Now that the dust has begun to settle on the Pittsburgh Penguins‘ $290 million arena deal – if you think I’m going to come up with a penguin-related pun for “dust settling,” well, I tried – it’s becoming somewhat clearer what team owner Mario Lemieux and his pals got for their three months of move threats.
Instead of paying $8.5 million up front towards the arena, the Penguins owners will get $10 million in cash.
The team will now put in $4.2 million a year, up $100,000 from last year’s plan, but can use naming-rights fees to pay up to $2 million a year of that. (The original plan didn’t specify who would get naming-rights money.)
The team and state will split the first $20 million in cost overruns, something that sports industry experts say is near certain to happen. Overruns beyond that amount will be covered by the team.
The Penguins owners get development rights to the site of their current Mellon Arena, though they relinquish them if they don’t develop the land over the next ten years. (Hill District neighbors of the arena aren’t exactly thrilled about this, with Preservation Pittsburgh executive director Steven Paul complaining to the Pittsburgh Tribune-Review: “There’s all this rhetoric that ‘we’ll absolutely work with all the stakeholders of the community to come up with the best plan, but we’re going to demolish it first.'”)
All told, it comes to … okay, I’m not enough of a development expert to say how much the concessions the Penguins got from the state of Pennsylvania are worth in monetary terms, but it’s more than nothin’. Score another one for leverage.
Out in Kansas City, meanwhile, the spurned arena management company AEG is trying to put a happy face on its failure to bribe the Pens into moving west, with company VP Mark Faber insisting that they were “still having active conversations with the NHL for the 2007-08 season,” while simultaneously asserting, “Let’s remember the initial reason for Sprint Center was we were looking as a city and an organization to bring the Big 12 championships back to Kansas City, which we have secured for 2008.” They sure don’t make 800-pound gorillas like they used to.