Should Pittsburgh Penguins Receive Funds for Arena?
The potential funding for a new arena for the Pittsburgh Penguins in light of economic benefits, costs, risks, and opportunities. Analyzing different alternatives and their impacts on economic, political, and social aspects."
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Presentation Transcript
Should the Pittsburgh Penguins receive funds to build a new arena? Chris Farrell Rick Malsch Fall, 2002
Alternatives Build a new arena Get state, local and investor funding to demolish current arena and build a new one ($270 million) Refurbish current arena Gain local funding to make improvements on current arena (approx. $5 million) Stay with current arena
Introduction New arenas gross up to 50% more revenue than old arenas The Mellon Arena is the oldest and second smallest in the NHL The Lemieux Group purchased the team in 1999 with understanding that a new arena would be built
Model Toplevel BOCR Control Criteria Subcriteria Alternatives
Benefits Criteria Economic Revenues (Team and Surrounding Businesses) Political Voter Support Social Competitive Advantage Community Morale
Costs Criteria Economic Funding (State, Local (RAD), Investor) Political Lobbying (Administrative Costs) Protests Social Taxes (Could be up to 1% per tax-payer) Traffic Congestion
Opportunities Criteria Economic Pittsburgh Economy Additional Income Streams (addt l venues, restaurants, housing develop, public park) Political Perception of Government Officials ( The Mayor that Saved/Killed Pittsburgh ) Social Housing and Employment
Risks Criteria Economic Revenue (or lack thereof) Political Actual Votes in Future Elections Social Investor Confidence Other state projects
Priorities Benefits Costs Alternatives Total Normal Ideal Ranking Alternatives Total Normal Ideal Ranking Build a new arena 0.3856 0.3856 1.0000 1 Build a new arena 0.5643 0.5643 1.0000 1 Refurbish current arena 0.2566 0.2566 0.6655 3 Refurbish current arena 0.2270 0.2270 0.4023 2 Stay with current arena 0.3578 0.3578 0.9281 2 Stay with current arena 0.2086 0.2086 0.3696 3 Opportunities Risks Alternatives Total Normal Ideal Ranking Alternatives Total Normal Ideal Ranking Build a new arena 0.6604 0.6604 1.0000 1 Build a new arena 0.2545 0.2545 0.5924 3 Refurbish current arena 0.1867 0.1867 0.2827 2 Refurbish current arena 0.3159 0.3159 0.7354 2 Stay with current arena 0.1529 0.1529 0.2315 3 Stay with current arena 0.4296 0.4296 1.0000 1
Results Alternatives Total Normal Ideal Ranking Build a new arena 0.6537 0.3608 1.0000 1 Refurbish current arena 0.2965 0.8219 3 0.5373 Stay with current arena 0.6209 0.9499 2 0.3427
