Penguins, governor expected to hold arena meeting Thursday

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The private meeting would be the first since Jan. 4, when Penguins owner Mario Lemieux came away from a preliminary session with Rendell, county and city officials saying he was "very optimistic" that an agreement could be reached.

Neither side has spoken publicly since then as negotiations have continued. The Penguins' lease at 45-year-old Mellon Arena ends in June, and the team is free to relocate after that.

The arena talks began after the state gaming board rejected a company's plan to build a US$290 million Penguins arena for free in exchange for the license to build a downtown Pittsburgh slots machine parlour. The board chose one of two competing bids, by Detroit businessman Don Barden, who has agreed to pay $7.5 million a year toward a new arena but will not pay the full cost.

The so-called Plan B proposal currently being discussed, first made by Rendell in March, initially called for the Penguins to pay $8.5 million up front plus about $4 million per year. An additional $7 million per year would come from the state's take of gambling revenues.

However, it is likely that the $8.5 million payment will be covered by the Penguins selling land needed for the arena to Pittsburgh's Sports and Exhibition Authority. The team also is expected to pay less than $3 million per year as its share of the arena's cost, a sum comparable to that paid by several other NHL teams playing in relatively new arenas.

To sweeten the deal, the Penguins also may be allowed to share in the millions of dollars a year in non-hockey revenue that is generated by the arena.

The Jan. 4 meeting was held hours after Lemieux and other team officials toured the under-construction Sprint Center in Kansas City, which is hoping to land the Penguins should they decide to leave Pittsburgh.

With NHL scoring leader Sidney Crosby plus promising young players Evgeni Malkin, Jordan Staal and Marc-Andre Fleury, the Penguins have become one of the sport's hottest properties - a factor that has increased their bargaining power. They are in playoff contention for the first time in six years.