Onorato's arena goal: Deal finished by Feb.

Pens called No. 1 priority

Share with others:


Print Email Read Later

Allegheny County Chief Executive Dan Onorato vowed yesterday to make keeping the Penguins in Pittsburgh his "number one priority" heading into the new year and would like to have an arena deal completed under Plan B in two months or less.

A day after Penguins owner Mario Lemieux said he would begin talking to other cities about moving the team, Mr. Onorato continued to express confidence that he, Mayor Luke Ravenstahl and Gov. Ed Rendell would be able to get an agreement to keep the franchise in town.

"We're ready to go. We're ready to negotiate. We're ready to put our offer on the table," he said.

But he acknowledged that time is of the essence, given that the Penguins' lease at Mellon Arena expires at the end of June. At that point, the team could relocate, with Kansas City, where a new arena is waiting, heading the list.

With that in mind, Mr. Onorato said he would devote the next six to eight weeks to getting a deal that would keep the Penguins here under a new long-term lease. He said he had called the team Wednesday to try to set up negotiations but has yet to hear back.

"It is the number one priority because of the timing of this lease canceling in '07," he said.

Mr. Lemieux said in a statement Thursday that he is willing to sit down with local officials to discuss a new arena deal, but first the Penguins must be released from their obligation to Isle of Capri, which should happen in a few weeks. Isle of Capri had pledged $290 million toward a new arena in its unsuccessful bid to get the casino license.

Mr. Onorato said the city and county have a good starting point for negotiations, with $230 million on the table to commit toward a new arena.

Mr. Onorato arrived at that figure by computing the present value that has been pledged under Plan B. Pittsburgh casino winner Don Barden has committed $7.5 million a year for 30 years, and another $7 million a year for 30 years is to come from a slots-financed state economic development fund.

Those figures add up to $435 million, far more than the $230 million quoted by Mr. Onorato. That's because of financing costs, in the same way that a $100,000 home can be purchased for that much in cash, but if financed with a mortgage, would cost much more over time.

The Penguins' equivalent share, then, would be $60 million, or the present-day value of the amount Plan B calls for the team to put up, which is $4 million a year for 30 years. However, Mr. Onorato stressed that the team's share is negotiable, and could be lower.

If Mr. Onorato's numbers are correct, the Penguins' share under Plan B would be far less than the Steelers paid toward Heinz Field and slightly more than what the Pirates put up toward PNC Park.

The Steelers paid $123 million toward the $281 million stadium cost, or about 44 percent. The Pirates provided $47.7 million of the $260 million ballpark cost, or about 18 percent. Of that, $30 million came from naming rights. The Penguins' share, including naming rights, toward a $290 million construction would equal 20.7 percent.

Mr. Onorato said local officials would have to find another $15 million to $20 million to get the Penguins the same deal the Pirates got, which he described as "very, very competitive."

It's unclear where that money would come from. However, Mr. Onorato ruled out use of any local tax dollars, including Allegheny Regional Asset District revenues, to sweeten the pot. Previous improvements to Mellon Arena had been funded through RAD.

"There will be no local tax dollars in this deal because we don't have it," he said.

He added that none of the funding under Plan B takes into account revenues generated by hockey and other events at the arena, virtually all of which would be available to the Penguins. He sees that as a key reason Pittsburgh can be very competitive with other cities in bidding for the team.

The Penguins declined comment yesterday.

Mr. Onorato's comments came after he and Mr. Ravenstahl talked by phone to Mr. Barden. During the call, Mr. Barden reaffirmed his pledge to provide $7.5 million a year for 30 years toward an arena under Plan B.

The mayor described the call as "very preliminary. We anxiously await dealing with him and making this casino and development as tasteful as possible," he said.

He and Mr. Onorato likely will meet face to face with Mr. Barden after the first of the year. Mr. Onorato said he expected Mr. Barden to be in Pittsburgh at least once a week to work on his new casino and a $350 million Hill District redevelopment.

Mr. Ravenstahl said the 15-minute call included no discussion of concerns by North Shore interests about the effects a casino might have on the attraction-heavy district.

One interest, Continental Real Estate Chairman Frank Kass, said he, the Pirates and the Steelers will meet early in 2007 to talk about how the casino will affect plans for new development between the stadiums.

There are concerns, he said, about traffic and parking, but he also said the casino does not alter the idea of a new amphitheater next to Heinz Field in 2007, nor will it affect the mix of offices, hotels and restaurants between the stadiums.

If anything, he said, an amphitheater "is not terrible to have in the vicinity of a casino."

But if the Majestic Star Casino creates more of a parking crunch on the North Side, "that could be a problem," he said. Mr. Barden has pledged to build a 4,100-space parking garage to accommodate not only casino patrons, but to help with Steelers and Pirates traffic.

Meanwhile, county Prothonotary Michael Lamb, a possible mayoral candidate, urged local leaders to consider building a new arena on the North Shore next to the casino.


Staff writers Dan Fitzpatrick and Rich Lord contributed. Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.


Advertisement
Advertisement
Advertisement

You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here