PITTSBURGH -- The Pittsburgh Penguins said Wednesday that they are partnering with a gaming company in an effort to build a replacement for Mellon Arena -- with no public money -- and develop surrounding neighborhoods.

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Under the agreement, if Isle of Capri Casinos Inc. is awarded a license to operate a slot machine parlor in Pittsburgh, it will pay for a $290 million arena that would be located across the street from Mellon Arena.

As part of the proposal, Nationwide Realty Investors would develop the 50-acre site in Uptown and the upper Hill District where Mellon Arena now stands. Shops, housing and office buildings would be included in the project.

The total cost of the project, including the arena, is estimated at about $1 billion.

The deal calls for the Penguins to receive no gaming revenues, and Isle of Capri would turn the new arena over to the city-county Sports and Exhibition Authority after it is built.

There is expected to be strong competition for Pittsburgh's casino license, which will be awarded by the state gaming commission. Bids must be submitted by Dec. 28.

Last week, owner-player Mario Lemieux said time was running out for an arena to be built before the 2007 expiration date on the Penguins' lease at Mellon Arena, the smallest and oldest building in the NHL.