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January 22, 2007

Pens: Sorry, we don't share

If you needed any more evidence that sports facility deals aren't just about who pays construction costs, but about who gets the building revenues, the Pittsburgh Penguins owners left arena talks in a huff Thursday night. The reason? State and local officials had suggested that the team share some development rights and parking revenues with the casino builder who would be paying for more than one-third of arena costs. And on top of that, reports the Pittsburgh Post-Gazette, those audacious politicians even wanted the team to pay rent:

The team saw the proposal as a worse deal than it would get under an extension available next year at Mellon Arena, one that would allow rent-free use of the building and give the franchise control over all building revenues, including parking.
In addition to sharing parking revenues and development rights, the state, city and county also want the team to pay rent at the new arena, in excess of the roughly $2 million a year it pays SMG at Mellon Arena, sources said.

Now there's a new threat: If you don't build us a new arena, we'll just stay in our old one.

COMMENTS

The Penguins have received so little support over the years from the city and state, operating at or near bankruptcy as a result, all the while providing untold revenue for the city and state.

The Pens should get the everything, Fast Eddie "The Swindler" ought to be brought up on charges.

Posted by Norman Miller on January 22, 2007 10:20 AM

The casino operator mentioned in "Sorry, we don't share" was responsible for the Pens NOT getting a free arena from another casino operator. Why should the Pens share anything with him? He agreed up front to contribute one third to get the license. Now he wants more for it after he gets the license over the free arena casino. Who's the real greedy one? Please do your homework before knee jerking the issue.

Posted by bill on January 22, 2007 10:22 AM

Do you know the way to Kansas City?

Posted by Mike on January 22, 2007 10:48 AM

Norman: If by "untold" you mean "nobody's said how much it is," then I'll grant you that. Pretty much any economist will tell you that almost all the money currently being spent on Penguins games would be spent on something else in Pittsburgh, and certainly in the state of Pennsylvania, if the team weren't there.

Bill: Did the "Plan B" casino bidders previously agree to what the Penguins' lease would look like at a new arena? If so, I didn't see it in the news coverage of the arena debates. If the lease terms were never part of Plan B, then it's perfectly reasonable for the Penguins and the casino operator to be haggling over the split now. (Not that it really matters to the public one way or the other which private party gets what, though if the team would pay rent to the government, that'd at least help recoup the taxpayers' costs.)

Posted by Neil deMause on January 22, 2007 10:49 AM

Neil: I live in Boston, I fly into Pittsburgh to see games. I buy Penguins merchandise. There are others like me, lots. We wouldn't spend our money with Pittsburgh based companies for team merchandise, or for goods and services in Pittsburgh if not for the Pens. By untold I could have as easily have said incalculable. Surely you see this?

The deal was so much better for Pittsburgh and Pennsylvania before Eddie "the Swindler" and his boys got greedy and mucked it up for everybody.

Third party land deals, behind the back payoffs, and slots licenses for campaign contributions all make Eddie "The Swindler" rich for sure, but his criminal influence has put the PA taxpayer in a very bad place.

Posted by Norman Miller on January 22, 2007 01:05 PM

man the pens have to stay away from bad influences and seedy elements. Before you known it the influence of gaming will beset them if they happen to make a move to Las Vegas LOL. ER opps I am sorry they are already in talks with Gaming elements in Detroit and Pittsburgh LOL. Las Vegas and seedy elements are moving to a sport franchise near you pittsburgh.
Go west young Crosby go west or southwest to Kansas city LOL.

paul

Posted by paul on January 22, 2007 01:48 PM

Norman,

To be fair, right now the only person being greedy is Lemieux and the team.

If I were to go to an investor, as him for an investment which would equal 1/3 of my business venture, then tell him I would not pay him a dime in revenue, the investor would most likely tell me something involving the letters F and U. For the casino operator, the city, county, and state, this is a bad deal.

The Pens don't deserve an arena anymore than, lets say me demanding the county build me a house for living and contributing to the area.

Posted by Mike on January 22, 2007 01:53 PM

well mike yes it is true mario may be greedy but look at what he is offered. An state of the art new Arena in Kansas city rent free, 50 percent of revenues from said arena and
no contribution of money from the team to the construction. I think it is a case of Pittsburgh dicked around the issue for 7 years and Mario at least was still entertaining talks from Pittsburgh . Sure they don't deserve an arena but does pittsburgh need or deserve a nhl team? If someone offered you a free arena with 50 percent of the revenues with no investment from your business what would you do? Mario stayed in Pittsburgh thru the bankruptcy of the team and his being owned salary. Mario did not sell to Mr. blackberry a couple of months back and he has not taken Anschultzs offer yet. Isle of Capri was the solution for the city, county and state which would have isolated the public from the arena funding. Now that offer is gone and Mario has better things to do then to wait for Pittsburgh to take another 7 years to resolve the issue.
How many times does the city have to fumble the ball on the 50 yard line before the fans realize that the offers from their civic officials are too little too late as the old expression goes.
Mario must be very frustrated to say the least.

I think it is nearly over, Mario will take the Kansas city offer and make his investment back .
Who knows Mario just may sell to Blackberry man while the team gets moved to Kansas. The very sad thing for Pittsburgh is that it could have been avoided with no cost to the taxpayer. The fans have been supportive and are also the losers as they are seeing a very good young pens team and that is going to leave soon.

For all the hockey fans in pittsburgh hope you enjoy slot machines from feb. to may because that is the only action you will see annually in those months if or when the pens leave town . The city once had a pro basketball team and that does not look like it will ever come back. Ditto for the NHL if the pens leave town.

paul

Posted by paul on January 22, 2007 07:03 PM

Neil: Isle of Capri offered a new arena in their proposal to get a casino license. No questions asked. Only then did Don Barden add his $7 million/yr offer to counter IOC. Again, no questions asked. Barden gets the license. Now, he wants deals and stipulations on what was originally a no questions asked offer. If he had told the Gaming Board that there were "conditions" on his arena money, they may have thought harder about the final choice.

Posted by bill on January 23, 2007 02:17 AM

well bill wouldn t you say that the city of pittsburgh , the county and state really blew it.
Sure IOC was really what amounts to a bribe in ways but what is dealing out ratepayers money to the Pens for a new arena to keep the team in the city?

Just goes to show hall of fame hockey players sometimes have a bit more on the ball then politicians. A Simple business proposal that involved granting a casino license to IOC to have that party take care of a problem for a business in your city.
Instead it is now someone else has the license and
the levels of government have to fund the new arena.

Seeing how this has developed I think Mario has given enough Latitude for things to be done for the team now perhaps it is time to move the team
to a city that is bending over backwards with a new arena built on spec.

After a while a man has to do what a man has to do.
paul

Posted by paul on January 23, 2007 05:05 PM

The politicians should invite the Pens to play 10 home games a year in K.C. and/or Houston, etc. -- until the new arena is built. Then the league would benefit. And, the team could charge a higher premium for its tickets, etc. That would increase demand.

Furthermore, the new Pens arena should NOT go where the present arena sits. That central city location isn't well suited for NHL. Rather, the Pens should move to a larger, better location by the airport, near the highways, its customers, and perhaps at the edge of the river too. With 500 acres to develop, the Pens could make a new-urban Olympic Village, selling high-rise condos, etc. Then the upside for the team is even better. The land isn't as tight there -- and they'd bring value to the table and be able to profit from it.

More has been posted at http://Rauterkus.blogspot.com

Meanwhile, the central core neighborhoods, the Lower Hill District, could flourish without the hockey nights and flood of fans.

Posted by Mark Rauterkus on January 23, 2007 07:25 PM

Doesn't anyone else feel a slight "ick" factor with a casino leading the charge on this? Gambling does NOT contribute to economic growth, but rather just redirects disposable income from one place to another. (Ironically, probably away from hockey tickets as well.) In addition, casinos place immense pressure on governments and local charities in the form of welfare and social services when families are torn apart by compulsive gambling. At least when gambling was run by the mob we could look down our noses at it - now we have governments and corporations hand in hand, selling it to us as harmless entertainment. Pardon me while I retch.

Posted by Dennis Prouse on January 24, 2007 11:30 AM

Dennis, you couldn't TAX gambling revenue when the mob ran it, and you couldn't regulate it. I agree with the fact that gambling DOES redirect income, but it would do that legally or illegally.

it's better to have it out there where we can keep an eye on it and not take the ostrich approach.

Posted by sjs1959 on January 24, 2007 12:01 PM

Pens fans-I hope they don't leave but IOC was nothing more than a free ride for Mario. Barden's proposal was the best fit for the city(if we must have gambling) and to boot he is going to put $210,000,000 into the construction of the new arena. I wish that Mario would quit crying, just like he did when opposing players clutched his sweater.

Posted by Ted on February 10, 2007 05:58 PM

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