PITTSBURGH (AP) - The Penguins moved a step closer to leaving Pittsburgh, declaring on Monday an impasse 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.

"We can do no more," Lemieux, the longtime Penguins star, and Burkle said in the letter.

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.

On Jan. 4, the team, state, city and Allegheny County began negotiating an alternate arena funding plan. At the time, government officials were asking for the team to contribute about $4.1 million per year, but lowered that to $2.8 million during the first round of negotiations.

During subsequent talks, the Penguins agreed to up that annual contribution to $3.6 million, plus $400,000 in operating expenses, after the state said there was a funding shortfall. However, the two sides still could not close a deal.

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. The Penguins' home attendance and local TV ratings are among the strongest of the 24 United States-based franchises.

When Lemieux's group bought the team in federal bankruptcy court in 1999, the Hall of Fame player said he did so to ensure the team's existence in Pittsburgh.

The Penguins' hardball negotiating stance comes with the team contending for a playoff spot for the first time in six years. A youthful team led by NHL scoring leader Sidney Crosby and rookies Evgeni Malkin and Jordan Staal has become one of the league's prime attendance draws.

At home, the Penguins are playing to nearly 96 percent of arena capacity for the season. All of their remaining nine home games are expected to attract standing-room-only crowds.

The Penguins also have begun selling season tickets for the 2007-08 season in Pittsburgh, even though they have not agreed to play there another season.

"They're tough negotiators," Rendell said.

bad idea, I hope it will never happen
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PITTSBURGH -- Penguins owner Ron Burkle traveled to Las Vegas on Wednesday to meet with the mayor and discuss the possibility of relocating the team there.
Burkle, who lives in Los Angeles, led a delegation in talks with Las Vegas Mayor Oscar B. Goodman, according to Penguins spokesman Tom McMillan.

Meanwhile, Burkle and co-owner Mario Lemieux all prepared to meet with state, county and local officials on Thursday in Philadelphia to try to resolve differences over plans for a new arena in Pittsburgh.

Elena Owens, a spokeswoman for Goodman, confirmed the meeting with Penguins officials and said, "they had a very pleasant conversation." She declined to elaborate.

The Penguins issued a letter Monday saying the team planned to actively pursue relocation. It blamed government officials for failing to reach a deal to build a new arena in Pittsburgh.

In the letter, Lemieux and Burkle said negotiations had stalled, even though the team agreed to pay $120 million over 30 years toward a new $290 million arena and to cover any cost overruns.

Gov. Ed Rendell said Wednesday he was optimistic the team would remain in Pittsburgh. A day earlier, Rendell's office said the governor has put "an exceptionally attractive offer on the table." He later said officials would ask the NHL to intervene if the team didn't accept the deal.

Officials in Kansas City have offered the Penguins free rent and half of all revenues if they agree to play in the soon-to-be-completed $262 million Sprint Center.

The Penguins' lease at 46-year-old Mellon Arena, the oldest facility in the league, expires June 30. The Penguins have repeatedly said they may move, or sell the team to a buyer who would relocate the franchise if an arena deal isn't in place by then.