Hartford Business Journal

4 HARTFORDBUSINESS.COM | APRIL 1, 2024 XL Center renovation bids come in nearly $40M over $107 million budget; project faces redesign/delay By Michael Puffer mpuffer@hartfordbusiness.com A planned $107 million over- haul and modernization of Hartford's 15,500-seat XL Center sports and entertainment arena is in jeopardy after contrac- tors returned bids tallying roughly $140 million. Now project planners are going back to the drawing board, attempting to cut expenses without trimming elements essential to drawing more concerts and events, said Michael Freimuth, executive director of the Capital Region Development Authority, which manages the down- town arena on behalf of the city. "It's obviously too high," Freimuth said of the tallies from the bids that opened in February. "What we are talking about is tempering it back, redrawing it, and putting it on the streets to see if we can get it into a better range." Gov. Ned Lamont and state lawmakers last year agreed to pump $80 million into an XL Center reno- vation, provided venue operator and promoter Oak View Group kick in an additional $20 million. The Los Angeles-based live enter- tainment company agreed to do so, in exchange for a 20-year contract to run the XL Center and keep the first $4 million in annual net profit. Any profit over that mark would be split with CRDA and used for arena maintenance. OVG would be respon- sible for covering any operating loss. CRDA has been angling for years for a large-scale rehabilitation of the roughly 50-year-old and increasingly obsolete arena. CRDA leaders say major systems need to be replaced, while premium seating, staging and other elements of the downtown venue need updating to attract performers and events. Freimuth said any changes to the XL Center renovation plans must include upgrades that support shows, such as rigging, increased power capacity, new lighting, a new sound system and staging improvements. He also wants to preserve plans for premium club seating, upgrades to lower bowl seating and improvements to amenities along the concourse. 'Push the envelope' The XL Center currently runs a roughly $2 million annual operating deficit and hosts six to eight concerts a year, in addition to various sporting and other events. A planned $107 million XL Center renovation would push back the arena's main stage, increasing concert capacity to over 13,000 people. RENDERING | CONTRIBUTED OVG Facilities President Hank Abate, during a CRDA meeting last year, expressed confidence his group can boost that number to "well above 30 shows" annually, provided renova- tions go forward. This latest budget setback has apparently not dimmed OVG's interest. "We are still confident and excited about the project, and at CRDA's direction, will participate and support the re-bid process," Peter Luukko, co-chair of OVG 360 — the compa- ny's management arm — wrote in an email to the Hartford Business Journal. Freimuth said he anticipates being able to trim renovation costs to $125 million or less. CRDA would look to corporate sponsors to help close the gulf with the existing budget. It would also seek a bigger investment from OVG, possibly in exchange for additional concessions, such as the amount of profit OVG pockets before the split with the city. CRDA could also tap a portion of its $75 million development fund, Frei- muth said. Any reduction would mean fewer dollars for other economic devel- opment initiatives, such as loans used to incentivize apartment development. Freimuth said CRDA could opt to abandon the XL Center renovation altogether and "muddle through," making repairs as problems arise. But that would lead to a cycle of diminished interest in the space and declining revenues to keep up with expenses, he said. "I think we should push the enve- lope one more time and see what we can do," Freimuth said. Contact Guirlene Morales: guirlene@hncc.org, 860-541-2208 x2213 Habitat's A Brush With Kindness program assists homeowners with external and internal repairs. Helping the Elderly, Disabled and Veterans Now Accepting Applications! Know someone in need? WWW.HFHNCC.ORG R ecently, Habitat for Humanity North Central Connecticut (HFHNCC) received over $300,000 in grants from the Hartford Foundation for Public Giving, Ilsababy Foundation and the U.S. Department of Housing and Urban Development's Veteran Home Repair Modification program supporting the non-profit organization's expansion and programs in the Tolland County area. "Affordable housing is one of the most critical social issues affecting Americans," said Karraine Moody, CEO, HFHNCC. 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