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Finally! Shovels hit the ground in Pittsburgh

Although there are still questions about funding, construction has started on Pittsburgh’s new arena.
Pennsylvania Gov. Ed Rendell says he was happy to fill in for Sidney Crosby Thursday. Standing on the spot where Penguin fans hope to see Crosby in a couple of years, Rendell helped break ground on the city’s new hockey arena. Located across the street from Mellon Arena, it is expected the new place will be open for the 2010-11 season.

"Construction of this new arena will provide immediate economic stimulus by creating construction jobs but, more importantly, it will benefit residents for decades to come," Gov. Rendell said. "In addition to keeping the Penguins in Pittsburgh, the arena will attract more shows and events because of improved performance space, seating and technology."

It’s been a dicey run. The long negotiating trail included several discussion with the folks in the Hill neighborhood, where the arena will be located. It took a while for the parties involved — Allegheny County, the city of Pittsburgh, the Sports and Exhibition Authority and the Penguins — to agree on the deal. The new facility will replace Mellon Arena which has been the Penguins’ home since the team was formed in 1967.

But exactly who is footing the bill for the $290 million arena is still up in the air. The city, county, state and Penguins agreed on their shares of the deal. But a considerable amount was supposed to come from a casino that was scheduled to be opened on the city’s North Shore next May. But the guy who was supposed to build the casino, Don Barden, now says he has run out of money (construction stopped July 1) and wants to sell his license to a group headed by Chicago billionare Neil Bluhm.

Not so fast, says the state’s Gaming Control Board. A hearing on the possible sale was held Thursday. Some Pittsburgh-area legislators have asked the board to revoke Barden’s license and make it available to a new pool of competing applicants – a process that could add a year or more to the facility’s project opening date. 

And this is where it gets sticky. As part of his bid to win the casino license from state regulators in 2006, Barden pledged more than $200 million over 30 years to help build the Penguins a new arena, a commitment that Bluhm has said he will fulfill if the gaming board approves his rescue plans.

Bluhm  warned that if the gaming board does not approve the deal, the property will plunge into bankruptcy, potentially bogging it down for years in litigation. He further suggested that, if the board doesn’t approve the deal or delays the project very long, he may walk away altogether and look elsewhere.

So, why Rendell and others were happy to get started on the project at the area where center ice would be located, a more important decision regarding the arena’s future was being discussed in Harrisburg.