The agreement the Penguins have with Isle of Capri Casinos Inc. to fund a new arena prevents the team from discussing alternatives with state and local leaders, Gov. Ed Rendell said yesterday.

During an appearance in Pittsburgh, Mr. Rendell said he, Allegheny County Chief Executive Dan Onorato and Mayor Bob O'Connor have been frustrated in their efforts to discuss an alternative because of that agreement.

"That leaves us at a serious disadvantage because we want to try to develop a Plan B to save the Penguins and to build the arena," Mr. Rendell said. "But you can't negotiate with yourself and obviously there has to be participation by the team."

Penguins consultant David Morehouse confirmed that the agreement with Isle of Capri prevents the team from discussing anything but the slot machine plan. The casino operator is pledging to provide $290 million for an arena as part of its bid for the state gaming license.

Mr. Morehouse said local and state politicians have had plenty of time to discuss other plans.

"For years and years we were told there wasn't any public money for a new arena. So we answered that challenge by creating a plan that pays for the construction of an arena completely with private funds. And now the governor wants to put the burden of paying for an arena on the backs of the taxpayers," Mr. Morehouse said.

"The real question is why the governor and local leaders can't get behind a plan that calls for $290 million in private funds to build an arena that would be given as a gift to the region."

Mr. Rendell said he's interested in developing a backup plan, one that likely would involve some level of public subsidy, because there is no guarantee that Isle of Capri will win the license.

It is competing against two others for the sole Pittsburgh license -- Forest City Enterprises, in partnership with Harrah's Entertainment, for a casino at Station Square and Detroit businessman Don Barden for a venue on the North Shore.