May 22, 2018

CRDA seeks eminent domain powers to acquire key XL Center block

The XL Center
Northland Principal Larry Gottesdiener.
CRDA Executive Director Michael Freimuth.
A site map of the XL Center.
XL Center's atrium, which is owned by Northland Investment Corp.
HBJ FIle Photo
The marquee of the XL Center in downtown Hartford

The head of the Capital Region Development Authority says he plans to seek the power of eminent domain to take over XL Center's atrium and adjoining retail/office space currently owned by Northland Investment Corp.

CRDA Executive Director Michael Freimuth said he is asking his board of directors for eminent authority Thursday after several failed attempts to purchase the space, known as the "Trumbull Block," from Northland.

If approved, he'd have a six-month window to pursue that legal avenue, Freimuth said.

"The board is going to consider granting the authority to continue negotiating with Northland but have the eminent domain option in place," Freimuth said late Tuesday.

Meantime, Northland Principal Larry Gottesdiener blasted CRDA's attempts to pursue eminent domain. He said CRDA's multiple appraisals have led to inadequate valuations of the property and that Northland isn't interested in selling right now, particularly because there is no funding or plan in place for a long-term renovation of the arena.

"The appraisals are deeply flawed," Gottesdiener said.

Both Gottesdiener and Freimuth declined to disclose terms of any previous negotiations for the property, which fronts Trumbull Street and includes largely vacant retail space, office space and XL Center's atrium.

The complicating factor is that the city, state and Northland each control bits and pieces of the XL Center property and certain utilities and other internal systems are shared. Northland, for example, controls certain elevators and escalators key to the functionality of the XL Center and the nearby parking garage.

CRDA rents from Northland the rights to the use atrium space.

CRDA a few years ago recommended a $250 million overhaul of the XL Center, concluding that the building's functionality and ability to generate revenue are severely limited by its age, obsolete design, mechanical systems, limited footprint and fan amenities and narrow concourses.

But CRDA has been unable to secure that full allotment from the state legislature. State lawmakers, however, did grant CRDA $40 million last year for renovations. That money, which is in addition to the $35 million in renovations completed in 2014, could be used for buying Northland's Trumbull Street property.

Freimuth said that section of the building is crucial to the short-term operations and long-term redevelopment of the arena. The retail space, for example, includes a three-story, 192,000-square-foot parcel that would be needed to expand XL Center's current footprint. A 2015 study conducted by SCI Architects concluded that at least 100,000 square feet of additional space, including room for a second concourse, would be necessary to bring the XL Center up to modern-venue standards.

Freimuth said CRDA's board gave him the authority in February to negotiate purchase of the property. Meantime, CRDA is also seeking bidders to potentially buy the XL Center. An RFP was issued last month and bids are due by late June.

Northland's lawyer received word last week that CRDA may be pursuing eminent domain.

Gottesdiener said the agency is taking an unnecessary step and will simply waste XL Center renovation money on a prolonged legal battle. He said CRDA should treat Northland as a partner and work on future redevelopment plans together.

He called CRDA's attempt at eminent domain an "irrational business decision."

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