A $3 million emergency allocation from the state has helped alleviate a mounting cash crunch at the Capital Region Development Authority, at least for now.
CRDA, which oversees the XL Center and Rentschler Field, has seen venue revenue plummet during the COVID-19 pandemic because of prolonged facility closures. That’s made it increasingly difficult to cover payroll, security costs and vendor obligations, Executive Director Michael Freimuth wrote in a letter last month to Melissa McCaw, Gov. Ned Lamont’s budget director and secretary of the Office of Policy and Management.
“Without an immediate influx of funds, it is unclear whether these facilities will even be able to reopen once COVID is behind us,” Freimuth wrote.
The state Finance Advisory Committee voted on Jan. 7 to approve the transfer, which comes from a Department of Economic and Community Development account. CRDA plans to split the money equally across XL and Rentshler, whose combined accounts payable balance as of last month had ballooned to $4.6 million.
The $3 million transfer comes after CRDA has taken various cost-cutting steps amid the pandemic, including laying off more than 125 employees, renegotiating venue maintenance and management agreements, and advancing $750,000 from its own capital reserves ‒ money that had been meant for capital upgrades or smaller community projects ‒ to cover XL expenses.
Despite that, the venues as of December had amassed three to four months worth of accounts payable balances, up from the usual two months.
CRDA had been worried that its mounting obligations might imperil several revenue-producing events on the calendar this spring (assuming they are not canceled or postponed), including an Olympic qualifier gymnastics competition at XL and the NCAA lacrosse championships at Rentschler.
“These events represent significant sources of revenue for these venues ‒ revenue that could help put them back on their feet but that could be forfeited if these venues are unable to reopen,” Freimuth’s letter said.
XL faces a projected operating loss of $4.4 million this fiscal year, up from $844,000 last fiscal year, while Rentschler is expected to lose $993,000 this year, up from $776,000, CRDA said.
While the $3 million brings CRDA’s accounts payable balance down to more normal levels, helping it to bridge the coming months, Freimuth told HBJ Thursday that CRDA is hoping for funds from the state legislature, perhaps $5 million, in order to keep accounts current and reach the June 30 end of the fiscal year.
