After a year-long study, a Minneapolis consulting firm on Wednesday gave Lincoln civic leaders five potential downtown sites for a new 12,000-seat, $50 million sports and entertainment arena.

John Kaatz, a partner with Conventions, Sports & Leisure International, did not rank the locations but said the most suitable sites were in or near the Haymarket District, a popular restaurant, shopping and entertainment venue.

Speaking via a telephone conference call, Kaatz said the "optimum" site for a new arena would be in a four-block area from R to T streets and Seventh to Ninth streets. His firm said it would cost in excess of $50 million — and acquiring the land would be extra.

Kaatz said the site is ideal because no streets would have to be closed, it is close to the University of Nebraska-Lincoln campus and plenty of parking exists nearby.

But he also listed some negatives: the railroad tracks next door and relocating the main post office which sits on most of the four blocks now, for example.

The other sites also have potential problems, Kaatz said. Big and small business would have to be relocated, streets would need to be closed, and some are too far from parking facilities, lodging or the Haymarket area where people like to dine and shop.

But the problems did not seem insurmountable to some attending the Wednesday press conference at the Chamber of Commerce office. Also present were members of Community Consensus Committee, the group that worked with the consulting firm on the $100,000 study.

"We really intend this to be the first step in a multi-step process to develop new facilities in Lincoln," Chamber president Jim Fram said in an interview. He said the next step would be to do an economic impact analysis study.

Said Polly McMullen, president of the Downtown Lincoln Association: "A new downtown arena would propel Lincoln into a new competitive level in attracting new sports, convention and entertainment business."

Kaatz said the goal of the study was to answer some fundamental questions about what type of convention/arena/meeting space Lincoln needs and what the demand and costs would be. Lincoln is in a tough regional market, he said, because Omaha and Council Bluffs have opened new arena and convention centers in recent years.

He told civic leaders Lincoln could not compete successfully with Omaha's Qwest Center for national headliner events. But it can compete with Council Bluffs and smaller arenas in Sioux City, Iowa, Overland Park, Kan., and Sioux Falls, S.D.

Kaatz said Lincoln is missing a venue that can not only attract larger state-type events but also host several events under one roof. He said Pershing Auditorium is outdated and significantly below industry standards.

"It's lost its market position. It's lost its ability to attract major concert events," Kaatz said. "Omaha and Council Bluffs pulled away the market from Lincoln."

The Bob Devaney Sports Center, Kaatz said, also has limitations because it is heavily used by the university, which precludes booking many concert and entertainment events. He said crowds are getting bigger and there's less and less floor space for some events, such as high-school wrestling tournaments.

Kaatz said a new arena would solve many of these problems and give Lincoln a competitive edge to attract many regional, state and a handful of national events.

A convention center could be built in Lincoln, Kaatz said, but he cautioned such an undertaking should be done in conjunction with some type of hotel project. The study said a convention center would cost between $7 million and $9 million.

Kaatz said building a standalone arena or convention center should not be done with taxpayer dollars but should be part of a public-private partnership. He said that typically, publicly owned convention centers operate at a deficit of between several hundred thousand dollars to more than $1 million annually.

He said partnering with the private business — like a large hotel chain — could make a project more cost-effective.

The Lancaster County Agricultural Society recently announced plans to build a new arena and stalling barn. The space would add about 300,000 square feet to the society's Lancaster County Event Center in northeast Lincoln.

Kaatz said he thinks the Event Center and the new arena would not be competing for the same type of events. Likewise, he said, a convention center for State Fair Park, which has been mulled around, would be too far away from downtown attractions. He also didn't believe the cost of building a convention at State Fair Park would be worth the benefit.

The study recommends UNL team with the private sector and the city to fund the new arena. Other possible revenue sources include raising the lodging tax to 4 percent, which would yield about $1 million annually, and increasing taxes on liquor, entertainment and restaurants.

Fram said he would like to see an arena and convention center built on one site, if possible.

"I don't think the taxpayers want to build a hotel with their money," he said.

Reach Algis J. Laukaitis at 473-7243 or alaukaitis@journalstar.com.

The five suggested areas

* A four-block area from R to T streets and Seventh to Ninth streets.

* A four-block area from Seventh to Ninth streets and L to N streets.

* A four-block area from Ninth to 11th streets and L to N streets.

* A four-block area from 15th to 17th streets and O to M streets.

* A four-block area from 17th to 19th streets and O to M streets.