BY: Gerry Cantlon, Howlings
HARTFORD, CT – The opening of the XL Center in the first quarter of 2021 and the February 5th AHL start date stand like everything else, held hostage by recent COVID spikes.
“We have been told probably February, but so much can change as we have all seen. One big issue is whether fans will be allowed or not? We sit here today with COVID unchecked out there. It still has to make economic sense going forward for us or MSG to play in the building,” remarked CRDA Executive Director, Michael W. Freimuth.
The Governor has not yet given Freimuth and the CRDA an inkling if and when they may open a large facility like the XL Center.
“No, I’m at the tail end of that world,” Freimuth said with a laugh. “Obviously, we have ongoing conversations, mostly really regarding Rentschler with Toronto FC soccer, but that’s an outdoor facility, of course with strict COVID regulations. We also had discussions regarding Dillon (Stadium) (home of the USL’s Hartford Athletic) during the summer. An indoor (facility) is a totally different animal.
“The Convention Center and the XL Center have different protocols and both are very different buildings. Remember, there are so many different levels of restrictions on restaurants, churches, bars, and gyms. I don’t see arenas getting done in the next couple of months.”
The CRDA is hoping the long-awaited project – now ongoing for almost eight years – to renovate the XL Center may finally be at hand, and this is the upside perversely of the pandemic-induced coma-state that the building presently is in.
The COVID-related hibernation has given the CRDA the latitude to do so, unencumbered by an arena that is usually a beehive of activity in the winter, with college basketball, both men’s and women’s, college hockey, and the AHL’s Hartford Wolf Pack. That doesn’t even take into account whatever concerts, and family shows that would get booked.
The extent of the renovations will depend on when the State Bond Commission releases some or all of the $65 million approved for the $100 million project. In the last session of the legislature, literally, a week before the state and the country went into a pandemic shutdown, the authorization was given.
The bonding package will not make it to the Bond Commission docket for its December 11th meeting. The hope is that the issue will be raised in the first quarter of next year.
“I think the likely time frame is the first quarter (of 2021). There is a lot of people talking now and we’re gonna ride this out as best we can for now.”
The Governor has signaled his support for the deal but has also talked about keeping the state on a debt diet and not borrowing so much money.
For Freimuth, and the CRDA Venue Committee, and the entire board, this is a make-or-break time for the building that has withstood a lot of challenges since its first grandiose $250 renovation plan was unveiled in February 2013.
“We have cleared the legislative hurdles regarding bonding. It’s in the budget, and there’s an authorization for (the) XL. The decision now, it’s the Governor’s call when and what goes to the Bond Commission. The General Assembly has made the decision and we’re always in the situation every year to go to them statutorily in getting appropriations for the building. In other states, they have a bypass mechanism, and what that is, and that the payment for general services of the building is the general funds. We don’t have that here. How that could be done? I don’t want to speculate on that.
“The state, every year, gives us between $600-$800 thousand in appropriations to cover our roughly $2 million deficit – every year. We generate close to two million dollars in taxes every year for the state from payroll taxes, excise taxes, admission taxes, and sales taxes. We have that two million and we get back $600K and aggregately total its $1.4 million.
“I have people crying all the time – it’s losing money when we send you more money than you’re giving it. That’s not the bonding capital (budget) issue, which is separate. This is an operational issue. If we could dedicate the taxes back to the building that would stop the annual fight at appropriations time every year. This would help the building because it gets no credit for what it gives back. In other places (states), it goes back to servicing the building and that helps avoid the annual legislative skirmishes. That would be nice to have and take away a lot of the pain we have in the system now.
“That would be a legislative issue to handle the matter. These legislative issues would help us out greatly. Shy of that structural change, we will continue to wrestle with this problem every year,” Freimuth said, speaking at length.
Freimuth was clear that this was not an issue that they will be putting forth in this General Assembly session. However, it was a very clever trial balloon to deal with the two issues he noted; the annual budget fight that consumes chunks of political capital, and the long-term needs of the XL Center.
The frustration of a nearly eight-year quest is understandable. The CRDA has been trying to bring the XL Center into the 21st century, but with the clock ticking and as each month passes, the reality is that the building becomes more obsolete and irrelevant.
The other part of this is a quiet admission from CRDA Executive Director is that private capital exploration is a dead end. To this point, it has not yielded any serious investors who were willing to invest private capital equity into the XL Center.
Last week, in what might be the final piece of the puzzle to get the project pushed over the finish line was the election of Matt Ritter (D-Hartford) as the new Connecticut Speaker of the House. He replaces the retiring Mark Aresimowicz (D-Berlin). The XL Center is in his district and has long been an advocate of the building.
“He has been a champion for a long time through the entire process,” Freimuth stated.
Speaker Ritter told the Hartford Courant, in no uncertain terms, how he felt.
“We’re trying to put together a plan of financing if you will,” Ritter said. “But I can only tell you this, for people that know me, this project will get done. For fans, and for people that want to see the UConn women playing Baylor in front of 15,000 people in an updated arena, and people who want to see the UConn men play Georgetown with Coach Hurley, I will never let that go.”
Two hurdles remain, however. One of them is the current ballooning state projected state deficit projected which is currently sitting at $4.3 billion and counting.
Prior to the pandemic, legislators have been very reluctant about committing that much money.
“In the legislative process, we have cleared that hurdle. Really, it’s getting to finding the right financing formula at this point,” Freimuth commented.
There are options with the bonding.
The capital expense part of the ledger sheet can come in two forms. The first is in the form of general obligation bonds. Those are repaid but over a long period of time. Those were used with the New Haven Coliseum where the original bonds were finally paid off three years after the building was imploded and demolished.
Then there are “Revenue Bonds.” They are paid back through a formula where revenue generated is used to repay the money back on a quarterly basis or annual basis.
How this is ultimately sorted out is still being discussed.
“It’s probably going to be a combination, but that is still to be decided because we have to still work our way through and under what scenarios. It’s a matter of discussion right now, but nothing has been finalized,” remarked Freimuth.
There is also the matter of purchasing The Atrium and the entire Trumbull block from Northland Corporation. Northland is run by Larry Gottesdeiner. To this point, getting to an agreement with Northland has been a three-year exercise in futility with even the threat of eminent domain having been floated.
The eminent domain option still hangs over the XL Center like Damocles Sword, but to this point, hasn’t been acted upon, as the state leaders from both parties have asked the CRDA to hold it in abeyance.
“There has been no change in the status with Northland, and yes (eminent domain) is still being held in abeyance,” said Freimuth.
Freimuth thinks this could all be resolved this year. “Yes, I think it will be,” He said. Freimuth declined to say how that might happen on an issue that has spanned nearly eight years, two governors and several legislatures.
With the Atrium issue still there, and no clear answer in sight, could the CRDA essentially decide to skip it and just build around it?
“In reality, we can’t fit two bowls onto the one narrow concourse and replenish the concessions area, and plus deal with COVID, improve security, and find enough room to build sufficient restroom capacity,” Freimuth said.
That means the purchase of The Atrium is an essential requirement for the whole project otherwise, they wouldn’t have been in negotiations with Northland for three years.
In other building news, the new chiller system has been completed with a test run scheduled for the very near future.
“Right now, surprise, we have COVID issues with the company as it finishes the project with some guys assembling the system and a few from our staff too. That slowed things down a little bit. We’re dismantling the old one and my understanding is we’re going forward.”
The next construction phase will be drawing upon the final $22-$25 million remaining from the $40 million bonding approved two years ago.
The RFP for the Construction Manager (CM) for the project is in the selection process.
“We’re still reviewing the bids with the prospective bidders, but no decision has been made. I think in the next several weeks, one will be selected.”
Among the projects slated to be completed in this phase is the clearing out of the old chiller space, the Zamboni rooms, staff space to start work on the lower bowl strategy, and the building of bunker suites which are meant to attract corporate sponsorship. They’ll also begin to make the building more revenue friendly and then shift offices and personnel by re-doing Level 61.
“I think we’ll start work in the first quarter. That area is scheduled for demolition but does require some environmental clean-up, and we’re getting it prepped for the suite options. The east end of the building is being worked on for club seating as well.”
The executive part of the government has control of the bonding portion now. What they and the legislative branch ultimately decide to do regarding the long-suffering mess on Asylum and Ann Ucello Street is still uncertain.
