Central to Dr. McMullen's desire for a new arena is his belief that Continental Arena's 29 luxury suites are insufficient, failing to generate the revenues other teams receive. He has repeatedly lamented that Continental Arena offers few of the amenities or revenue-making opportunities found in such new arenas as the MCI Center in Washington.

''I'm tired of being second rate,'' he said. ''New Jersey deserves excellence.'' He added: ''You go to a new city, and they give them a new arena. I was on an expansion committee and sat in amazement at what they offered.''

Dr. McMullen said the arena would be financed partly through revenues from luxury suites and club seats. ''I've talked with Chase Bank, and they've indicated real interest,'' he said.

But even in private projects, state or local governments often agree to pay the costs of certain improvements to roads and utilities, like sewers and water lines. ''We haven't looked at what the expectation is on the state's participation in infrastructure improvements,'' Governor Whitman said.

Usually an arena needs two main tenants, a hockey team and a basketball team. And Dr. McMullen said yesterday that he had talked informally about his new arena with Henry Taub, one of the owners of the Nets basketball team, also a tenant of Continental arena.

The Devils nearly left New Jersey in 1995. During acrimonious discussions with the sports authority that eventually led to a new lease, Dr. McMullen talked to Nashville officials about moving there as part of a package that would have included a new arena.

The additional revenues provided in the Continental lease do not approach the riches promised by Nashville, including a $20 million relocation fee and 97.5 percent of luxury suite revenues. In the end, Dr. McMullen, who has a doctorate in engineering, chose to remain in New Jersey. He runs his shipbuilding business from Secaucus and lives in Montclair.