Allegheny County Chief Executive Dan Onorato vowed yesterday to find a way to build a new arena for the Penguins even if it means tapping $90 million in state capital funds at the expense of other projects.

		Previous coverage Pa., local officials ponder new arena for Penguins (12/14/05) Onorato: Penguins can still be saved (12/13/05) 'Slim chance' Penguins will stay in Pittsburgh, Lemieux says (12/11/05)

Saying the city and county are reaching "crisis time as it relates to the Penguins," Mr. Onorato said he's willing to use all $90 million to help finance an arena, but added that does not necessarily mean that other projects under consideration by the city or county will be delayed.

He said there are other pots of state money available for economic development initiatives and that the state slots law earmarks funding for several local projects, including debt relief at Pittsburgh International Airport and a hotel at the David L. Lawrence Convention Center.

There also could be money available from the Pittsburgh slots casino for community projects if it is not used to help fund an arena, he said.

"It might not be one or the other," he said. "It might be rethinking how we're spending this money, what goes where."

Pittsburgh Mayor-elect Bob O'Connor, who takes office in January, said he's willing to look at using "part of [the $90 million], if not all" toward a replacement of the aging Mellon Arena. But he added it's too early to make a formal commitment.

"I think it's a balance of everything but it's good to know it's in the mix," he said.

Their comments came in response to statements Tuesday by Gov. Ed Rendell, who said he would consider a request from local officials for $90 million in state capital funds to help build an arena, which could cost $300 million. But at the same time, he warned that taking such a huge chunk for one project could leave little available for others.

While Mr. Onorato conceded that using the $90 million could delay other unspecified projects, he added he doesn't see that as an absolute, given the other money available. He said the governor already has provided more than $200 million over the last few years for other regional projects, including brownfield development and the airport.

"So this is just the next round. It isn't as though we haven't tapped the state already. This is a continuation of the development of the region," he said.

Whatever the city and county decide, it will not affect the $30 million Mr. Rendell has pledged toward the revitalization of the Fifth and Forbes corridor Downtown. Plans now include a $170 million office, retail and residential complex proposed by PNC Financial Services Group, a spokesman for the governor said.

However, county Council President Rich Fitzgerald said he's unsure whether he would support the use of $90 million in capital money for an arena. He said he first wants to sit down with economic development officials and others to determine what projects could be affected by such a decision.

"We need to prioritize those types of things. Just to say give it all for a new arena, the Penguins, or any project, we may be forgoing other things," he said.

Mr. Onorato said he and Mr. O'Connor intend to put together funding options for a new arena by early next year and present them to the Penguins. He said some of the options would include slots revenues.

In addition to state capital money and slots revenue, other possible sources of funding could include private investment and naming rights. Also, $2.2 million in county regional asset district money could be available in 2007 as Mellon Arena debt is paid down, but Mr. Onorato said it was a "gray area" as to whether that would be tapped.

Nonetheless, he said he and Mr. O'Connor plan to be "very aggressive" in their bid to finance a new arena and keep the Penguins in Pittsburgh. A number of other cities may pursue the team, including Kansas City, where a new arena is being built.

The Penguins' lease expires in 2007, and owner Mario Lemieux has the right to begin shopping the team this coming summer. He said last weekend there was only a "slim chance" the Penguins would remain in Pittsburgh because of the lack of progress toward a new arena, triggering the flurry of action by public officials.

"I want to make it clear that we want to keep the Penguins here," Mr. Onorato said.

"Now is the time to get serious about this and put [together] a legitimate serious offer of how to build a multipurpose arena and show that we want to keep the Penguins here. That's my goal and I believe there are several ways to do that."

Both he and Mr. O'Connor said they are also willing to ask the state Gaming Control Board to require the winner of the state license for the city's slots casino to dedicate a portion of the revenue toward an arena. So far, the Pittsburgh Gaming Task Force appointed by outgoing Mayor Tom Murphy has declined to tie slots revenues to the financing of such a facility.

The Penguins plan to pursue the license themselves as a means of privately financing the construction of an arena. However, Mr. Onorato said the city and county won't endorse any applicant, just the idea of using part of the revenue for financing an arena.

David Morehouse, a consultant for the Penguins, said the team was "encouraged" that Mr. Onorato and Mr. O'Connor are trying to figure out ways to fund the facility.

But, he added, "the plan we have on the table calls for private funding for the entire construction of the arena and wouldn't need a penny of state money."

Mr. Onorato, Mr. O'Connor and the team also have reached agreement on a "term sheet" that would cover issues like length of lease and development rights at the arena site if the Penguins were to get $300 million to build an arena. The city-county Sports & Exhibition Authority board is expected to vote on the agreement within the next week or so.