Lemieux and Burkle Thoughts (Pittsburgh: tenants, price, suites)

[Rocket88]

Now that everybody is aware that Mario Lemieux and Billionaire Ron Burkle want to sell the Penguins, I would like to add my thoughts on possible reasons why.
The Penguins are worth over $600 million. They have sold out every game for the past several years. They sell a ton of merchandise. They have two of the top players in the world in Crosby and Malkin. The team is a cash cow. Why sell?
I personally believe that any deal will have the new owners take over the obligation to develop the twenty-eight acres of the Lower Hill. This agreement with the city was constructed in 2010. The team had to an develop an average of 2.8 acres per year over a ten year period and have the entire site developed or face stiff fines. I guess their development of the Cambria Suites and the Consol Energy Center itself has kept the fines in check so far, depending on when the terms began. There also is proposed housing on the upper lots and that crappy rendering for U.S. Steel. I feel that Lemieux and Burkle just may not feel confident in the way the search for prospective tenants for the site is going. The housing aspect was a drawn out fight with Hill Leaders, and the U.S. Steel proposal was met with a lot of criticism. I just feel that they want to wash their hands of this site so they won't be fined or be the scapegoats and further delays in development will be blamed on the sale. Just my two cents.

[tclifton]

They've both indicated that they'll still have an ownership stake in the team. They're not looking to sell 100% of their shares.

[UKyank]

Makes sense to me to sell when you're valuation is at a high point.

I wouldn't be too worried if I was the Penguins about meeting development deadlines - the city has indicated they aren't serious about enforcing any such contracts (see the Pittsburgh Steelers as precedent).

[Rocket88]

Originally Posted by tclifton

They've both indicated that they'll still have an ownership stake in the team. They're not looking to sell 100% of their shares.

True, but will they be the main figures and the ones who will have to answer to questions on development or lack thereof if it comes to that? Or are they wanting to sell to someone they think can get the ball rolling on developing the site along with successfully operating an NHL franchise?
I am just a bit concerned because I have seen no concrete renderings for most of this site compared to other major projects around town, just conceptual ones. Surely this 28 acre site will be a key factor in any sale.

[Rocket88]

Originally Posted by UKyank

Makes sense to me to sell when you're valuation is at a high point.

I wouldn't be too worried if I was the Penguins about meeting development deadlines - the city has indicated they aren't serious about enforcing any such contracts (see the Pittsburgh Steelers as precedent).

Very true. That concerns me.

[guy2073]

Lemieux probably has too much of his wealth tied up in hockey assets, and I am guessing burkle does not want to be the majority owner, I think it is good for him to cash out some of his equity.

[stburr91]

Originally Posted by Rocket88

True, but will they be the main figures and the ones who will have to answer to questions on development or lack thereof if it comes to that? Or are they wanting to sell to someone they think can get the ball rolling on developing the site along with successfully operating an NHL franchise?
I am just a bit concerned because I have seen no concrete renderings for most of this site compared to other major projects around town, just conceptual ones. Surely this 28 acre site will be a key factor in any sale.

It's not like people are beating down the door to be a part of this site development. The last population estimates has the city losing people, so developing these large sites within the city is going to be slow process. The speed of this site's development really shows the lack of demand in the area. Heck, the infrastructure work has hardly even been started yet, so you can't blame the Penguins for the lack of progress.

[erieguy]

Nothing to do with the site development. Burkle, unless something has changed, doesn't want out at all. The team is hot, the price has peaked, it's all about the $$$.

As long as Nutting has no stake in it, cash in the cow.

[safak]

you can see the hockey bubble here bursting a mile away, its the right time to cash out, if not already a bit late.

[sskink]

Originally Posted by safak

you can see the hockey bubble here bursting a mile away, its the right time to cash out, if not already a bit late.

Agree. It's gonna get nasty next year with the Blackhawks having 3 cups in 6 years while Sid/Geno still only have one - and that one is a fading memory.