CANTLON: XL CENTER WORKS CONTINUES 

BY: Gerry Cantlon, Howlings

HARTFORD, CT – While the XL Center is open for hockey-only these days, work behind the scenes continues on.

The Capital Region Development Authority (CRDA) and Northland Investment Corp., the owner of the Atrium portion of the XL Center building, have been in discussions that have reached a hopeful stage, though they’ve been to that stage before only to end unable to come to a resolution. CRDA Executive Director, Mike Freimuth, says there is some positive movement.

“We have had several very productive conversations on concepts and structurally. I mean, regarding how a deal will be structured, should we agree to one. In fact, I’m working on the lines of a deal now, and I expect in a week, we will submit it to Northland.

“It’s progressing. It’s cordial. It’s complicated. It’s one of those things where you put it down for a few days and then go back to it. My eyes hurt,” Freimuth said with some levity in what has been a highly vexing problem that is now in its third year.

“This what we call, ‘Level 61,’ the concourse level for the Atrium; the storefronts along with Trumbull (street). We are going to put it to paper and go from there.”

The state bonding issue remains in limbo since last March. A week before the shutdown, $64 million was approved but has yet to be bonded.

“I don’t know, and it’s not on the docket, and we haven’t had a bond meeting in three months. They’ve been canceled. Technically, it’s usually the last Friday, but nothing is scheduled at this point, and you usually hear a week or two before that.

“I have not seen anything, but I have had conversations with people whether there will be an agenda. When that is made available is really the Governor’s call.”

The state’s new indoor requirements permitting 10% capacity is a step in the right direction but falls far short of what would allow the XL to be even a somewhat viable building.

“On April 1st, we’ll be permitted 10%, but that doesn’t make sense to open the building at those numbers”, Freimuth said. The CRDA, Spectra, and MSG are all in discussions about the changes and moving forward, “We hope to go higher in May and June and hopefully normal by late year.”

Freimuth then discussed the possibility of having maybe 25% of capacity be feasible in May or June.

“Everything is based on a building’s capacity. Right now, it’s based on the building’s functionality, and we’re basing it on say 13,000 (contracted number), but I have no idea where it will fall at as far a permitted percentage.”

MSG is paying the freight for the 110 days that they will be in the XL Center. The logical question is to ask how I feel about the new ability to allow people.

“It’s understood with the re-work of the contract that we’re all subject to the discretion of state health protocols by the DPH (Department of Public Health). We would allow them to have people based on state requirements – a family and friends possibly we’ll likely see something like that.

“It’s really a math game as to what it will take to fire up the entire building for a crowd to see an event, go to a show, or go out for dinner, quite frankly.

“How this will play out here, or the other buildings too (Dillion Stadium housing the USL FC Hartford, Dunkin Donuts Park – the Eastern League’s Hartford Yard Goats, and Rentschler Field – the home of UCONN football) really remains to be seen how COVID-19 rates, vaccinations, and the big unknown public appetite to return to arenas, particularly indoor ones, and it’s a conversation we’ll have to have at some point. Outdoor venues have a greater capacity level because they’re outside, and Rentschler is much bigger than the other buildings.

“We’re expecting six percent or better at those stadiums. Maybe Dillon at full operations by the end of the year. That’s where we’re headed.”

When asked if it could be possible to have at least Rentschler at 50% capacity by September, Freimuth replied, “Well, they’re already operating under 50% now,” He said with his tongue buried quite deeply in his cheek. “Realistically, it holds 40,000. The attendance over the last few years is sub-10,000. We would expect to be better than that. If we had 20,000, we would be above our average and well within the capacity levels of the building.”

The project losses for the 2020-21 fiscal calendar year are ugly.

“Right now, it’s looking north of $6 million,” Freimuth said.  With a little ‘gallows humor’ added, “I really appreciate what the word ‘hemorrhaging’ means.”

The equation to make minor league sports successful is understood by Freimuth, the CRDA, and wrestle with along with MSG and Spectra.

“Group sales are their lifeblood, and if you can only have so many people in the facility, how does that work when you have a capped percentage number?

“I just don’t know if we have the math to make it work this year. Traditionally, the building goes quiet late spring and summer anyhow. I really think we’ll be re-stocking (supplies, food/beverage, and operational parts), re-training people over the next three or four months; that’s how long it will take to hit the fall season hard. I can’t see things changing here in the spring.”

But the question that needs answering is determining if the market has started to awaken.

“We have some holds for days, but nothing solid or confirmed at this point. At least we have some promoters asking for dates and asking for a hold on dates later in the year, that’s good. We still have no idea who will be touring and we’re not sure how this going to work out whether you’re going to book a concert for a food show.”

What about NCAA future regionals for basketball or hockey?

“Those are done five years out. We have submitted bids in the past and are continuing to do so and we’ll see where it goes. Nothing is a lock these days.”

The contact with Spectrum has been extended through 2025, but there are caveats, and Freimuth is very cognizant of them.

“It’s a function of this year, and it does depend on when this re-boot is done,” a confident Freimuth said. His confidence comes after almost eight years of indecision, this will occur; it depends on premium, seating, getting all the new elements in place that are needed. We have to see that deal and the building be able to attract new and quality events, and all of it will get digested into a new contract, and all of this costs money.”

Stafford Sports was contracted to hold preliminary discussions with UCONN regarding a future new XL Center contract and what it would look like?

“There is no new deal, but conversations are going back and forth between them. We would like to get more revenue for UCONN and make it more profitable for them to be at the XL Center. At the same time, we have to make the math work for us too. It’s a bit of give-and-take here. We believe UCONN will do better in a new building. It goes without saying they will be able to sell a better seat at a better price. I think the primary reason for that will be the switch in conferences to Big East will sell the house better and will have more appeal.

“A combination of things will push the revenue lines up, but your expenses will go up too based on the higher caliber of a building; after 45 years things fall apart and don’t work.”

The CRDA, despite having $25 million on hand from bonding two years ago and was slated to select a CM and begin level 61 work; all of that is in a holding pattern until the big $64 million are made.

“It’s a part of the funding cycle, and we’re in a holding pattern right now. This is all apart of the choreography that has to play out here. We do have the money, and we were going to begin the process on that whether we’ll do the CM for that yet will see.

“It was my intent to do that, and frankly I can’t till the bond issue is resolved and the outstanding issues with Northland.”

Given the dearth of economic activity in downtown Hartford has the CRDA been helping local businesses such as restaurants, that rely on the XL Center in operation for their business.

“We have been working mostly with the hotels, but not the restaurants. In theory, it goes hand-in-hand. The best we can do is get the buildings up and operating at full capacity. We don’t have those types of programs and funding capacity, but that really falls under the jurisdiction of the state DEC (Department of Economic Development).”

CRDA

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