Hartford Business Journal

10 HARTFORDBUSINESS.COM | NOVEMBER 27, 2023 lower-bowl seating, including the addition of event-level suites; a new dressing room and lounge for performers; and relocation of the stage to increase concert capacity, among other improvements. "Just as that worked in all three of these buildings that I'm pointing out to you, we feel that we're going to accomplish the same great results for the XL Center," Abate said. At 50 years old, Baltimore's arena is about the same age as the XL Center, and it suffered from similar repair needs, Abate said. Baltimore did not want to directly invest in it, he said. "OVG came in and invested quite a bit of money," Abate said. The cost of the OVG-financed, 11-month-long project in Baltimore ultimately topped out at $250 million. A planned $100 million XL Center renovation would push back the arena's main stage, increasing concert capacity to over 13,000 people. RENDERING | CONTRIBUTED Big Bet Oak View Group confident $100M renovation will spur XL Center turnaround; venue will draw 'well above 30 shows a year' By Michael Puffer mpuffer@hartfordbusiness.com I nternational sports and entertain- ment company Oak View Group is preparing to wager at least $20 million that Hartford's XL Center arena can transform from an aging venue running a $2 million annual deficit to a bustling moneymaker. The Capital Region Development Authority (CRDA) and OVG have a tentative deal that would require the Los Angeles-headquartered company to invest $20 million toward a $100 million overhaul of the roughly 15,500-seat arena. Gov. Ned Lamont, in his current budget, lined up $80 million in public funding to cover the remaining costs. Executives with OVG — which already manages the venue — say experience demonstrates they'll be able to jump-start activity at the XL Center and turn it into a profit center, following much-needed renovations. The half-century-old Hartford arena currently hosts six to eight concerts a year, with many performers and promoters turned off by substandard stage rigging, lack of premium seats and a loading-area chokepoint that adds much time and cost to setting up and breaking down shows, according to OVG and CRDA leadership. At an October CRDA Board of Directors meeting, Oak View Group Facilities President Hank Abate predicted a draw of "well above 30 shows a year" in the second or third year following renovations. Under a tentative 20-year contract negotiated with CRDA, OVG would keep the first $4 million of annual net profit from the arena each year, in return for its upfront renovation investment. After that, profits would be split evenly with the CRDA, which would use those funds for arena maintenance. OVG would be responsible for covering any operating loss in the meantime. Abate said his company aims to top the $4 million net profit mark by the third year following reno- vations, which are targeted to take place in 2024 and 2025. Similar arenas, big draws Abate said OVG's experience with similarly sized venues bolsters confi- dence in XL Center's potential. He drew parallels with the 9,500- seat Enmarket Arena completed in Savannah, Georgia in February 2022; the Acrisure Arena completed in Palm Desert, California in December 2022; and a renovation of the CFG Bank Arena in Baltimore, which reopened with a Bruce Spring- steen concert on April 7. Renovations allowed these venues to offer easy loading, advanced stage rigging, improved fan and performer amenities, and more premium seating — all features planned for Hartford's downtown arena, executives said. XL Center renovation plans call for a significant expansion of premium Before renovation, the venue hosted up to four concerts annually by premier performers. The venue is on track for 109 concerts, shows and other events this year, OVG said. According to terms approved by the Baltimore Board of Estimates on Nov. 24, 2021, an OVG-affiliated limited liability company was to receive a 30-year contract — with two, 10-year renewal options — in return for spending at least $150 million reno- vating the arena. OVG is responsible for funding the Baltimore arena's operations and debts. It must also annually put aside at least $750,000 for upkeep and improvements during the first 10 years of the contract, and $1.5 million each subsequent year. Under the agreement, Baltimore will hand over all taxes raised from the venue in excess of a $1.75 million threshold. The city would also receive a share of profits after the project reaches a 15% internal rate of return. Abate told CRDA board members planned renovations will allow the XL Center to compete with the state's two casinos, Foxwoods Resort Casino and Mohegan Sun, which have poached the concert business over the years. Foxwoods, in southeastern Connecticut, has theaters with 4,400 and 1,400 seats, respectively, that will host, among others, Kenny G, Jefferson Starship, Jerry Seinfeld and Boyz II Men in December. Mohegan Sun Arena has 10,000 seats and is home to the Connecticut Sun WNBA franchise. Its upcoming concerts include Frankie Valli & The Four Seasons, Bret Michaels and Michael Bolton. OVG's business has benefited from changes in the music industry, Abate noted. Musicians can no longer count on album sales due to a migration of music online, and so they make their money touring. Once renovations make the XL WHAT WILL $100M XL CENTER RENOVATION PROVIDE? Fan amenities • New general seating throughout • Expanded lower bowl and premium lower bowl seating • Wider seats in lower bowl • Americans with Disabilities Act seating upgrades • Concourse improvements • More points of sale and fixtures per guest Performer/player amenities • New star dressing rooms • New artists lounge • UConn locker room and lounge • Event production spaces Source: Capital Region Development Authority

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