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Arena 'Plan C' offers Penguins profits
Peduto proposal would allow team to share in Mellon Arena site, Lower Hill development
Tuesday, January 09, 2007

State and local politicians should go beyond Plan B to offer the Penguins something other cities can't -- a share of the profits in the redevelopment of the Mellon Arena site, city Councilman Bill Peduto says.

The land would be available for development if a new arena is built across the street, as proposed by the city and county. Detroit businessman Don Barden already has promised a $350 million redevelopment of the lower Hill District, including the Mellon Arena property, as part of his winning casino bid.

But Mr. Peduto, a likely mayoral candidate, said local and state officials, in conjunction with Mr. Barden, should offer the Penguins a chance to partner in the redevelopment and share in the profits as part of the negotiations to keep the team from moving elsewhere.

"This is the perfect opportunity for Barden, the Penguins, the city, the county and the state to partner together," he said. "It's a great way to keep the team in Pittsburgh, redevelop the Hill, get Barden more involved in the community, and lessen the impact on taxpayers."

As part of negotiations to build a new arena for the team, Gov. Ed Rendell, Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato are offering to give the Penguins most, if not all, of the revenues generated by the facility.

Adding potential redevelopment profits to the mix could be a difference maker that cities like Kansas City, which is making a strong bid for the team, would be unable to match, Mr. Peduto said.

"I'm saying scrap Plan B and create Plan C," he said.

He said the arrangement would be similar to that negotiated with the Pirates and the Steelers to redevelop land between PNC Park and Heinz Field. Both teams get a piece of revenues from the redevelopment, which is being led by Continental Real Estate Cos.

Mr. Peduto said he has offered his assistance to the Penguins but has not spoken to either Mr. Ravenstahl or Mr. Onorato.

The Plan B formula for funding a new arena calls for a contribution of $7.5 million a year for 30 years from Mr. Barden, who is building his casino on the North Shore; $7 million a year for 30 years from a slots-financed state economic development fund; and about $4 million a year from the Penguins, including $1.16 million annually in naming rights, plus an upfront payment of $8.5 million.

State and local officials presented a somewhat sweetened version during a meeting with team owners Mario Lemieux and Ron Burkle last week in an effort to prevent a move to Kansas City, where officials have offered a rent-free arena that is scheduled to open in October.

The Penguins have set a 30-day deadline for deciding whether to stay in Pittsburgh or to relocate.

First published on January 9, 2007 at 12:00 am
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.