Gov. Ed Rendell this morning formally unveiled a $315 million "insurance plan" to fund a replacement for Mellon Arena if the Pittsburgh Penguins and Isle of Capri fail to win a slots casino license.

In a news conference at the Regional Enterprise Tower, Downtown, Mr. Rendell detailed a plan to issue $293.5 million in bonds to pay for the project. The funding plan also would include an $8.5 million up-front equity contribution from the Penguins, who would be the building's main tenant, as well as $13 million in interest earned during the construction period.

The Penguins are counting on Isle of Capri winning the city's lone slots casino license because it has promised to fully fund construction of a new arena for $290 million. Mr. Rendell, along with Mayor Bob O'Connor and Allegheny County Chief Executive Dan Onorato wanted an alternate plan available in case the license goes to one of the other two groups seeking the license, Forest City Enterprises which is working with Harrah's on a proposal for Station Square and Detroit businessman Don Barden, whose Majestic Star Casino wants to build on the Allegheny River bank west of the Carnegie Science Center.

Mr. Rendell called relying on a slots license to fund an arena "an awful risky proposition because no one knows how the gaming control board will vote."

He called his proposal "an insurance plan" that also allows city and county officials to begin planning a new arena immediately.

Mr. Rendell said he wanted the Penguins reaction to his proposal to be, "If we don't get [the slots license] we will live with this plan."

He said he hoped "that this show of faith will be sufficient for them to say, 'We're not shopping the team any more.' "

Penguins President Ken Sawyer thanked the governor for the plan, but said he needs more details. He characterized it as a less attractive arrangement than the Isle of Capri's proposal to pay for an arena from gambling profits.

"The Isle of Capri plan is clearly the best plan still out there," he said. "The plan proposed by the governor today, as you know, calls for $7 million dollars a year from some development fund. That's $210 million over 30 years. Under the Isle of Capri plan, that money is freed up to go elsewhere, toward additional economic development."

Mellon Arena is the oldest hockey facility in the National Hockey League, and the league and Penguins say they need a new facility to remain competitive. The team's lease expires after the 2007 season and officials can begin seeking offers to relocate beginning this summer.

The governor's proposal would require annual debt payments of $18.56 million for 30 years. That money would include a voluntary $7.5 million annual contribution from whichever group receives the slots license; $7 million a year from the state new Gaming Economic Development and Tourism fund derived from slots revenue; $2.9 million a year from the Penguins'; and $1.1 million a year from naming rights and food and beverage sales at the arena.

Mr. Onorato said he has had private discussions with the other potential casino operators and they verbally agreed to the voluntary contributions of $7.5 million a year.

The construction cost of $290 million would be the same under Mr. Rendell's plan with the addition expenses coming from the establishment of an $18.6 million debt service reserve fund; $4.2 million in bond insurance; and $2.26 million in bond issuance costs.