Penguins owners taking a look at Las Vegas today
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The Penguins will travel to Las Vegas today to explore a possible move, as state and local leaders try to arrange a meeting with the team to get talks here back on track.
Surprised by the letter
Mayor can't solve this by himself
"No appetite for using local tax dollars"
"A cooperative spirit" is needed
Las Vegas is one of three cities interested in talking to the team after Penguins co-owners Mario Lemieux and Ron Burkle sent a letter to Gov. Ed Rendell, Allegheny County Chief Executive Dan Onorato and Mayor Luke Ravenstahl on Monday declaring an impasse in negotiations and saying they would "aggressively" consider relocation.
Team officials also are hoping to set up a meeting this week, possibly in Los Angeles, with representatives of Anschutz Entertainment Group, manager of the $276 million Sprint Center being built in Kansas City. They also are trying to set up a meeting in Houston, another city trying to attract a National Hockey League team.
At the same time, Mr. Rendell, Mr. Onorato and Mr. Ravenstahl are hoping to meet with all principals, including Mr. Lemieux and Mr. Burkle, possibly tomorrow in Philadelphia, to try to salvage a deal they have described as close to being done.
"This is a priority for us. There's a lot of flexibility in our calendars. We're going to try to get this done," Mr. Onorato said. "Let's get back in a room, find out what triggered the letter. Let's get that resolved and let's close the deal."
Despite the letter declaring an impasse, Mr. Ravenstahl insisted yesterday that the two sides were close to an agreement on funding a new arena. He said the parties need to "sit down, talk about the specifics, find out where we're not in agreement, and go from there."
He said he expected National Hockey League Commissioner Gary Bettman, who has served as a go-between the last two weeks, to be part of any new round of talks.
In Las Vegas, the Penguins are expected to talk with Mayor Oscar Goodman, who first met with National Hockey League officials several years ago in a bid to land a franchise.
The team's arena situation in Las Vegas may not be much better than it is in Pittsburgh. At least initially, the team most likely would play in the 23-year-old Thomas & Mack Center, site of the recent National Basketball Association All-Star Game.
In remarks before the game, NBA Commissioner David Stern said the league would not return to the arena. He said it was "not suitable for future All-Star events" and "not equipped to hold major league events." NBA officials also had complaints about power and lighting capacity.
Mr. Goodman claims to have five groups interested in investing in an arena, but there is no firm timetable for construction or even a deal to get one built. There's also been a continuing concern about locating a professional sports franchise in a city that allows betting on pro sports.
A spokeswoman for Mr. Goodman would not confirm today's meeting with representatives from the Penguins.
In Houston, no meeting has been set up so far. But Patrick Trahan, a spokesman for Mayor Bill White, said the mayor's office has extended an invitation to talk to the team about a possible move "when the time was right."
Officials in Houston have been trying to attract an NHL team to play in the Toyota Center, an arena that opened in 2003 and is home to the NBA Houston Rockets and the Houston Aeros of the American Hockey League.
The frontrunner in a potential relocation is Kansas City, where the $276 million Sprint Center is nearing completion and will be available next season. The Penguins are being offered a deal that includes no rent, no construction costs and a split of building revenues with AEG.
AEG spokesman Michael Roth had no comment on the situation with the Penguins yesterday.
In declaring an impasse Monday, Mr. Lemieux and Mr. Burkle said the team had agreed to put up $4 million a year toward a new arena -- $3.6 million a year in rent and $400,000 a year in funding for capital expenses. The Penguins also are adding $500,000 a year for a new parking garage.
The $4 million is exactly the same as Mr. Rendell asked the team to contribute last year under the proposed Plan B funding formula.
Other major financial elements also appear to be in place -- $7.5 million a year for 30 years from Pittsburgh casino winner Don Barden and $7.5 million annually from a gambling-backed state economic development fund, up $500,000 from the initial Plan B proposal.
Despite that, the two sides have been unable to work out a deal, leading many to wonder exactly what the holdup was. Asked about that, the mayor replied, "Numbers are numbers, and they present numbers perhaps in a different way than we present numbers."
Mr. Ravenstahl would not rule out an appeal to the NHL to block a relocation by the Penguins if the team tried to move. Mr. Rendell made the same point in interviews in Philadelphia yesterday, although a spokesman played down the threat, saying it would be a "last resort kind of thing."
"It's important to emphasize they're still trying to work this thing out," spokesman Chuck Ardo said.
The Penguins have expressed frustration as much with the tone of the talks as the substance.
Sources close to the team indicated one of the final straws came Friday, when the state refused to share interest rate information in a dispute over whether more money is needed in the financing package. They're concerned that the antagonistic tone could carry over if issues arise during construction. The Penguins co-owners said in their letter, "We can do no more."
Mr. Onorato, who said it "truly was a shock" to get Monday's letter, said one reason he wants to meet quickly is to find out exactly what is bothering the team and get it resolved.
He acknowledged there "seems to be a big disconnect" in the way the public officials have viewed the negotiations as opposed to the Penguins.
"There's been so much movement in the last month, I thought it was positive movement," he said.
Mr. Rendell said last week one of the few remaining outstanding issues was how to account for an extra $20 million added as a contingency to a proposed arena bond issue. That increased the amount of the bond issue from $270 million to $290 million.
The Penguins also have a concern about the impact the losers' appeals of the Pittsburgh slots license award will have on funding, although both Mr. Onorato and Mr. Ravenstahl indicated it would not be a major impediment.
First Published March 7, 2007 12:00 am