Thursday, November 13, 2008

New Arena Runs $31 Million Over Estimates

The final development agreement for the new arena has come in nearly 11-percent over original estimates. The arena for the Penguins was originally projected to come in at $290-million. Now that about half the bids are in, the number has grown to $321 million. Of that $31 million increase the Penguins will be responsible for 15 and a half million, the state10 million and the Sports and Exhibition Authority’s share comes in at 5 and a half million dollars. SEA Executive director Mary Conturo says there is a possibility that the additional money may not be needed thanks to overruns built into the estimate. She says the SEA will cover its costs through ticket surcharge funds, parking garage construction cost savings and income from bond fund investments. The city and county have also agreed to loan money to the authority if needed. Any additional construction cost overruns will be the Penguins responsibility. The approval of the amendment also locks the penguins into a 29-and-a-half year lease. Penguins CEO Ken Sawyer says the arena, in the final design, allows the team to do everything it set out to do with the new facility including the number of seats, the number of suites, flexibility for multiple uses, a ballroom overlooking the city and state-of-the-art video and audio equipment. He says this “keeps the Penguins in Pittsburgh forever.”

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