The city's Urban Redevelopment Authority board approved an agreement yesterday that gives the Penguins development rights to land above Mellon Arena over the objections of a group of Hill District residents concerned about its impact on a proposed community agreement.

Led by state Rep. Jake Wheatley, the group wanted the board to delay approval until the team committed to a community benefits agreement as part of its lease for a new arena.

Despite the protests, board members opted to press ahead with the 10-year option agreement on the 9.5-acre Melody Tent site, saying it was an important element of the deal to build a new arena and keep the Penguins in Pittsburgh.

Don Kortlandt, the URA's general counsel, said the team would not sign the arena lease with the city-Allegheny County Sports & Exhibition Authority until agreements were in place regarding development rights.

The Penguins won the right to develop 28 acres of land adjacent to the Hill District and the new arena, and agreed to remain in Pittsburgh, in the deal reached in March with state and local leaders. The 28 acres include the Mellon Arena property and the Melody Tent site.

Mr. Kortlandt said the Penguins consider the development rights to be "an important part of the economics of their deal" and wanted agreements in place before the lease signing.

"That was part of the quid pro quo for them staying in Pittsburgh," he said.

A delay could affect the timing of a $325 million bond issue, possibly increase interest rates and potentially create a funding shortfall that could jeopardize the project, he said.

"I think the situation could spin out of control," he said.

URA board members also said there would be plenty of opportunities to hold the Penguins to a community benefits agreement through city master plan and project development approvals and future URA reviews.

"There are so many steps involved I don't see the need to delay," board Chairman Yarone Zober said.

The URA also released text of a letter signed by Mayor Luke Ravenstahl, county Chief Executive Dan Onorato and Penguins President David Morehouse committing the politicians and the sports authority to working in "good faith toward a community benefits agreement" involving the new arena and the 28-acre redevelopment.

The Penguins, the letter says, "welcome the opportunity to actively participate in this process and enter into a community benefits agreement that would require the Penguins to be a party."

The benefits agreement may cover employment, minority contracts, business support and other issues that affect the community.

"At the end of the day, there will be a [community benefits agreement]," said URA board member Tonya Payne, a city councilwoman who represents the Hill.

Mr. Wheatley described the URA approval as a "slap in the face," saying he did not believe a delay would affect interest rates enough to cause a problem with the arena financing.

"For me, I think that's just a cover for them trying to move this process without really having to make the Penguins make a true commitment in writing," he said.

The letter is "not good enough," he said, arguing that a community benefits commitment must be part of the lease. Mr. Wheatley said he would seek to block any state funding for the arena until there is such a promise.

Suggestions that a delay could hamper or kill the arena deal are "totally bogus," he insisted.

"I think the Penguins have always used the fact that [they] will leave as [the] hammer to get everything they want," he said.

Carl Redwood, a spokesman for the One Hill CBA Coalition, also was skeptical of URA claims that the Penguins wanted to see the option agreement in place before they signed the lease.

"The Penguins have been twisting the arm of the city and the county and the state ... to get a good deal for themselves. We need to make sure there's a good deal for the community," he said.

Also yesterday, the URA board agreed to be a conduit for $30 million in state funding awarded as part of the financing for the construction of a $200 million cancer and biomedical research facility in the former Ford Assembly Plant on Baum Boulevard in Shadyside. The UPMC project, which is expected to take several years to complete, will create as many as 452 new jobs.