Monday, July 31, 2006

How much for a new arena?

Interesting article about arena costs in the Pittsburgh paper today.

I suppose this applies to Orlando, too.

$290M in funding tight, but doable, for arena

Several analysts uninvolved in the Pittsburgh discussions view $290 million as a fair starting point for construction-related costs, if the arena is not intended to be among the league's largest, and if it doesn't necessarily include the most luxurious amenities.

This will be an interesting twist in the Pittsburgh arena saga. Let's say Isle of Capri doesn't get the slots license (seems likely). Sam Fingold and the city, county and state government will have to work out a lease for the $315M Plan B funded arena. But, who pays cost overruns?
Here's an important paragraph to remember.
The governor has laid out Plan B as a financial alternative relying on $7.5 million a year for 30 years from the slots licensee, $7 million a year from a state development fund covered by slots revenue, and an annual Penguins contribution that includes a $2.9 million payment and giving up $1.2 million in naming rights that would be directed toward the arena cost. Also, the Pens would be expected to pay $8.5 million up front, as team officials indicated in the past they would be willing to do.

Just so the Devils are never mentioned as a potential franchise looking to relocate, which some uninformed people say "Why don't the Devils move back to KC?":
The only NHL arena currently under construction, to open in 2007 in Newark for the New Jersey Devils, carries a price tag of $310 million. It will contain 18,000 seats, 78 luxury suites, 150 food and retail areas, a gourmet restaurant, 750 television monitors and 12 escalators.

Also, Guy Junker from the Pittsburgh Trib decides to frighten Pittsburgh hockey fans.

Junker: Future of Penguins grows cloudy

Early in his bidding process, he talked about moving the team to Kansas City, where there is a new building and a sweetheart deal all but set.

Well, there isn't a building, yet. And, we have no idea about a sweetheart deal. We know the deal doesn't include operation of the facility and we know AEG must get their cut from any deal in order to pay off their $50M investment.


At 9:12 AM, Blogger Max said...

Wow, the Pens are contributing almost $3 million! They make David Glass look like Bill and Melinda Gates.

At 1:25 PM, Anonymous Anonymous said...

Plan B is not a done deal yet. It is more framework than anything else. Plus, if memory serves me correct, Fingold did his about face round about the time the politicos here started talking new leasing terms. More than anything else, this is a key element. Pittsburgh can offer him a better lease deal than KC since we haven't started building the new arena yet. As was pointed out on this site, AEG will want ROI, so their leasing terms will be a lot less friendly to Fingold. We can offer him a greater percentage on parking/concessions, etc., than Sprint Center.

At 1:26 PM, Anonymous Anonymous said...

correction: we SHOULD be able to offer him a better deal than KC. Nothing is guaranteed when PA politicians are involved....


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