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July 30, 2024

CRDA board signs off on $145M XL Center renovation; some planned upgrades left on cutting board 

Michael Puffer | Hartford Business Journal Construction crews last summer worked on the new sports-betting lounge at the XL Center, which debuted in September 2023.
By Michael Puffer

The Capital Region Development Authority’s board of directors, on Tuesday, agreed to move forward with a $145 million renovation of downtown Hartford’s XL Center arena, even as legal questions swirl around a venue ownership and management company that’s bearing $20 million of the cost.

“The main event is the program to improve the building has advanced,” CRDA Executive Director Michael Freimuth said. “We will work through whatever issues are out there.

The significance of today is the agreement has advanced to put private money along with public money to advance the project.”

Under an agreement approved by the CRDA board, Los Angeles-based live venue developer and manager Oak View Group will contribute $20 million for extensive renovations and upgrades to the roughly 16,000-seat sports and entertainment venue. In return, OVG’s contract to manage the venue will be extended 20 years, and the company will keep the first $4 million in annual XL Center profits.

Any profit beyond the $4 million mark would be split with the CRDA for XL Center upkeep and renovations. OVG would be responsible for contributing $500,000 to an XL Center maintenance account annually.

The majority of the renovation funding will come from the state, which has agreed to pay up to $125 million in project costs. 

The CRDA earlier this month held off on key votes concerning the renovation plan, after state House Republican Leader Vincent Candelora and Senate Republican Leader

Stephen Harding sent a letter to Attorney General William Tong questioning the deal. Candelora and Harding’s letter notes the state has joined a Department of Justice antitrust lawsuit against Live Nation and its subsidiary, Ticketmaster, the latter of which has a close relationship with OVG.

Tong, last week, agreed to recuse himself from any state Bond Commission vote that would approve XL Center funding, but he said he would not further oppose OVG’s involvement in the renovations deal.

CRDA Deputy Director and General Counsel Anthony Lazzaro told board members Tuesday that he had been contacted by the Department of Justice about the ongoing antitrust lawsuit and may be asked to testify in the case. The Justice Department has subpoenaed documents related to OVG’s hire of Ticketmaster to handle events sales at the XL Center and Rentschler Field, Lazzaro said.

Separately, the Connecticut State Contracting Standards Board has launched an investigation and has requested documents, Lazzaro said.

The new agreement with OVG requires ticketing services to be bid out, and gives CRDA veto power over the selection process.

During Tuesday’s meeting, OVG representatives stressed there is no ownership relationship between Live Nation and OVG. They also agreed to accelerate a re-bidding of the ticketing services for Rentschler Field and the XL Center.

Meantime, the $145 million XL Center renovation will provide upgrades to plumbing, electrical and other systems. There will be new stage rigging, lights and cosmetic upgrades throughout the building. Elevators and escalators will be upgraded and the roof will be replaced. The headlining upgrade will come to the “lower bowl” section of the arena, where the stage will be moved, seating upgraded and premium amenities installed.

The CRDA has scrapped plans for a major upgrade to the problematic, low-capacity loading area due to budget constraints.

There are a couple of steps remaining before renovation work can begin. OVG’s leadership needs to approve the deal, Freimuth said. And the state Bond Commission needs to release funds already committed by state lawmakers.

Shifting money

To make the budget work, the CRDA board agreed to shift $45 million in previously committed state funding for Hartford housing and infrastructure projects, to XL Center renovations.

Low-cost CRDA financing has been a key factor in drawing developments that have added thousands of apartments to Hartford in recent years. 

During the meeting, Freimuth said he is confident there will be adequate funding to keep housing projects moving in the short term. He noted Gov. Ned Lamont’s focus on increasing the state’s housing stock.

After the meeting, Freimuth said the drawdown will leave about $46 million or $47 million left in previously approved state budget funds for housing and infrastructure projects.  

Hartford Mayor Arunan Arulampalam also expressed support for the reallocation of funds, aguing the XL Center’s rehabilitation will fuel a vibrancy that makes Hartford an attractive destination for developers and renters.

“The XL Center is one of those projects that allows us to jump ahead in terms of building a sustainable housing market in our downtown,” Arulampalam said. 
 

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