BY: Gerry Cantlon, Howlings
HARTFORD, CT – The long and meandering road known as, “The XL Center Reboot” has been both a Greek comedy and a Greek tragedy as well, but the light at the end of the tunnel seems to be in sight. But at the same time, we have been down this road before.
Executive Director, Mike Freimuth, who has sounded dire warnings in the past few years, but this one seems to have more urgency than past pronouncements as the calendar gets ready to flip toward 2020.
The road ahead is narrow, and it isn’t filled with gold and honey, but a few thorn bushes and potholes still lie ahead a modern 21st century XL Center to emerge.
“Of course I’m frustrated, but we hope we can get to a happy place. We’ve started this about six or seven years, ago. We invested $35-40 million dollars, and at the beginning, we thought we could get ten years. We didn’t think we would go ten, but here we are entering seven years.
“We are getting to the point where some very difficult decisions have to be made and if it’s a no, we’re going to have to do it now. It’s gonna be a legislative call on this Capital projects are still in limbo. I really think by the end of the session (in June) something will be done, but it will have to wrestled through the legislative process,” Freimuth remarked.
There has been radio silence over the past two months while behind the scenes, many efforts are currently underway on multiple fronts to finally push the project over the goal line.
As yet another market study was started, a critical step for a final push that will begin in earnest after the new year.
One thing is clear, as the CRDA pursues taking another crack at creating a public-private financial component, there will be a combination, but make no mistake, public money will be a part of the equation whether it’s a 60/40 or 70/30 split or some other ratio.
“There is gonna be a public component. We are working toward getting private capital involved. What percentage or blend it will be, I have no idea at this point.
“I can say there is no way it will be 100% private. The math is simply not there for it. Some of the controls, operational components and the public rights under the public domain are very sensitive issues in any future ownership partnership arrangement.
“There will be a level of public engagement. What the perfect blend will be is, I don’t know. All of this is subject to future negotiations, but those three elements are all going to be a part of this and all are on the table.”
When asked if the needle has moved in the legislature on bonding with significant push back from the big cities to allocating any more money for the XL?
“That hasn’t changed a whole lot, but I hope with this work we’re doing now, we can hopefully change that dynamic.”
The market study that is underway, the fourth done in the past seven years carries a significant piece of the future direction that is to be undertaken to bring finality to this process is to be ready by January.
“As we speak, a lot of work is being done to prepare this report. We have several dynamics to look at such as UCONN going back to the Big East in basketball.
“The report is a big part of several things we are analyzing for the re-boot.
“We have hired an outside financial advisor and as part of securing private capital, this will be our walking papers to go to boards in seeking investors and attract the necessary capital investment that is required.
“This process isn’t going to be done by hanging out a shingle in a newspaper or a website. Having this info is for a direct appeal. This could allow us to open the door to talk to an array of investment groups.”
The thorniest issue that is still unresolved is that of the atrium and the long-standing, two-and-a-half plus negotiations with Northland Corporation, the tile owner to the property, and the one-time manager to the XL Center and that tract has taken a new turn.
“The Governors office has reached out and has begun talking to Northland for about a month. There is nothing new to report on that front.”
One thing Freimuth did confirm was that the CRDA did offer $4.5 million to Northland and subsequently rejected it.
The eminent domain arrow stays in his CRDA shoulder bag as Governor Lamont, Majority Leader Joe Aresimowicz (D-Berlin), and minority leader Len Fasano (R-North Haven), are still not disposed of for him to pull the bow back and let it fly.
Freimuth declined to name Northland’s asking price but reiterated the process they have been working under.
“They have a much higher number than we believe is justifiable. We have done multiple appraisals, made multiple offers and we haven’t come to terms and that where we sit,” Freimuth, with a tone of annoyance, said that he still is discussing this issue.
In his public-private dilemma, he and the building’s management company, Spectra, have been in what he calls discussions, not negotiations.
“One element that’s out there is whether a private investor will want Spectra or not? I have no clarity on that issue because it will affect operations and staffing, which presents another set of issues, such as who will handle the facility (day-to-day)? At what level will this be at? What is the budgetary requirement?”
Cantlon’s Corner has learned from a variety of sources that the figure is somewhere near $10 million, but that the appraisal includes the entire area, not just the atrium.
Spectra has been operating at an even lower figure than previously known, which had been $600 million and that has affected the marketing efforts of the tenants.
“It’s more like $460 million now, and we have weaned back on the marketing because of the budget. We have a very tight balance between UCONN and the Wolf Pack. The budgets have not changed much and that runs the entire state budget.”
Declining attendance last year is a product of bad teams, and the trimming of marketing. He acknowledges it could be better.
“We certainly would like better attendance at the XL and Rentschler. Certainly, there’s a combination of factors involved. There has been a slight uptick we hope continues.”
Looking ahead, recent developments regarding MSG and its ownership structure regarding its minor sports properties. There was an announcement two weeks ago that the MSG Board approved a spin-off of those entities into some other yet to be announced new umbrella, but with SEC filings and approval now done this long-awaited shift is now underway that is a year-and-a-half in the making.
Freimuth was very cautious in answering about the how the Wolf Pack could be affected.
“I’ve heard about it. The CRDA hasn’t been directly contacted about it,” Freimuth said very succinctly.
With a lease renewal date coming up in just over a month for the Wolf Pack for the 2020-21 season, the first of three one-year options for MSG, nothing has yet to be done.
“We haven’t heard yet from MSG regarding the renewal, but we still have till the end of the year,” Freimuth said of the Wolf Pack concluding the second year of a five-year deal effective in June.
The very much needed new chiller system will be installed this summer after being shelved for over a year.
“Our construction team got bogged down at Dillon (the stadium home of the USL Hartford Athletic). In fact, we are preparing our bid packages now for an RFP that will go out after the new year,” Freimuth said even with an unusual June Cirque de Soleil ice show.
“I think we can still do things and build around it. We haven’t had ice down in the spring the past few years, but we can work around things for this to get completed,” said Freimuth who has had the project money for the new chiller system and atrium acquisition for nearly two years.
The XL Center remains open for business, but it seems the next seven months will be the last chance to secure a future as all around the XL, much work is needed to revitalize the downtown core, It’s either underway or plans are being finalized to overhaul certain sections nearby.
Only time and the state legislature have the answer to what form the XL Center will or will not be part of the future of downtown Hartford.
