Consol Energy Center - Planning and Funding

Planning and Funding

The Lemieux Group explored options to build a replacement for Pittsburgh Civic Arena, the oldest arena in the NHL, since its purchase of the Penguins in 1999. In an attempt not to use public funding, the Penguins filed for a slots license under the Pennsylvania Gaming Control Board. The Penguins were granted the license, though the decision of which casino company would receive approval was the Gaming Control Board's decision. The Lemieux Group reached an agreement with Isle of Capri Casinos, which offered to fully fund a $290 million arena, if Capri could also construct a $500 million casino nearby. Other casinos, including Majestic Star Casino and Forest City Enterprises, also agreed to partially contribute to the arena's funding. On December 20, 2006, the Gaming Control Board awarded the license to Majestic Star Casino, who agreed to pay $7.5 million for the first 30 years, in addition to the Penguins paying $4 million per year. The casino experienced financial difficulty, which could have led to taxpayers financing the entire project. However, on August 14, 2008 the Pennsylvania Gaming Control Board selected Neil Bluhm to take ownership of the casinos, which pulled the casinos out of risk of bankruptcy.

The arena's funding plan was agreed upon by Penguins owner Mario Lemieux, Pittsburgh mayor Luke Ravenstahl, and Pennsylvania governor Ed Rendell on March 13, 2007, after much negotiation. During negotiations, the Penguins explored moving the franchise to Kansas City or Las Vegas; after the deal was made the Penguins agreed to stay in Pittsburgh for at least thirty more years. Lemieux later stated that relocating the franchise was never a possibility, but instead it was a negotiation tactic to help the team get funding for the arena from both state and local officials. The arena was originally scheduled to open for the 2009–10 NHL season; however, this was pushed back to the 2010–11 NHL season. The arena was expected to cost approximately $290 million, but rose to $321 million due to increased cost of steel and insurance. The Penguins agreed to pay $3.8 million per year toward construction, with an additional $400,000 per year toward capital improvements. After $31 million cost rise, the Penguins pledged an additional $15.5 million, while the State and Sports and Exhibition Authority split the difference. In September 2009, the State contributed an additional $5.08 million from the "Pennsylvania Gaming Economic Development and Tourism Fund" to cover a rising "interest on variable rate bonds".

The arena is expected to help the surrounding area grow financially; plans are in place to construct a bar and a grocery store nearby. In October 2008, the Penguins reached an agreement with the Horizon Properties Group to build a 135-room hotel adjacent to the arena. A "nationally-franchised hotel" is expected to open in August 2010. A 15-foot montage of pictures inspired by the works of August Wilson will be created for Fifth and Centre Avenues.