HARTFORD, CT — The state bond commission approved loans for dozens of projects and expenses during a brisk meeting that ended in less than an hour, pausing only to discuss several agenda items totaling $118 million for renovations to the aging XL Center in downtown Hartford.
Mike Freimuth, executive director of the Capital Region Development Authority (CRDA), spoke at length about the challenges facing the XL Center and how the new money could be used to improve the aging structure. He began by saying that a complete replacement of the XL Center is not feasible because it would cost between $750 million and $1 billion to build a similar building today and the market cannot justify that kind of investment. Instead, it is necessary to re-engineer the current XL Center’s business model.
“Our biggest concern today is that the building is slow, quiet and run down,” he said. “No matter how much we put into fixing elevators and power systems, it’s slowly dying.”
The reason is that it can’t handle today’s advertising and event load. It doesn’t have the right rigging. It doesn’t have the right power systems. Its seating systems don’t optimize yields. It’s outdated and tired in so many ways that the business model is starting to fail.”
He said the investment strategy for the XL Center going forward was two-pronged. First, the CRDA would partner with the Oak View Group to attract higher quality acts and generate better revenue through higher ticket prices.
The second part of the strategy would use the bond money to offset what Freimuth called the “depreciation” of the building by repairing things like elevators, escalators, plumbing, electrical systems and the roof. But he warned that this would be a lengthy process, citing as an example that the current wait time for a new escalator is 48 weeks.
The money will also be used to renovate the XL Center’s seating areas to generate better revenue.
“With this building, all the top tickets are up on the roof,” Freimuth explained. “Basically, it goes back to the Roman emperors who stood on top of their house. It’s just backwards. The revenue streams that buildings generate today are clubs, lounges, bunker suites and special seating arrangements tied to special amenity packages. People are willing and able to pay for that. We’re just not taking that because we don’t have it to sell. So a big part of this program is redesigning the lower seating area to get a better return per event. That’s what the promoters want and expect. That’s why they’re giving up the building. And that’s what we need to make the budget work. So we’re really making more money on every seat we sell in the lower seating area.”
Republican Rep. Holly Cheeseman of East Lyme expressed concerns about the cost of the renovation, but acknowledged that it would be better to spend the money than to demolish the XL Center and build another parking lot in the capital. She said any improvements to the XL Center would have to be accompanied by attempts to lure people back to downtown on a more regular basis.
“I think a vibrant downtown is important,” she said. “I think it’s important to organize events that bring people downtown. And I make this statement to the private employers in the Hartford area as well as the state government. We need those people. Events like this in an improved venue are one way to bring those people back. But the other way to bring those people back is to bring people back to the office. I know our private employers are doing that. But this is a plea. We need to make this to the state authorities as well.”
Governor Ned Lamont, chairman of the bond commission, said he supports the plan to borrow money to complete the project.
“I think we’ve had the XL Center on hold for about 10 years,” he said. “Also, I think it’s time to decide whether or not we want a vibrant event center in our downtown Hartford. I think Mike Freimuth has struck a pretty good balance there. We could tear the thing down. I don’t know what would replace it. It would certainly cost well over a billion dollars to replace it. I think that $118 million is a way to increase attendance, increase revenue and make the whole thing much more self-sustaining for at least the next 20 years.”
After discussion concluded, the bond measure for the XL Center improvements was approved with only one dissenting vote from Sen. Henri Martin, R-Bristol. A total of 40 items were approved during the commission meeting, with all other items on the agenda being approved unanimously.
