CANTLON’S CORNER: XL CENTER FUTURE FRONT AND CENTER 

BY: Gerry Cantlon, Howlings

HARTFORD, CT – The puck is now officially in the Connecticut legislature’s corner.

Last week, during his State-of-the-State address, Governor Ned Lamont officially requested that the State Legislature grant him a bonding package of $55 million over two years ($27.5M/per) for the XL Center as part of the unveiling of his $22.5 billion dollar state budget.

The Finance Committee received a request to place the bonding issue on the agenda for review. The request came from four political heavyweights, House Majority leader Matt Ritter (D-Hartford), Speaker of the House Joe Aresimowicz (D-Berlin), Senate Majority leader Bob Duff (D-Norwalk, Darien) and President Pro Tempore Senator Martin Looney (D-New Haven).

CRDA Executive Director, Mike Freimuth, saw this move by the Governor as the culmination of an eight-month protracted process that’s had many starts, stops, pauses, not to mention a fair share of acrimony, to get to this point.

“We have three pretty powerful people behind it; the Governor, Minority Speaker Ritter, and Rep. John Fonfara (D-Hartford, Wethersfield who chairs the Finance committee) and several other prominent legislators. But that being said, I am cautiously optimistic this will get through. There is a long process to still go through. It’s hard to predict.”

The bonding issue must first pass the Finance committee, and it has, and then must be approved by the General Assembly before it officially goes to the Bond Commission.

The General Assembly has been very reluctant as a whole, especially the delegations from the big cities, namely New Haven, Waterbury, New London, Bridgeport, and Stamford, to allocate any public money for the XL Center considering its age and poor financial performance over the years.

“I think it’s a tough sell; always has been. We have the votes to pass for the authorization, I think, and that could get done in 60 days, but the bonding is going to take a bit more time. There are a lot more questions that will be asked of us in this process as it plays out. We have to rationalize the equation to the dollars being put in and the dollars generated both with respect to taxes and to revenue generated inside the building.”

The Governor controls the agenda and priorities of the Bond Commission.

Last year, the $60 million dollar proposal to fix the crumbling XL Center was never even considered.

In the last seven years, proposals to renovate and update the XL Center started with $250 million and was then revised to $100 million. Both proposals were quashed and never received approval during the Malloy Administration.

Ritter, in an interview with WNPR, seemed confident that in the next sixty days this long-stalled project will come to life.

“I think it’s an issue of getting this done quickly, that’s the biggest issue because if it languishes for four-or-five more years, you won’t [have] a building that can be used anymore. We have to get this done very, very quickly, and I think we will.”

The fact remains, however, that the project is already five years behind schedule.

The dollar number still falls far short of the overall goal of the new Lower Bowl Strategy requiring the desperately needed $100 million to overhaul the aging building as the marketplace surpasses Hartford more every day both regionally and nationally.

New buildings are being built and older ones are receiving necessary retro-fits to remain viable as entertainment assets in the marketplace.

“We have to get this thing started because once we do, we have to then look to renegotiate contracts with UCONN and MSG because the revenue stream will change,” commented Freimuth.

The whole equation hinges on a whole set of factors, not just one or two. Hence, the complexity involved requires adroit political and financial maneuvering.

Currently, the XL Center loses roughly $1.5 to $2 million per year with the state taking the brunt of the shortfall.

Next week, the CRDA is set to unveil the fifth commissioned study by CSL International about the economic viability of the XL Center in the marketplace.

This study was required by the Lamont Administration to acquire its support for the bonding and requires a public-private financing component to fulfill the other half of the economic equation and get the ball moving on a project long past overdue.

The question remains to be fully known if the study has put the CRDA in a position to start making pitches in boardrooms about the building.

Freimuth said, “It’s still too early (to know) until we release the study next Thursday presenting it fully before the (CRDA) board. Part of doing all of this is what will premium seating be, and other price points. I think we’ll have better concessions and better revenue and that will factor in those future negotiations with UCONN and MSG. All of this will be simultaneous with Big East basketball coming back.”

This all comes amid a mixed bag of new financial numbers at the XL Center with team’s operators in the building in the red, while concessions and the all-important per cap from food and beverage sales are in the black.

The numbers are shocking in some cases.

In December, the end of the fiscal year, the Hartford Wolf Pack is averaging a draw of only 2,800 fans per event. UCONN hockey fares even worse with just 2,100 fans per game.

“Those were December numbers. The January numbers were a much better month, and are trending upwards for both teams. They’re above those numbers right now. We hope with both UCONN hockey and the Wolf Pack continuing to play well those numbers will go up. Playoffs traditionally don’t draw well because you don’t know what the calendar is, but you hope a good run helps out.”

The AHL attendance figures list the Wolf Pack at 25th out of the league’s 31 teams with an average attendance of 3,828 per game.

In their last year in the AAC conference before returning to the Big East, UConn basketball is not drawing very well either. The men’s side though had two big games with Wichita State and Baylor.

Hockey operations are running even with the budget, but on the whole, as of the third quarter, the XL Center was set to begin was operating with a $275K budget shortfall or, “unfavorable to the budget,” in accounting parlance.

These numbers will accompany any proposal to a potential private partnership and could sink any possibility before any serious talks even begin.

“It’s a bit too early for that. We’ll be releasing the study and then we can examine what the best direction to move forward on is to rebuild the arena. There is going to be public dollars however way you slice it. How we get there? That is what we’re working on (with the bonding request) and its why we had the study done.”

The atrium portion of the building is still owned by Northland Corporation and it’s acquisition remains at a stalemate even after nearly three years of negotiation. There is a wide chasm in pricing that has not been bridged with the Northland, the actual property’s titleholder and the CRDA.

In the last go-round, Northland was seeking as much $10M to the proposed $4.5M proffered by the CRDA. That offer was rejected.

Eminent domain still hangs in the air and it’s unknown if the CRDA will choose that option and pull the trigger on it this year.

There could restraints on the CRDA from using that option at the request of the Governor, Speaker of the House Aresimowicz, and/or Minority Leader, Len Fasano (R-North Haven).

”Nobody wants to do it, but we have been begged off on it. It has been a topic of conversation there have been multiple discussions. Everybody is aware, the atrium is critical to this whole process in the rebuild of the building. We’re gonna have to come to some kind of solution to that,“ said Freimuth, who was clearly exasperated by the topic.

If the bond package passes as currently written, the question remains if the atrium issue will have to be resolved very shortly thereafter.

“Absolutely, at that point, to go forward, the issue will have to be addressed very quickly.”

In that same WNPR interview Chris Davis (R-East Windsor, Ellington) offered an alternative plan that others have offered and that’s to build a smaller arena near Dunkin’ Donuts Ballpark and create a sports and entertainment zone at the beginning of the North End of Hartford.

The current XL Center location, setup, and bonding proposal is not something Davis, a bond committee member, has said he would not support.

“We keep hearing that there are talks of potentially doing private partnerships, but I fear that we’d be throwing this money at it, basically putting the cart before the horse,” Davis said.

Is the possibility of the smaller arena feasible, or in any form of preliminary discussions? Possibly a Plan B, or is it more of a pie-in-the-sky theory?

“Nothing at all,” said Freimuth succinctly.

Part of the backdrop in the state sports landscape is that UCONN athletics is running a $42M deficit. Add the public announcement of the gargantuan financial sinkhole Rentschler Field is in it’s bleeding enormous financial red ink at the clip of $1M by the conclusion of this fiscal year, the largest loss since the stadium opened in 2003.

The realization of that stand-alone issue and its long term viability, and with UCONN football now having to enter as an Independent Division I schedule with an average attendance of just 9,675 per game (in a 40,000 seat stadium) could have an adverse effect on the XL Center future discussions.

Toss in the disaster of the rebuild of Dillon Stadium that also diverted time and resources last summer and that also oozes red ink from underneath the brand new field and stadium.

The CRDA is pushing a very big boulder uphill

One positive note is the installation of the long-overdue chiller system that seems to be on target for this summer after a year-long delay.

The RFP (Request For Proposal) packages have gone out and they have received initial responses. A bid is expected to be selected next month and a contract signed allowing work to begin sometime in mid-to-late June.

“Right now there are (RFP’s) out on the street. They’re due to be turned back in, in about two weeks or so. Bob Saint (CRDA, Construction Manager) has been hard at work on it. We’re relocating the chillers based on a new building concept. They’re not going into the space where the current chillers are. We hope to get it done this summer.”

Should the Wolf Pack have a long Calder Cup playoff run into May, and if several other scheduled events happen at the XL Center, the work won’t likely start until those events are done so as to not impact either the event or the installation project.

“We’re gonna wait until the hockey season ends and the way the Wolf Pack are playing it could be a longer season, and we have the Cirque de Soleil Ice Show in June and several still to be announced concerts.

They’re too many things to move around. Better to wait until everything is done,” said Freimuth.

Will the new chiller system be hooked up to the existing system and disconnecting the current outdated system?

“We’re gonna hook it up as soon as we can. We’re gonna transition to it we’re not going cold turkey on the old system. We’ll do it when the new system is ready, there is going to be a transition period to work things out before a complete change. When we get the chiller system put into shape and ready to go will do it. To be honest, they’re not too many more rubber bands left that we can put on the chiller system that we have now. We’re running pretty thin on the line as it now, we gotta get this thing done.”

The last grains of sand are running out of the hour-glass. It begs the question, can this last effort to get the new XL Center project going before the green light goes on and if it can succeed?