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Old 06-29-2007, 10:52 AM   #266
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Pa. House OKs key arena fund
Friday, June 29, 2007

By Tom Barnes, Post-Gazette Harrisburg Bureau

HARRISBURG -- The state House took a big step yesterday toward helping to fund a new arena in Pittsburgh for the Penguins and other tenants.

Legislators voted 121-77 to authorize a new $1.6 billion fund for capital projects, called the Pennsylvania Gaming, Economic Development and Tourism Fund. It will supply $7.5 million a year for up to 30 years to pay for the construction of the arena.

The money would be generated from a 5 percent tax on slot machine revenue and would form a key part of the financing for the proposed $300 million structure.

House Bill 1631, which still lacks Senate approval, authorizes an additional $500,000 per year for up to 30 years for a "community development fund for infrastructure, construction and redevelopment projects" near the proposed arena.

That money could go for development in the lower Hill District, adjacent to the new arena. Hill officials, including state Rep. Jake Wheatley, have insisted on being involved in the overall development of the lower Hill, including the land where Mellon Arena is. It likely will be razed once the new arena is completed.

The total gaming fund authorization for the arena and related redevelopment is thus $8 million a year for up to 30 years, or a total of $240 million.

The new gaming development fund is tied to Act 71 of 2004, the law legalizing slots casinos, which says that 5 percent of the gross gaming revenue will go into the fund. Once all 14 slots parlors are up and running, estimates are that $150 million a year will pour into the development fund.

The first two projects to receive money will be the new multipurpose arena for the Penguins and a major expansion of the convention center in Philadelphia, which is slated to get $880 million over 30 years.

Other Pittsburgh projects that could ultimately be funded include new buildings or debt reduction at Pittsburgh International Airport, a hotel at the David L. Lawrence Convention Center and paying off the debt of the Urban Redevelopment Authority.

The complete list of county projects can be viewed by calling up HB1631 at

So far the fund has received only $20.4 million from slots revenue, with another $54.5 million expected by June 2008. But eventually the funding should be $150 million per year.

Gov. Ed Rendell wants action on the bill completed before the Legislature recesses for the summer.


(Bureau Chief Tom Barnes can be reached at or 1-717-787-4254. )
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