Much work remaining in arena talks, Rendell says
Governor says many details unresolved in negotiations with Penguins, but no 'deal-breakers'
Friday, February 16, 2007
By Mark Belko, Pittsburgh Post-Gazette
Gov. Ed Rendell doesn't see any "deal-breakers" that would prevent an agreement with the Penguins on a new arena, but added the two sides are still "a lot of details" away from a final accord.
"There are so many nuances to this, it is amazing," he told reporters yesterday. "Each time we solve three or four of the problems, one or two more crop up, but none of them in my judgment are deal-breakers."
While development rights, parking revenues and the Penguins' share of the arena funding have long been considered key issues to be resolved, Mr. Rendell added another yesterday -- what happens if construction costs exceed the Plan B funding amount.
The Penguins have agreed to cover cost overruns once a guaranteed maximum price has been established. The question is what happens if the final price comes in above the amount of financing available under Plan B.
While conceding that that's a "problem," Mr. Rendell said he believes it can be resolved through the design of the building and through a no-strike agreement the city, county and state will seek from unions involved in the project. He said both should help keep costs down.
Talks between the Penguins, the governor, Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato have moved well into a second month since team co-owner Mario Lemieux emerged from a Jan. 4 meeting to say he was optimistic about the prospects of keeping the team in Pittsburgh.
At the same time, the Penguins are entertaining an offer from Kansas City to move into the new rent-free $276 million Sprint Center next season. The arena opens in the fall and the Penguins would not have to pay any construction costs. They would share building revenues.
The team is free to move this summer after its Mellon Arena lease expires at the end of June.
Locally, even as the two sides continue to wrangle over various issues, Mr. Rendell said he hopes to have an agreement completed in the next couple of weeks.
"This is a slow and arduous process. This is an ongoing process. We make progress every day but there are a lot of details, a lot of details involving land use, a lot of details involving parking ... everything under the sun has to be ironed out," he said.
The Penguins have repeatedly declined comment on the negotiations.
The two sides have participated in conference calls and other conversations over the last two weeks. Mr. Rendell also talked to Penguins' officials yesterday while in Pittsburgh for events.
"Each time we get together, either by phone or in person, we make a little progress and we've still got a little bit more to do and I'm hopeful we can bring this to a conclusion shortly," the governor said.
The parties are trying to reach an agreement under the Plan B funding formula, which includes a contribution of $7.5 million a year for 30 years from Pittsburgh casino license winner Don Barden and $7 million a year for 30 years from a slots-financed state economic development fund.
The Penguins' share started out at $2.9 million a year, plus $1.16 million annually in naming rights, and an upfront contribution of $8.5 million. Under a revised formula, Mr. Rendell has said the Penguins' share would be significantly lower than the $2.9 million per year the Pirates put in toward PNC Park. It's unknown whether naming rights revenue is part of that.
Like Mr. Rendell, Mr. Onorato and Mr. Ravenstahl were optimistic about closing the deal, but would not put a timetable on it.
"Do I think we'll get a deal? Yes," Mr. Onorato said. "I think we'll resolve this long term. We're not there yet."