Some politicians worry Plan B is not enough
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With plans on the table to build a new arena, local and state political leaders believe they can cut a deal to keep the Penguins in Pittsburgh under new owner Jim Balsillie, who as recently as last summer wanted to move the team to Ontario.
But others aren't nearly as confident, worried that the Gov. Ed Rendell-crafted Plan B to fund a new arena might not be enough to entice the Canadian businessman to stick around.
As news of the sale broke, Allegheny County Chief Executive Dan Onorato said yesterday he and Pittsburgh Mayor Luke Ravenstahl are ready to start negotiations immediately with Mr. Balsillie on a new lease that would keep the team here for the next 30 years.
He was confident they could hammer out a deal, given the proposals in place to build the new arena and recent statements by National Hockey League Commissioner Gary Bettman, who said he wanted to keep the team in Pittsburgh, describing it as a "hockey hotbed."
"It looks like the probability of keeping the Penguins here for the long term is real, because we are going to be able to meet what they're asking for, and that is a new arena, on the timeline that they've requested," he said.
Mr. Ravenstahl added the city and county "have done what it is we can thus far" to ensure the team stays by crafting Plan B and acquiring the property on which a new arena would be built.
"The things that we could control as a city government and a county government, we did," he said.
Mr. Balsillie, chairman and co-chief executive officer of Research in Motion, the maker of the BlackBerry, backed out of a deal to buy the team in July when he realized he might have problems moving it to Hamilton, Ontario.
But Mr. Onorato noted that Mr. Balsillie now is indicating he will try to keep the team here, contingent on a workable deal to build a new arena.
There are two proposals on the table to build a replacement for Mellon Arena, the NHL's oldest facility.
Isle of Capri Casinos Inc., in partnership with the Penguins, has pledged $290 million toward an arena if it gets the license for the Pittsburgh slot machine casino. The agreement between Isle of Capri and the Penguins is binding on whoever buys the team.
The second proposal is Mr. Rendell's Plan B, crafted in case Isle of Capri doesn't get the gambling license. It relies on contributions of $7.5 million a year for 30 years from either Forest City Enterprises or PITG Gaming LLC, the other two bidders for the casino; $7 million a year for 30 years from a slots-financed state economic development fund; and $4 million a year from the team. The Penguins also would be required to put up $8.5 million in advance for construction.
Mr. Balsillie is not bound by Plan B. But Mr. Onorato and Mr. Ravenstahl believe it should be enough to keep the team here based on statements by Mr. Bettman, who said the only thing that could drive the Penguins from Pittsburgh would be the inability of local leaders to "provide a new building as they provided with the Steelers and Pirates."
Both politicians said the deal, at least in terms of team contributions, is similar to what the Pirates and Steelers received for PNC Park and Heinz Field, respectively.
"I think Plan B meets the commissioner of hockey's definition, that is, similar to the Steelers and Pirates deals. Plan B is exactly that," Mr. Onorato said. "I'm really going more on what [Mr. Bettman] says needs to be done and I believe we're already there."
In response to the latest developments, NHL spokesman Frank Brown said Mr. Bettman "has said and will continue to say we need an arena deal that makes sense to the Penguins, in the way the state and county structured deals for the Steelers and Pirates that made sense for those teams. The Isle of Capri deal makes sense and will ensure the future of the Penguins in Pittsburgh."
Others aren't so sure Plan B will do the same.
City Councilwoman Tonya Payne, whose district includes Mellon Arena, said the Penguins are a key part of the Hill District's revitalization, and that the Isle of Capri proposal is the only way to ensure that they stay, especially given the sale to an out-of-town buyer.
"I think Plan B is absolutely ridiculous," she said. "Why should [taxpayers] pay for an arena when somebody else will do it for free? ... I don't believe [Plan B] will be strong enough" to keep the team here.
Councilman William Peduto, a likely mayoral candidate, is also an Isle of Capri supporter, and questioned whether Plan B could win legislative approval, if that is needed. "My bottom line on Plan B is, show me the money," he said.
However, Councilman Jim Motznik, another Isle of Capri supporter, was more optimistic. He believes both plans to build a new arena are workable.
Mr. Onorato said the Penguins already had committed to providing $2.9 million a year for an arena under a previous plan.
He said what basically is up for negotiation now is $1.1 million a year in naming rights dedicated toward construction under Plan B.
"I think what gets negotiated here is what do you do with the $1.1 [million]. What does it go for? Does it go for debt service? Does it go for operations?" he asked, adding that could be subject to bargaining.
City Council President Doug Shields said losing the Penguins could cost the city millions of dollars in tax revenue.
He said using gambling revenue to help finance a new arena would be more palatable to the public than the controversial packages that paid for Heinz Field and PNC Park, largely taxpayer subsidized.
With the help of a $26.5 million state advance, the city-county Sports & Exhibition Authority already has purchased the properties needed for a new arena, which would be built across the street from Mellon Arena.
It plans to begin clearing the site in January.
First Published October 6, 2006 12:00 am