season, something it can't count on every year.
This season, the team hopes to break even, but that depends on playing at least one round in the playoffs, Sawyer said. Making the playoffs this year looks difficult right now, with the team at the bottom of its division.
Roddey said he didn't see how the county, which has its own financial problems, could help finance an arena.
"There's no question a new arena would be nice, and I think Mario is a great guy. But all that being said, the county isn't in a position to provide any funding," he said. "I think it has to be done by state and private investment."
Roddey also doubted that the Allegheny Regional Asset District, another city-county agency, could help. The RAD already is paying $13.4 million a year in debt service on the $173 million in bonds for the two new stadiums. Roddey appoints four of the seven RAD board members.
The county's 1 percent sales tax is the source of RAD funds, and it's been flat in the current recession.
State Sen. Jack Wagner, D-Beechview, two years ago inserted a $60 million line item in the state capital budget to pay for repair of Mellon Arena or construction of a new facility.
Despite what the Penguins say, Wagner isn't convinced that Mellon Arena couldn't be fixed up.
"There needs to be an open public discussion on the cost for revamping the current arena or building a new one," he said.
No state money will be forthcoming for an arena without the approval of Schweiker, and no decision has been made about how much will be provided, said spokesman Aaron.
The state's $75 million for each of Pittsburgh's new stadiums represented about a third of the cost of each facility. But Aaron said the state's share of a new arena should be less than a third.
That's because arenas can host many more year-round events, thus generating more revenue than stadiums can, Aaron said. Indoor arenas can hold concerts, ice skating, soccer, wrestling, college basketball, religious gatherings and other events besides hockey, while outdoor stadiums are largely limited just to football or baseball.
Government officials want the team owners to provide a lot of the money for a new arena.
Lemieux's group hasn't said how much it would contribute, but Sawyer noted the team had already spent about $11 million toward a new facility. Most of that was the $8 million that Lemieux paid for the old St. Francis hospital, just across Centre Avenue from Mellon Arena.
"We had to make a quick decision to protect that property," which was close to being sold to another buyer, said team spokesman McMillan.
The team also has spent about $3 million in interest costs on the money borrowed to make that purchase and the cost of hiring consultants who looked at renovating Mellon Arena.
That study was done by HOK Architects of Kansas City and Turner Construction Inc. of Pittsburgh. Released in June, it concluded that a new arena was the Penguins' best option.
Penguins push new arena financing 
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