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Underground arena a possibility
Sports Finance & Management Group president Michael Shapiro said Friday a Wall Street investment group has committed to loaning $150 million to pay for the underground arena.
"We think it's a great statement for a great community," Shapiro said, during a Friday morning news conference at the Ramada Plaza Suites & Conference Center, Downtown.
Before the concept is put to paper and built, state politicians from Allegheny County want to analyze SFMG's proposal. They will request $80,000 from state government to cover its cost.
SFMG says it can build a new arena for $150 million-$160 million, far less than the $278 million proposal previously endorsed by the Penguins hockey team and the city-county Sports & Exhibition Authority.
SFMG says it will use private financing. It did not make public its source of money.
The previous plan called for the Penguins to pay $108 million toward the $278 million arena proposal, seeking public financing to pay the rest.
"We have been contending this can be done for substantially less," said Mark Singel, a SFMG representative and Harrisburg lobbyist. Singel is the former lieutenant governor.
The Penguins say the team is not opposed to SFMG's plan. Rather, it is curious about whether the idea would work.
"As we have said all along, the Penguins are all for an arena that can be built for the least amount of money possible, and ideally with no public funds," said Penguins President Ken Sawyer. "So now, we encourage this group to show they have information to support their claims."
The Penguins say the team needs a new arena to generate more revenue. If not, it might have to consider moving.
SFMG's proposal has caught the attention of some local politicians. Among them is state Rep. Frank Dermody, D-Oakmont, who is the head of the Allegheny County Democratic Delegation.
"To me, it sounded too good to be true but it's something we ought to look into," Dermody said. "An $80,000 investment to save $100 million makes a lot of sense to me."
Dermody attended the news conference along with state Rep.'s Don Walko, D-North Side, and Nicholas Kotik, D-Robinson.
SFMG's proposal calls for a 657,000 square foot arena, built underground, with more than 18,000 seats and 70 luxury suites.
SFMG has not selected a site for the arena. Dermody suggested SFMG consider looking for sites in the Strip District near the David L. Lawrence Convention Center.
Above ground, the arena would be covered with a shallow pool of water. A rendering of the facility also shows a restaurant and giant video screen built above the water.
No other NHL arena is built below ground.
SFMG intends to remain heavily involved in running the arena once it's built, largely due to requirements from investment firms. Essentially, if SFMG remains involved, there's more incentive for it to run a successful project, Shapiro said.
"If we pay for it, we'll make sure it's profitable," he said.
It's possible SFMG could ask for up to $7 million to help alter local roads and infrastructure to accommodate the new arena.
Shapiro estimates the study will take three months to complete, once started. After, SFMG could build the arena within two years.
The arena also would host other events, including rodeo, music concerts, ice shows and motorcross.
