New Pittsburgh Arena
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New Pittsburgh Arena | |
---|---|
Location | Between Center Ave & 5th Ave Hill District |
Opened | 2009 |
Owner | City of Pittsburgh, Commonwealth of Pennsylvania, Pittsburgh Sports and Exhibition Authority |
Construction cost | $290 million |
Tenants | |
Future: Pittsburgh Penguins (NHL) (2009-Present) |
|
Capacity | |
18,000 (hockey) |
The New Pittsburgh Arena will be the new home for the Pittsburgh Penguins. It is expected to open in time for the 2009-10 NHL season and to have a capacity of about 18,000 people. It will replace their current arena, Mellon Arena, which was built in 1961.
[edit] The Offical Announcement
The arena was agreed upon by Penguins owner Mario Lemieux, Pittsburgh mayor Luke Ravenstahl, and Pennsylvania govenor Ed Rendell on March 13, 2007 after much negotiations. At one point, the Penguins had explored moving the franchise to Kansas City's Sprint Center, Las Vegas's Thomas & Mack Center, or to Houston's Toyota Center.
[edit] Pittsburgh Arena Term Sheet
Folllowing is the contract agreed to by all the parties in March 12, 2007 (some parts were taken out)
1. The Penguins will enter into a 29.5 year lease for the new arena, commencing upon its opening. The lease will obligate the Penguins to play hockey in the arena for the term of the lease and contain a non-relocation clause.
2. (a) The Penguins will make thirty (30) payments of $3.6M/year throughout the term of the new arena lease. (b) Upon the opening of the new arena, the SEA will impose a new surcharge on parking. The first $400,000/year of revenue generated from the new parking surcharge will be deposited annually into a capital reserve fund established to maintain and improve the new arena. The balance of the proceeds from the new parking surcharge in excess of $400,000/year shall go to the Penguins. (c) Upon the opening of the new arena, the SEA, at its expense, shall promptly demolish Mellon Arena and pave, stripe and in all respects prepare the land under Mellon Arena for use as a parking lot. Upon completion of this work, the Penguins shall pay an additional $200,000/year over the life of the lease. This use shall continue until the land under Mellon Arena is developed.
3. The Penguins will manage, operate and maintain the new arena, subject to the terms of its current agreement with SMG, and shall retain all revenues generated from all events at the new arena.
7. The arena construction budget will be set at $290M. Including:
*Eligible pre-development expenses previously incurred by the Penguins in an amount of approximately $6M (Commonwealth and SEA to review and approve the itemized expenses)
*Acceptable design and construction contingencies, including a 5% owner contingency
*Oversight expenses of the SEA, estimated at approximately $2.5M
9. A GMP for the mutually approved arena design will be contracted for at the earliest appropriate time, taking into account the relationship between design certainty and achieving a cost efficient GMP. If the GMP plus the other matters listed in Paragraph 7 ("GMP+") exceed $290M, the Penguins and the Commonwealth agree to split any excess 50/50 up to a GMP+ of $310M. The Penguins will have the right to pay their share of the increase in the GMP+ from $290M to up to $310M in the form of increased annual payments, rather than a lump sum. In the event the GMP+ exceeds $310M, the Penguins shall have the right to terminate their participation in the project without further financial obligation, provided that the parties shall first work together in good faith to redesign and value engineer the arena to lower the GMP+ to a level not exceeding $310M.
10. Once the GMP+ is established, the Penguins shall be responsible for any cost overruns, provided that the Penguins shall have the right to modify the design of the new arena to mitigate such overruns, subject to the reasonable oversight of the Commonwealth and the SEA.
11. The SEA will pay the Penguins $8.5M for the hospital site. The parties recognize that it is essential for the SEA to gain access to the property as soon as possible to begin abatement, demolition and other site work. It is anticipated that the source of the $8.5M will be from bond proceeds over and above the $290M referenced in Paragraph 7. In the event the SEA must access the property to commence its work before the $8.5M is available, the parties will work together to devise an arrangement acceptable to the current mortgage holders of the hospital site to enable conveyance of the hospital site to the SEA as soon as possible.
12. The Penguins shall be reimbursed for legitimate predevelopment costs of approximately $6M out of the $290M referenced in Paragraph 7. To the extent any such costs are not reimbursable from the bond proceeds contemplated to fund the $290M, the Commonwealth will develop an alternative means of delivering this reimbursement to the Penguins.
13. To fund marketing expenses incurred by the Penguins in promoting the Team and/or the current or new arena, the Commonwealth will provide funds for the direct economic benefit of the Penguins in an amount equal to $2M, which the parties contemplate will be paid in a lump sum.
14. $3M from the bond proceeds (over and above the $290M construction budget referenced in Paragraph 7) shall be deposited into a capital reserve fund for the new arena.
16. The SEA shall be responsible for all site conditions on the new arena site and shall be responsible for making the site available for construction of the new arena in a clean, buildable condition. Utilities and other infrastructure shall be made available in a manner and in locations consistent with the design of the arena.
17. Development Rights:
*The development rights may be assigned in whole or in part by the Penguins at any time with SEA approval, which shall not be unreasonably withheld or delayed.
*Following execution of the new arena lease, the Penguins shall negotiate, in good faith, terms for PITG Gaming to potentially participate in development rights.
*The Penguins and the SEA shall work together to develop a comprehensive redevelopment plan for the development site. The parties shall work together in a good faith, collaborative manner to promote a timely and desirable redevelopment process. The final redevelopment plan(s) shall be subject to SEA approval, which shall not be unreasonably withheld or delayed.
The Penguins are entitled to $15M of credits from redevelopment. Until the entire $15M credit has been received, these credits may be earned in any combination of three ways: first, in the event the Penguins are developing a parcel, the parcel shall be appraised as described above, and the Penguins shall receive a credit against the purchase price in an amount equal to the appraised value; second, the Penguins shall receive the proceeds from the sale or lease of any parcel to a third party, whether by the Penguins or by the SEA; third, at the conclusion of the ten year drawdown period, to the extent the Penguins have not earned credits totaling $15M, the SEA shall pay the shortfall in cash.
The final price of the arena will cost about $290 million, and even though the final location is not known yet, sources close to the organization say it will be across the street from the current location. Still demolishing to make room for the new stadium will begin Summer 2007.
Preceded by Mellon Arena 1967-2009 |
Home of the Pittsburgh Penguins 2009 |
Succeeded by None |