Gov. Ed Rendell pitched his "insurance plan" for a new arena yesterday, but neither the Penguins nor competing gambling interests agreed to pay the premiums.

Steve Mellon, Post-Gazette Gov. Ed Rendell, right, with Mayor Bob O'Connor, listens to a reporter's question yesterday after unveiling his $315 million backup plan to build a new arena for the Penguins.

Mr. Rendell's $315 million concept would be backed by slots players and a team contribution. It would kick in if the Penguins' partners don't get to own the city's lone slots casino.

"This plan works," the governor said. "It's fair. It's reasonable. It's designed in accordance with the Penguins' previous discussion of what they could afford to pay, what they are willing to pay."

The Penguins said they'd ask for more details but added the plan would have them pay more than they pledged in 2003. They touted their partnership with would-be slots parlor owner Isle of Capri Casinos Inc., which has said it would pay for an arena with gambling profits.

"The Isle of Capri plan is clearly the best plan still out there," Penguins CEO Ken Sawyer said. "The plan proposed by the governor today, as you know, calls for $7 million a year from some development fund ... Under the Isle of Capri plan, that money is freed up to go elsewhere, toward additional economic development."

Mr. Rendell's plan involves $293.5 million in borrowing, $13 million in interest earned while those funds sit in the bank, and $8.5 million up front from the team.

The borrowing would be paid off over 30 years with annual contributions of $7.5 million from whoever gets Pittsburgh's casino, $7 million from a slots-backed state development fund, $2.9 million in rent from the Penguins and $1.2 million from the sale of arena naming rights.

Mayor Bob O'Connor and county Chief Executive Dan Onorato flanked the governor during his announcement and endorsed the plan.

"It is my hope that this show of faith, by the county, the city, by the state," the governor said, "is sufficient for [the Penguins] to stand up and say, 'We're not shopping the team anymore.' "

"We're interested in keeping the team here under the right circumstances for as long as we can, and that's all I'm going to say," Mr. Sawyer said.

Mr. Rendell said that under his proposal, arena planning could start now, rather than waiting until the state Gaming Control Board decides who gets the casino, which could come late this year or early next. He said he was willing to front state capital money to get arena planning under way.

Nobody promised yesterday to write a check toward the governor's plan.

The Penguins wouldn't sign on to the proposed team contribution. They offered in 2003 to pay $8.5 million up front and $2.9 million a year, but Mr. Sawyer characterized the $1.2 million in naming rights payments that would go toward the arena as a new team contribution.

"Three years has transpired, and the team has incurred significant losses," said Mr. Sawyer.

Neither of Isle of Capri's competitors for the city's casino agreed to a $7.5 million annual arena payment.

"When [the Penguins] make a commitment to fund the arena with this plan, we will sit down with the public officials and determine how we can participate," said Abe Naparstek, development director for Forest City Enterprises, which is teaming with Harrah's Entertainment on a casino proposal. "It's too early to speculate on a number" they would contribute, he said.

Bill Wade, Post-Gazette Penguins CEO Ken Sawyer talks with reporters yesterday about his impressions of Gov. Ed Rendell's alternative plan for funding a new arena for the hockey team. "The Isle of Capri plan is clearly the best plan still out there," he said. Click photo for larger image.

Detroit businessman Don Barden, who wants to build a casino on the North Shore, said he's waiting for the Gaming Control Board to tell him whether an arena pledge would be legal.

He hailed Mr. Rendell's plan, saying it would "take the blinders from the arena distortion off" and allow officials to let the best overall casino proposal win.

Mr. Rendell said the development fund he would tap will eventually receive at least $150 million a year in slots revenue. The same fund is supposed to cover debt on the David L. Lawrence Convention Center, subsidize a new hotel near the center, reduce Pittsburgh International Airport debt and pay off Urban Redevelopment Authority obligations.

Mr. Rendell and Mr. Onorato said arena funding wouldn't cut into those projects or others around the state. "We're not taking it from anywhere else at all," the governor said.

The plan wouldn't tap the $90 million earmarked for a new arena in the state's capital budget, freeing up that money for local projects, too, he said.

National Hockey League Commissioner Gary Bettman released a statement thanking Mr. Rendell but calling the Isle of Capri plan "the only one that assures the future of the Penguins in Pittsburgh."

Politicians' reactions ranged from cautious approval to condemnation.

Lynn Swann, the presumed Republican nominee in the race against Rendell, called the plan "a lose, lose, lose'' for Pittsburgh and the Penguins.

Mr. Swann, who endorsed the Isle of Capri proposal Wednesday, criticized the fact that Mr. Rendell's plan would rely on slots revenue -- which he called "taxpayer dollars" -- that could be available to other purposes.

The plan "means taxpayers will continue paying for a new arena until the year 2037 -- despite the private sector's willingness to make the same investment at no cost to taxpayers," Mr. Swann said in a statement.

Democratic state Rep. Jake Wheatley, who represents the arena neighborhood, called the new plan a step in the right direction. He said, however, that none of the arena proposals has offered enough specifics on how the project would create development in the surrounding neighborhoods.

Two key Republican state senators, both of whom have endorsed the Isle of Capri plan, voiced criticism.

"Unfortunately, it appears that politicians in Harrisburg would rather jeopardize [the Isle of Capri] plan and place the commonwealth's taxpayers at risk for a new arena," said state Sen. Jane Orie, R-McCandless. "Again, the governor is proposing to place the commonwealth further in debt.''

"I've been supportive of the Capri plan because that was the proposal that's come out that would pay for the entire project and, when push comes to shove, it's still the best one for the public,'' said Sen. John Pippy, R-Moon.

Auditor General Jack Wagner, an early advocate of slots funding for an arena, wanted to see more details, said his spokesman, Steve Halvonik. "We continue to believe that whoever gets the slots license for Pittsburgh ... should be made to make a substantial investment in a new arena," he said.

Mr. Rendell said it is "a bad idea for elected officials to be endorsing any application for a gaming license."

"It's the obligation of the leaders of this community to take a stand and say what they believe is the best plan," said Mr. Sawyer, who claimed the backing of 29 elected officials.

Mr. Rendell brushed off speculation that contributions by Forest City executives to his campaign would influence the competition to own the city's casino. He said it's likely that members of all 32 would-be casino owning groups have contributed to him over 30 years in politics.

He said he won't tell his three appointees to the seven-member Gaming Control Board how to vote.

Mr. O'Connor said he met with the Penguins Wednesday to discuss the site for a new arena. The team has said it wants to build along Fifth Avenue, but the mayor said publicly owned parking lots on either side of the arena are also options.

At this point, the Penguins' and the governor's proposals will proceed along separate tracks. The Penguins said they expect to respond to the new proposal within three weeks, and if they endorse it, the two groups could begin working together on such issues as the exact location and design of the arena.

The arena would be owned by the city-county Sports & Exhibition Authority, but the team would get the revenue. Concession revenue would be used for routine maintenance of the facility.