CANTLON’S CORNER: XL CENTER IS A MESS 

BY: Gerry Cantlon, Howlings

HARTFORD, CT – Just when you thought the XL Center train was on the tracks and heading for the station, something comes up to derail it. This time, it’s potentially fatal.

Last Wednesday’s late-in-the-day press conference by Governor Ned Lamont where he announced he was forgoing his highway tolls plan but is instead funding the entire state transportation bill on the state’s credit card via bonding.

That would force every other pending bonding package proposal, which includes the XL Center, to be sidelined. The bulk of money this year and going foward would be swallowed up by Lamont’s transportation plan leaving only a small portion for other projects.

The XL Center is not a tiny budgetary matter. Another year without funding and movement toward actually starting the very necessary reboot could, in fact, doom the XL Center

The Governor’s announcement came a day before the CRDA, the managing entity of the XL Center, was set to reveal a study, requested by the Governor from CSL International, as a market study to show the viability of a new arena under its Lower Bowl strategy.

The timing could not have been worse.

“As of this time there is no change in the Governor’s position and this decision is way above my pay grade. There are a lot of big people on board (for the XL Center bonding request) a lot of things are happening behind the scenes,” said Michael W, Freimuth, the CRDA Executive Director. “There are a lot of priorities and variety of projects that are under consideration by the Governor. I’ll let the process play out. I’m not into hypotheticals at this point, so I will the reserve any comment right now,”

On the CSL report, which brings a mixed bag of news for the CRDA and the XL Center project, Freimuth was more than open in discussing its impact and the path going forward. The CRDA is in its seventh year of trying to remodel and re-boot the aging 45-year-old XL Center, which was originally built and opened in 1975.

“I’m not surprised at anything that came out of the study. It was in alignment with what we know about the building. The revenue would be dramatically improved by making the investment in the building. Will it run as a negative? Yes, but it would be a lot less that were paying now.”

The report says they can reduce the budget shortfall to a margin within $300,000 to $500,000 whereas currently the number fluctuates between $1.5 to $3 million.

“The study was conservative in its projections and we asked them (CSL) to deal with what we have today. Future revenue streams were not calculated into this such as sports betting, e-sports, entertainment zone, in and around the XL Center, naming rights, and other sponsorship opportunities that could present themselves in the future,” Freimuth stated. “That could add to the current taxes the city and state derive from the XL Center and could be a boom for the  primary tenants and drive the deficit down. This morning before I spoke with you, I authorized the transfer of money from the parking garage account, which is legal, of a million and half dollars to cover the operating deficit at the XL Center. That is the reality of the XL Center.”

One of the critical basis of the report was to assess the feasibility of driving private capital money to help offset the state’s check-writing. Not surprisingly, the answer came up short of what others who have expressed skepticism about the XL Center as a whole. That would be the other town and cities whose political delegations have very leery about more investment in the XL Center and Hartford in general, while they believe their needs are not being met in their towns and cities.

“To bring in a return enough to attract private capital didn’t emerge. I’m not surprised. We tried it a year-and-a-half ago and we got one respondent who wanted 7.5% interest back on their investment over a considerable period of time. We can operate and do well in our market, but we’re not the big boys, MSG, TD Garden, Staples Center, Cowboys Stadium, who have a vastly different formula and space to they operate in. The type of buildings we can compete with and set our rates to are multi-dimensional and have other unique characteristics. This is an arena that has a market, however those who think private capital is going to invest the numbers we need and which we can generate revenue, doesn’t fit their equation. This a public domain facility. Either we make the (investment) or we’re gonna start losing things, in fact some of that has begun.”

UCONN men and women’s basketball, and ice hockey, as well as the AHL’s Hartford Wolf Pack, are the main tenants of the building. The landscape hasn’t changed, but the study says the financial landscape can change with the investment  in the building, but the model requires public dollars not private.

“The model with the premium seating class we developed along with improvement in concessions operations and the other high-tech aspects that we don’t have now in the building. That will improve the dollars coming back and make it more profitable on an individual basis. We are competing against on-campus facilities that are used differently than the XL. We’re a full-season building, some of them are not. We have a full calendar. They often have half the calendar we do. We do believe we can get UCONN an agreement with different type of revenue that we have now and produce better revenue going forward once we have the investment in the building,” said Freimuth.

The building’s electrical, mechanical, and plumbing needs are vast and numerous. Freimuth was not shy about what the daily demands of the XL Center are.

“Our repair bills are going up. The general exception to the rules, repairs are now being magnified…in all areas. We’re struggling. We’re treading water. The state is having to write bigger and bigger checks every year. The band aids we put on are coming off. We’re hemorrhaging (money) right now.

“The alternative of shutting it down seems feasible to a lot of people. We can continue to wobble along, but what does that say to those who attend events? The people who work at the events? The people who promote the event, and the people who pay the freight? Nobody is happy at the moment. We’ve talked enough. We’ve done enough studies and analysis. It’s time to fish-or-cut-bait,” Freimuth, who after seven long years seems to have reached his pique, said and continued on.

“We’ve gone through multiple consultants and they all have come to the same conclusion about the building. It has to be re-done and re-booted. Very simple. We are not going to survive on the formula we are using today. We drive tax dollars, drive hotel and restaurant business. You have a building that we’re asking for a $100 million investment in. We have made hundreds of millions of housing investments, leveraged $300 million in other services including the rail station. After preaching to corporate America for years in making an urban setting more attractive to younger workers and families. we’re just gonna give up on the biggest entertainment center for the city? Give up on the XL Center? How do you rationalize that?”

Freimuth unplugged wasn’t done yet.

“You just brought a building for $200 million dollars (NoDo project), but you won’t give us a $100 million? Why are you asking us to do this? This a public domain facility. I can’t stress that enough and this Is very frustrating.”

The near future he paints is not a pretty picture.

“Right now, pick a crisis. At 10 PM we get a call that a fuse went out and half the concessions are out or half the building needs to be closed for one reason or another. Twenty people get stuck in an elevator during a fire. This might come our way. We have things breaking down now that we can’t get parts for them because they don’t make them anymore. We have dodged a lot of crises. It’s like having a 40-year-old roof on your house and the roof is leaking. You can’t be surprised- you gotta fix it.”

The work that is going on downtown is substantial, and the cause and effect of the XL Center are real.

“Look at the work we’re doing around the XL Center. We’re at a crossroads. Go out Pratt Street and Capitol Avenue and then go down Allyn Street. The work being done there is fantastic. Then go South toward Bushnell (Park). Then head North to Orange and Trumbull all the way to the ballpark (Dunkin Donuts Park). You go by the XL Center both ways. Housing and business linked and stitched together and right in the middle of it, it’s the XL Center. You build those four branches and cut the tree down leaving the spot empty? It doesn’t make sense?”

This funding issue could be an issue with the installation of the new chiller system planned for this summer.

“We’re going ahead. Out of the 115-120 events, we have a year 60 are ice-related. We have no choice. The bids are in. We are in the process of reviewing them and we hope to select somebody in the next couple of weeks, formalize a contract and make our plans. It’s another long overdue project.”

The new generations of arena buildings are going up or are in the planning stages. In Long Island (Belmont Park), Seattle, San Jose, Palm Springs, Arizona State, to name a few, or others are being retro-fitted to be modernized (Webster Bank Arena in Bridgeport will require that in the next two years).

The train is about to leave the station and the XL Center could be left behind.