With the possible sale of the Penguins moving forward, the city-county Sports & Exhibition Authority is working to secure property in the Uptown area for a new arena.

The agency has begun negotiations with owners of about 10 properties near Fifth Avenue and Washington Place, and hopes to reach sales agreements with all before the end of the summer, authority Executive Director Mary Conturo said last night.

Ms. Conturo would not rule out the use of eminent domain to acquire the properties if agreements aren't reached, but said the authority is hopeful it will not come to that. She said eminent domain would be used only as a "last resort."

"We don't expect to use eminent domain," she said. "We're hopeful that we can negotiate fair agreements."

She said the authority was able to secure the land it needed for the North Shore stadiums without taking properties and wants to do the same for land needed for an arena.

"On the North Shore, we were able to acquire everything by negotiation. We fully expect to negotiate everything here. That's our goal," she said.

The authority has hired two local real estate brokers, Apex Realty and Langholz Wilson Ellis, to assist in the negotiations. Ms. Conturo said talks with the property owners began within the last two weeks. To date, they have not produced any sales agreements.

The properties in question are near the former St. Francis Central Hospital on Centre Avenue, currently owned by the Penguins. The team has long considered that area the best site for a new arena.

That also is the site where an arena would be built if Isle of Capri wins the license for Pittsburgh's slot machine casino. Isle of Capri, in partnership with the Penguins, is pledging $290 million toward an arena as part of its formal bid.

That site also is preferred by the sports authority. It is moving forward with acquisition as part of Gov. Ed Rendell's alternative funding plan for an arena in the event Isle of Capri doesn't get the slots license.

Mr. Rendell has asked the two other casino bidders -- PITG Gaming LLC and Forest City Enterprises -- to contribute $7.5 million a year for 30 years toward the facility.

He also has pledged to advance the funding needed by the city of Pittsburgh and Allegheny County to begin site acquisition and other preliminary work for an arena. The money eventually would be paid back through slots revenues.

The authority's efforts come as Allen & Co., a New York firm brokering the sale of the Penguins, expects to pare the number of bidders for the team to three or fewer in a week or so. There are believed to be at least four and possibly five bidders for the team.

Mr. Rendell's Plan B would require the team, regardless of the owner, to pay about $4 million a year toward the arena.

At least two of the bidders for the team -- one group led by New York businessman Andrew Murstein and one by Ohio businessman Jim Renacci -- have vowed to keep the Penguins in Pittsburgh. It's not as certain with the others, although a third bidder, Sam Fingold, has said recently he believes he might be able to work with Plan B. It previously was thought he would move the team.

If Isle of Capri wins the license, the team is required to stay in Pittsburgh.

Ms. Conturo said that while the St. Francis site is the preferred location for a new arena, the authority has other options if it can't get the property it needs.

One option is building on the site where Mellon Arena is located or in the parking lot above it. Ms. Conturo said, however, the authority prefers to use that land for redevelopment that would reconnect the Hill District with Downtown.