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Budget bill lists $90M for arena

| Saturday, Oct. 19, 2002

HARRISBURG — A capital budget bill headed for Gov. Mark Schweiker's desk includes $90 million for a new hockey arena — $30 million more than the Legislature previously authorized.

The capital budget is a "wish list" of state projects. A project must be on the list to receive an appropriation in any given budget year. However, only the governor can release the money.

The House and Senate approved the bill on Oct. 8 and 9. The governor could sign the capital budget bill as early as Monday, vetoing certain portions if he chooses.

The next governor then could release the money — to go toward replacing Mellon Arena, Uptown. The project requires a local match and it's not apparent who would provide that money.

The $90 million coincides with the amount needed from the state as laid out in a financial plan by Sports & Exhibition Authority Executive Director Stephen Leeper on July 31 for a $270 million plan for a new hockey arena for the Pittsburgh Penguins.

Lemieux Group President Ken Sawyer said he learned a few weeks ago that additional money would be included in the appropriations budget. He called the measure "a first step at the state level."

"I'm always optimistic because it's a very, very important asset for the region, and it's not just for the Penguins. It's essential for this to be done now, and I believe we'll get there," Sawyer said. "We're dealing with an extremely old building and we're in an environment where interest rates are very low, construction activity would be welcome, and the team needs these resources as soon as possible.

"For all these reasons, and to ensure that the 100 other events keep coming to Pittsburgh, we need to move as fast as we can."

The SEA's plan calls for no upfront cash contribution from the team, relying heavily on the requested $90 million from the state and $53 million from the Regional Asset District tax, a local sales tax. The team would contribute the site of the former St. Francis Hospital, which is valued at $11 million. The former hospital is on Centre Avenue across from Mellon Arena.

The SEA developed the plan to make good on a promise to Penguins owner and star Mario Lemieux. He bought the team out of bankruptcy after the SEA agreed in 1999 to a "good faith effort" to build a new arena. Built in 1961, Mellon Arena is the oldest in the National Hockey League.

Craig Kwiecinski, a spokesman for Mayor Tom Murphy, said the administration did not request the additional money from the state. He declined further comment. Allegheny County Executive Jim Roddey was not available for comment.

Leeper stressed that the money won't necessarily be released by the next governor.

"I think that there was a plan put forth and obviously now it will require a lot of negotiation and debate about what is the appropriate mix of funding for the arena, and we are in the process of having that sort of discussion," he said.

Area lawmakers said Friday they are virtually certain the project will land in the lap of the next governor, either Democrat Ed Rendell or Republican Mike Fisher. The election is Nov. 5.

Rendell has said he would limit state aid for a new arena to $20 million to $30 million in infrastructure improvements.

Fisher has said the level of state support should hinge on how much backing the project generates locally.

The legislators and key staffers said they believed funding the arena would require raising the state's debt ceiling again beyond the $250 million approved by the Legislature last week.

Nothing would happen immediately on the $90 million state share for an arena, if it is signed into law by the governor.

"The problem for Pittsburgh is the local match," said state Rep. Don Walko, a North Side Democrat. "The RAD (Regional Asset District) money is pretty well tapped. Before the next governor writes a check for $90 million, he ought to demand that the local share be funded privately. Maybe the new governor could go to the corporate community."

State Sen. Jack Wagner, a Beechview Democrat, had placed $60 million for an arena in last year's capital spending bill. The proposed capital budget means $30 million more would be available, he said.

"I think it's a project under the next governor," he said.

The $250 million in new bond money would not be enough to fund a $90 million project for Pittsburgh and still have enough money for the rest of the state, said David Atkinson, a top aide to Senate President Pro Tempore Robert Jubelirer, an Altoona Republican, who sponsored the debt ceiling increase.

Regarding the $90 million, state Rep. John Pippy, a Moon Township Republican, said, "That's the first I've heard of it. I'm not surprised."

Pippy said it was apparently added in an omnibus amendment by the House Appropriations Committee. It was not immediately clear which lawmaker requested it.

"That number ($90 million) is certainly up for much discussion in terms of viability," said state Rep. Dan Frankel, a Squirrel Hill Democrat.

At this time, it isn't at the top of the list of the region's priorities, Frankel said. "I am open to talking about it, and I may support it," he said.

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