Penguins declare impasse in new arena negotiations with city, state

~ The team said it will actively pursue relocation.

PITTSBURGH -- The Penguins moved a step closer to leaving Pittsburgh, declaring an impasse Monday in their new arena negotiations with state and local leaders and saying they will actively pursue relocation.

The breakdown in arena talks came only three days after Gov. Ed Rendell said he felt an agreement was close. It also increases the possibility the Penguins will be playing in Kansas City next season.

"We have made a single-minded effort to bring this new arena to a successful conclusion and keep the team in Pittsburgh," owners Mario Lemieux and Ron Burkle said in a letter to Rendell and local government officials. "... Our good-faith efforts have not produced a deal, however, and have only added more anxiety to what we thought at best was a risky proposition for us moving forward."

In the letter, Lemieux and Burkle put the blame for the impasse on government officials, arguing they agreed to pay $120 million over 30 years to help build a $290 million arena and cover construction cost overruns, yet still have not reached a deal.

NHL commissioner Gary Bettman became involved in the talks several weeks ago, but also has been unable to finalize an agreement.

The Penguins had an agreement with Isle of Capri Casinos to build the arena at no expense to the team or taxpayers in exchange for a license to build a Pittsburgh slots casino, but a state board in December chose a competing bid.

Kansas City has offered its nearly completed Sprint Center to the Penguins rent-free. The Penguins would also gain revenue from development projects around the arena.

However, the Penguins would be leaving one of the NHL's strongest U.S. markets for a smaller one that lost an NHL team in 1976 after only two seasons because of lack of support.