Penguins to aggressively explore relocation

PITTSBURGH -- The Penguins moved a step closer to leaving Pittsburgh, declaring on Monday an impasse in their new arena negotiations with state and local leaders and saying they will actively pursue relocation.

The breakdown in arena talks came only three days after Gov. Ed Rendell said he felt an agreement was close. It also increases the possibility the Penguins will be playing in Kansas City next season.

"We have made a single-minded effort to bring this new arena to a successful conclusion and keep the team in Pittsburgh," owners Mario Lemieux and Ron Burkle said in a letter to Rendell and local government officials. "... Our good-faith efforts have not produced a deal, however, and have only added more anxiety to what we thought at best was a risky proposition for us moving forward."

In the letter, Lemieux and Burkle put the blame for the impasse on government officials, arguing they agreed to pay $120 million over 30 years to help build a $290 million arena and cover construction cost overruns, yet still have not reached a deal.

NHL commissioner Gary Bettman became involved in the talks several weeks ago but has also been unable to finalize an agreement.

"We can do no more," Lemieux, the longtime Penguins star, and Burkle said in the letter.

Pittsburgh mayor Luke Ravenstahl told the Pittsburgh Post-Gazette on Tuesday that he and other elected officials have "reached out" to the team since receiving the letter.

"I still believe that we are very close to getting this deal," Ravenstahl told the newspaper, adding that he, the Penguins, Allegheny County chief executive Dan Onorato and Rendell need to "sit down, talk about the specifics, find out where we're not in agreement, and go from there."

Rendell also said in a statement Tuesday that "an exceptionally attractive offer [was] on the table" for the Penguins and that he would "continue to work with all the parties in refining the offer in an effort to try to reach an agreement." Rendell's spokesman, Chuck Ardo, said that no talks are scheduled but the governor was willing to attend a meeting if one "is warranted."

"The governor has said on numerous occasions that he believes this is the best arena or stadium deal any sports team in Pennsylvania has been offered," Ardo told the Post-Gazette.

The Penguins had an agreement with Isle of Capri Casinos to build the arena at no expense to the team or taxpayers in exchange for a license to build a Pittsburgh slots casino, but a state board in December chose a competing bid.

On Jan. 4, the team, state, city and Allegheny County began negotiating an alternate arena funding plan. At the time, government officials were asking for the team to contribute about $4.1 million per year but lowered that to $2.8 million during the first round of negotiations.

During subsequent talks, the Penguins agreed to up that annual contribution to $3.6 million, plus $400,000 in operating expenses, after the state said there was a funding shortfall. However, the two sides still could not close a deal.

Kansas City has offered its nearly completed Sprint Center to the Penguins rent-free. The Penguins would also gain revenue from development projects around the arena.

However, the Penguins would be leaving one of the NHL's strongest U.S. markets for a smaller one that lost an NHL team in 1976 after only two seasons because of lack of support. The Penguins' home attendance and local TV ratings are among the strongest of the 24 United States-based franchises.

Though the Pittsburgh-to-Kansas City buzz has kept both towns talking -- and wondering -- all winter, at least a couple officials from Kansas City's end have been skeptical about it happening.

William "Boots" Del Biaggio III, who has offered to put up $200 million to bring an NHL team to Kansas City, recently expressed pessimism the NHL would move hockey out of a "great city" like Pittsburgh. The Penguins, buoyed by the success of young phenom and NHL scoring leader Sidney Crosby, are zooming toward the playoffs and are a hot ticket in town.

Lemieux, frustrated with the politics of replacing the NHL's oldest arena, issued a 30-day deadline of whether to accept Kansas City's offer to move into the Sprint Center. That timeline has now stretched to two months with no resolution.

When Lemieux's group bought the team in federal bankruptcy court in 1999, the Hall of Fame player said he did so to ensure the team's existence in Pittsburgh.

The Penguins' hardball negotiating stance comes with the team contending for a playoff spot for the first time in six years. A youthful team led by Crosby and rookies Evgeni Malkin and Jordan Staal has become one of the league's prime attendance draws.

At home, the Penguins are playing to nearly 96 percent of arena capacity for the season. All of their remaining nine home games are expected to attract standing-room-only crowds.

The Penguins have also begun selling season tickets for the 2007-08 season in Pittsburgh, even though they have not agreed to play there another season.

"They're tough negotiators," Rendell said.

Information from The Associated Press was used in this report.