Hartford Business Journal

HARTFORDBUSINESS.COM | October 24, 2022 11 The XL Center in downtown Hartford is nearing 50 years old, and is in need of significant upgrades, officials said, to compete for entertainment acts. HBJ PHOTO | GREG BORDONARO Financial Lifeline? CRDA in serious talks with global sports, entertainment company on multimillion-dollar XL Center investment By Michael Puffer mpuffer@hartfordbusiness.com T he Capital Region Develop- ment Authority is angling for a deal with a Los Angeles-based international sports and entertain- ment company that could invest tens of millions of dollars into the aging XL Center in downtown Hartford. CRDA Executive Director Michael Freimuth recently told his board — which oversees the XL Center on behalf of the city of Hartford — that Oak View Group (OVG) is interested in a deal. That interest is predicated on a recent study that confirmed the ability to make desired upgrades to staging and loading facilities at the roughly 47-year-old arena, which is home to UConn men's and women's basketball and hockey — as well as other entertainment events — and is still seen by many as a key economic development tool for the city. "We figured out how to resolve the physical issues that were critical to OVG's business model," Freimuth said in a recent interview. "We would like them to invest in the building. We'll do the elevators and escalators and we will give them operational rights to run the building for a longer period of time — try to share with them the upside and minimize our downside." CRDA and OVG are exploring a potential agreement that could put the XL Center under OVG's management for an extended period, and which would govern the split of revenues, expenses, liabilities and future costs. OVG already manages the XL Center on behalf of the CRDA. OVG took over management following its November 2021 acquisition of Spectra, a venue management and hospitality company. At the time of the deal, Spectra was nearing the end of a multiyear XL Center contract. That contract with OVG has been extended to 2025 due to the venue's prolonged shutdown during the COVID-19 pandemic, Freimuth said. Freimuth said he believes OVG might provide $20 million to $30 million for upgrades directly impacting customer experience. That would offset part of a $100 million program of repairs and upgrades currently envisioned for the roughly 15,500-seat venue. Pared down rehab State and local officials have sought a path forward for the deterio- rating and outdated XL Center for the better part of a decade. The CRDA board had, in 2018, signed onto a $250 million overhaul recommended by consultants. But state lawmakers balked at the price tag, sending the economic devel- opment agency and its consultant — SCI Architects — back to the drawing board. That resulted in a pared back plan focused on upgrades to the "lower bowl" portion of the XL, improving staging, adding premium seating close to the stage, and other upgrades. Planned improvements include a series of retractable walls that could close off some of XL's seating, shrinking capacity to 11,500. That would allow the arena to meet modern standards for the ratio of bathrooms and concession stands to seats, improving XL Center's odds of pulling in more acts, Freimuth said. The walls could be pushed back for larger events requiring more seating. Extensive improvements to IT infra- structure and the show-equipment loading area are also planned. "We are leaving a lot of money on the table because we don't have the right product," Freimuth said. "That's where the $100 million project comes in." In 2019, the General Assembly allocated $65 million toward this pared-down upgrade of the XL. Those funds need confirmation from the state Bond Commission. Before that happens, CRDA and state officials hope to secure private money to close the gap between taxpayer funding and the $100 million renovation plan. David Lehman, commissioner of the state Department of Economic and Community Devel- opment, said he is following the negotia- tions. He acknowledged the partner- ship with OVG is not yet certain. "We think if we can achieve this, this is the best outcome for the building," Lehman said. "You are going to have an operator who is going to have more skin in the game and is going to be focused on more activity, more events in the XL. … You are just going to have a lot more going on at the center if we have an operator that knows how to bring in concerts, that knows how to bring in shows." Revitalization efforts The state is already spending significant funds on XL Center main- tenance before it dives into the $100 million plan. CRDA has tapped $40 million approved for the XL Center in 2017 to cover the costs of $15 million in ongoing repairs and upgrades — including construction of a highly-an- ticipated sports bar/sports betting lounge on the edge of the building overlooking Ann Uccello Street. Providence-based Dimeo Construc- tion is building the lounge under a contract that includes improvements to the building's western concourse, construction of additional restrooms, commercial kitchen improvements and upgrades to other systems. The sports betting facility was originally targeted to open this fall, but its debut David Lehman Mike Freimuth

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