First Mariner Arena, Baltimore's largest indoor entertainment venue, has "served its useful life," and the city must build another before it starts losing events, a new report warns.

Though the 45-year-old arena has recently boasted such draws as the Rolling Stones and the Miss USA pageant, an analysis released yesterday suggests that a more modern setting would attract minor league sports teams and bolster the appeal of downtown's west side.

Rejecting the idea of repairing the building's aging systems, which could cost nearly $60 million, the report commissioned by the Maryland Stadium Authority recommends that Baltimore demolish the arena and build a bigger one on the same site or elsewhere.

"The report clearly indicates the current facility is beyond its useful life," said Donald C. Fry, president of the Greater Baltimore Committee, one of a number of city and state organizations that sponsored the study. "We have to take that next step and make those difficult decisions."

By recommending that the replacement arena seat 15,000 to 16,000, adding no more than a few thousand seats to the current capacity, the report assumes that Baltimore will never lure a major league hockey or basketball franchise, either of which would require 18,000 to 20,000 seats.

A new venue could attract arena football and minor league hockey, the analysis says, bring more than 200 new jobs and generate about $1 million in additional tax revenue. Officials say the private sector would have to bear the brunt of the estimated $162 million construction cost.

In the next month or two, Baltimore Development Corp. will begin seeking developers interested in the project.

The city would consider giving up ownership of the arena, said BDC President M.J. "Jay" Brodie.

"We would like to see what kind of financing ideas there are, hopefully creative ones," Brodie said. "We're looking for some combination of private and public [financing], and that would include various options of who owns what."

Built in 1962 as the Baltimore Civic Center, 1st Mariner Arena is owned by the city and managed by SMG.

The Beatles played there shortly after it opened, and Elvis Presley performed there in 1977, the year he died. More recently, the arena drew the Rolling Stones and Christina Aguilera, but it typically attracts family-oriented events such as Disney ice shows, the circus and Wiggles Live, scheduled for August.

The arena was last renovated more than 20 years ago, and its shortcomings have long rankled city leaders. Brodie called it a miracle that the arena books as many events as it does, with its run-down mechanical and electric systems, poor sight lines, tight corridors and bathroom shortage.

In 1998, Mayor Kurt L. Schmoke hired a consultant to study locations for a 20,000-seat venue, hoping to attract more professional sports teams to the city. The proposal went nowhere.

The city also proposed a new arena when the region was trying to land the 2012 Olympics.

Weeks ago, Edwin F. Hale Sr., whose professional soccer team, the Baltimore Blast, anchors the arena, said he would like to build his team a new venue in Southeast Baltimore.

Advocates for downtown, including the Downtown Partnership and Westside Renaissance, want the arena to stay downtown. Hale, who is the chairman and chief executive officer of 1st Mariner Bank and bought the arena's naming rights four years ago, has called that idea "laughable."

He also has said that it would be a mistake to replace the arena with another one too small for National Hockey League or National Basketball Association games. Hale did not return phone messages yesterday.

Baltimore has no chance for major league hockey or basketball, Stadium Authority officials said yesterday. "It's just not there," said Chairman Robert L. McKinney. "The market can't absorb it when there's a team 40 miles down the road."

Chicago-based sports marketing consultant Marc Ganis agreed that it would be "almost impossible" for Baltimore to attract an NBA or NHL franchise.