The Penguins remain focused on potential slots revenue as their best bet to secure financing for a new arena, and they are dismissing a recent proposal to build it mostly with private money.

Team president Ken Sawyer said last night at Mellon Arena that the proposal by Los Angeles-based Sports Finance & Management Group, leaked last week, is not acceptable for two reasons.

One is that SFMG has suggested that the building will cost $150 million to $160 million, not including extras such as site preparation, roads and infrastructure. A study commissioned in 2002 by the city and county's Sports & Exhibition Authority determined that the building would cost $209 million. A study for which the Penguins paid the same year put that cost at $215 million.

Estimates for the total cost of the project by the Penguins and SEA, including the extras, ranged from $270 million to $278 million.

"We brought in experts to analyze every aspect of this for months, and the SEA did exactly the same thing," Sawyer said. "We came up with almost the exact same number. A figure such as $160 million is just not possible, not for what is needed for a modern arena. It just is not realistic."

The other reason the Penguins are spurning the SFMG plan is that they want to be in control of the new arena the way the Pirates and Steelers are in their recently built venues. PNC Park and Heinz Field are owned by the SEA but operated by the teams. They perform scheduling of all events and control all revenue streams.

SFMG did not specify in its proposal who would operate the arena.

The Penguins have an arrangement with SMG, which currently operates Mellon Arena, to use SMG as their arena manager until 2012, as per terms of the team's bankruptcy in 1999. The Penguins will take over operations of Mellon Arena this summer, with SMG becoming answerable to them.

Sawyer added that the estimated annual debt service of $20 million or more for the full cost of the arena project would be highly unattractive to the team's investors unless there is a long-term guarantee of controlling revenue streams.

SFMG, which has former lieutenant governor Mark Singel as a spokesman, has met with state and local legislators and asked for a study of the new arena's possible expenses and revenues because some revenues would be needed to pay off construction bonds. No one from the company had contacted the Penguins as of early last night.

Sawyer did not rule out meeting with SFMG or discussing the plan, but he added that the Penguins continue to concentrate their energy on slots, which have yet to be approved in Harrisburg.

Although Penguins owner Mario Lemieux flew on his own to meet Wednesday with Gov. Ed Rendell to discuss the arena, team officials mostly are in a wait-and-see mode to see how they might benefit from gambling revenues. They say they are open to any ideas that legislators have regarding specific plans.

Still, it is believed that the team has been especially receptive of late to a concept in which arena bonds would be paid off by an annual take of $20 million or more from the free-standing slots parlor expected to be awarded to a licensee in or near Pittsburgh. That, team officials say, would eliminate the politically and popularly unattractive option of using tax money.

Because of the palpable reluctance to use tax money and the sagging economy, team officials privately are expressing a view that slots perhaps offer the last, realistic chance to have arena financing in place in time to have it built by 2007. That is the year the Penguins' lease expires at Mellon Arena and they are free to relocate to another city.

Recent NHL arenas have built in as little time as 18 months, but completing financing arrangements, architectural drawings and site preparation also take time. At the moment, there is no firm plan for where the arena will be, although most expectations are that it will remain near the current one Uptown.