The leaders of Allegheny County and the City of Pittsburgh today pledged to continue their efforts to build a new arena after the state gaming board rejected a proposal by the casino bidder favored by the Penguins.

The state board chose a proposal by PITG Gaming for a North Side parlor over a bid by Isle of Capri for a Hill District site. Isle of Capri had pledged $290 million toward arena construction and had an agreement with the Penguins.

PITG's Don Barden has agreed to provide $7.5 million a year for 30 years for an arena, part of Gov. Ed Rendell's "Plan B" in case Isle of Capri lost out, and he has also pledged to help redevelop the Lower Hill District.

The Penguins issued a statement today congratulating Mr. Barden but saying, "obviously, we are very disappointed that the Isle of Capri was not awarded the slots license."

"Had Isle of Capri been selected, it would have ensured the long-term future of the Penguins in Pittsburgh and would have delivered a $1 billion development opportunity to the Lower Hill and Uptown," the statement continued.

"At this point, our franchise enters a period of uncertainty, with our lease at Mellon Arena set to expire this summer. We will re-evaluate all of our options before deciding on a course of action and making further comment."

Gary Bettman, commissioner of the National Hockey League, said in a release that "the decision . . . was terrible news for the Penguins, their fans and the NHL.

"The future of this franchise in Pittsburgh is uncertain and the Penguins now will have to explore all other options, including possible relocation. The NHL will support the Penguins in their endeavors."

Pittsburgh Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato said at a press conference today that they have already spoken to Mr. Barden and hope to arrange a meeting about his plans as soon as tomorrow.

Both said they understood he has reiterated his commitment to helping fund an arena and redevelop the Hill.

They also said they are still backing a new arena.

"Let me reach out to Mario here," said Mr. Onorato, referring to Mario Lemieux of the Penguins. "What the two of us are committing today is that we're going to be here under this plan and get (an arena) done."

"There's absolutely no doubt in my mind that we can get this deal done," Mr. Ravenstahl said, "provided that the team is willing to negotiate."

Mr. Rendell today said he would be reaching out to the Penguins soon to finalize his plan for getting an arena built in Pittsburgh.

He noted that the Penguins had not been willing to negotiate with the state while the Isle of Capri's bid was pending. "That's been a real handicap," he said. "I'm going to sit down and talk to them, and hear them out. . . . If they can demonstrate to me where the plan falls short, then I'd consider where we could help."

Pittsburgh Councilman William Peduto, a likely challenger to the mayor, called the decision "unbelievable" because it in effect turned down a free arena.

He said he is very concerned about the Penguins' future. "If Plan B were valid, [Penguins bidder Jim] Balsillie would not have walked away from the Penguins," he said. "The Penguins do not even have an owner yet, and [the board's decision is] going to make it that much more difficult to find a new owner."

He blamed city and county officials for, he said, not supporting the Isle of Capri vigorously enough. Mr. Ravenstahl endorsed the company's bid repeatedly, but Mr. Peduto said officials "didn't do anything to support" the company.

Mr. Onorato said the choice of a North Side location shows the need for the Port Authority's North Shore Connector. Under the plan, which has drawn some criticism, the light rail line would be extended under the Allegheny River to the North Side.

The two officials pledged to put together a task force to study community impact and neighborhood issues that the casino might generate. They said it would include both neighborhood residents and professionals like traffic engineers.

It will probably eliminate further need for the city gaming task force created by former Mayor Tom Murphy. That group had said Isle of Capri was the best plan.

Mr. Ravenstahl had also backed Isle of Capri but Mr. Onorato never stated a preference.

More details in tomorrow's Pittsburgh Post-Gazette.