BY: Gerry Cantlon, Howlings
HARTFORD, CT – The Tuesday post-holiday, virtual CRDA Meeting regarding the XL Center was canceled. The reason? Northland Corporation, which has been in negotiations for nearly three years with the CRDA regarding the pivotal atrium portion of the building, has requested a meeting with them.
“The public hearing was postponed until the end of the month or February on XL by CRDA pending a meeting with Northland. There are no specific plans from them at this point.” said CRDA Executive Director, Michael W. Freimuth.
The meeting was to cover the $100 million dollar reboot of the XL Center of which $22 million from a previously approved $40 million will be put to use to begin the lower bowl strategy.
$65 million of the $100 million which was approved by the legislature, a week before the shutdown, is still pending an approval by the Bond Commission and is currently not on the docket yet as the financing mechanism (general obligations bonds, revenue bonds) is still being worked on with legislature back in session.
The Governor has stated he has support for the project but has also stated his requirement that the state goes on a “debt diet” to avoid too much state borrowing.
The CRDA Venue committee met in an executive session on Thursday at Rentschler to tackle several serious budgetary issues they have to oversee at the various entities that are under their purview.
The agenda topics were all regarding amendments to existing current contracts that had been proposed and needed to be looked at for the start of the new fiscal year. They also needed to deal with all of the COVID related issues of the past year that altered the entire economic landscape starting March 12th.
MSG will operate the Hartford Wolf Pack for the 2020-21 season, their 24th, which will consist of at least 30 regular season games and the yet undetermined Calder Cup playoffs to follow.
There are three contract modifications that are being negotiated. The first is the waiving of the affiliation fee. The second is MSG being required to pay all venue expenses related to Wolf Pack games and practices. The third is if any fans are going to be allowed at some point this season, and to have all net revenue used to offset expenses.
A signed agreement is expected by the end of this week or the beginning of next week.
“The management agreement amendment (were) approved providing discount in this year’s fees for an extension of the contracts at Convention Center (one year) and XL Center (two years), but not Rentschler as those agreements need more work. All still requires full board approval later this month,” remarked Freimuth.
Looming over the entire agreement is how the Wolf Pack manage this if they are not going to either Champion Skating Center in Cromwell, or the Rangers practice facility in Tarrytown, NY. How are they seeking to reduce costs?
A long-time source for Cantlon’s Corner, with strong familiarity with MSG operations, stated that over the years MSG has kept a reserve contingency fund growing and that will likely be tapped into to be able to handle the more than likely six-figure bill they will be incurring from the CRDA.
That bill will likely cover the installation of ice, coats of bringing recently furloughed essential employees back to the XL, running the HVAC systems, re-starting elevators, escalators, maintaining and use of the Zamboni’s, the water system to make ice, having showers ready for the Wolf Pack and visiting players, staff personnel for the Wolf Pack for day-to-day and game night operations, and the handling of all the necessary functions to keep the Wolf Pack operational.
The Spectra management agreement, now run by the hedge fund Atrios, will also be amended. The public health emergency order that was promulgated in March caused Spectra to ceased all booking activity for the building. The CRDA has incurred much larger losses than forecasted in its original budgetary projections.
In return, the CRDA, seeking monetary relief, Spectra will get a two-year extension of their current lease agreement in lieu of being paid their management fee for the fiscal years 2021 and 2022 for a six-month period.
The last item of business was the extension of Waterford Venue Services, the handler of catering services, and the sales and marketing of the Connecticut Convention Center, their contract by a year in lieu of being paid their management fee for a four-month period during Fiscal year 2021.
