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March 21, 2024

UPDATED: Bids for Hartford’s XL Center renovation come in $40M over $100 million budget; project faces redesign/delay

RENDERING | CONTRIBUTED A planned $100 million XL Center renovation would push back the arena’s main stage, increasing concert capacity to over 13,000 people.
By Michael Puffer

A planned $100 million overhaul and modernization of Hartford’s 15,500-seat XL Center sports and entertainment arena is in jeopardy after contractors 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 downtown arena on behalf of the city.

“It’s obviously too high,” Freimuth said of the tallies from the bids 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 renovation project, provided venue operator and promoter Oak View Group invest an additional $20 million.

The Los Angeles-based live entertainment 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 responsible 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 redesign of the XL plans would need to include planned upgrades needed to pull off 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.

The arena 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.

OVG Facilities President Hank Abate, at a CRDA meeting last year, expressed confidence his group can boost that number to “well above 30 shows” annually, provided renovations go forward.

This latest 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 company's management arm - wrote in an email to the Hartford Business Journal Thursday morning.

Freimuth said he anticipates being able to trim 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, Freimuth said. Any reduction would mean fewer dollars for other economic development 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 envelope one more time and see what we can do,” Freimuth told the CRDA board Thursday. 


 

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