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Penguins' arena plan includes an Uptown renewal worth $500 million

Tuesday, March 12, 2002

By Tom Barnes, Post-Gazette Staff Writer

The Penguins yesterday proposed a huge Uptown office/housing/retail development, costing more than $500 million, across Centre Avenue from a new $225 million hockey arena.

Architect's drawing of a new hockey arena proposed by the Pittsburgh Penguins as seen from Fifth Avenue.

The ambitious project, which would demolish Mellon Arena, also includes a new hotel and a city park to be built over the Crosstown Expressway.

Team officials claim the development would provide 5,000 new jobs, housing for 2,500, $20 million in additional tax revenue and take at least 15 to 20 years to complete.

The central question of where the money would come from was left unanswered.

The development would sit on the 28 acres now occupied by 41-year-old Mellon Arena and its surrounding parking lots, said Ken Sawyer, president of the Lemieux Group, the team of investors headed by Penguins star Mario Lemieux that owns the Penguins.

"This is one of the greatest development sites in the United States," said Donald Carter, an architect with Urban Design Associates, who is working with the Penguins.

A related article

Lemieux made sure plan for arena put hockey first


"It's near to public transportation and it lies in proximity to Downtown. It's an opportunity to rebuild a piece of the city that kind of went away," he said, referring to the mostly-black neighborhood of the Lower Hill that was demolished in the late 1950s to make way for the current arena.

The Penguins plan calls for extension of Wylie Avenue down the hill westward to form the spine of the redevelopment area.

As outlined by Sawyer, Carter and Patrick Phillips, president of Economics Research Associates of Washington, D.C., the proposed development would contain:

800 units of new rental housing just west of the current Crawford Square community.

300 new for-sale housing units.

Three to seven new office buildings, containing 1.1 million square feet.

200,000 square feet of retail and restaurant space, mostly on the ground floors of the office buildings or in new two-story buildings.

A 264-room hotel.

Several new parking garages containing nearly 3,000 spaces.

One or two new city parks. Sawyer wouldn't say how much of the $225 million cost of the new arena would come from the team and how much would have to come from public sources like the city, county, state or Sports & Exhibition Authority.

The Penguins are believed to want a deal similar to what the Pirates got at PNC Park, where the baseball team provided about $47 million, or 18 percent, of the $260 million project cost.

Sawyer said that before he can say how much money the team would contribute, he needs to know how much the operating costs at the new arena will be, who would pay them and how much revenue from advertising, naming rights, concession stands and parking the team will get.

Yesterday, Mayor Tom Murphy, Allegheny County Chief Executive Jim Roddey and sports authority Director Stephen Leeper seemed reluctant to provide much public funding.

An agreement signed by the city, county and Penguins in September 1999, when Lemieux bought the team, contains a date of June 30, 2002, for devising a financing plan for an arena.

But Leeper noted the deal also requires "a considerable amount" from the team.

Roddey said the county "does not have the funds available to contribute to construction of a new arena." He said county funds would be limited to water, sewer and roadway improvements "just as we would do for any other business."

Spokesman Craig Kwiecinski said Murphy "has made it clear there is no city operating money available" for an arena, and is looking for "significant" help from the county, state and private sector.

Phillips said the public sector would provide 10 to 20 percent of the cost of the project, for items like water and sewer lines and street construction.

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