State lawmakers are considering a plan to invest $60 million into Hartford’s XL Center over the next two fiscal years, in addition to exploring a public-private partnership that would relieve the state and taxpayers from shouldering future investments.
The potential bonding package would fund up to $30 million in each of the next two fiscal years to pay for upgrades and repairs to the downtown facility, a spokesman for House Majority Leader Matt Ritter (D-Hartford) confirmed Thursday.
A potential public-private partnership is also being looked at to spur future renovations at the 44-year-old arena, the spokesman confirmed.
The quasi-public Capital Region Development Authority (CRDA), which oversees the XL Center with Spectra Venue Management, discussed the potential state funding and public-private partnership Thursday night at its monthly board meeting, according to Mike Freimuth, the agency’s executive director.
Freimuth said David Lehman, the former Goldman Sachs executive leading the state Department of Economic and Community Development, has taken a lead role in tapping his Wall Street contacts to find potential investor groups that may be interested in pouring private capital into the XL Center.
Proving the state’s commitment to the facility would be key to any potential public-private relationship, Freimuth said Friday. That’s where the $30 million-per-year upgrades come into play.
“The $30 million each year is an expression that the public dollars are there and ready to go to work,” he said. “We are trying to understand the formula and allocate public money for things we have to do regardless.”
While the proposed two-year funding for the XL Center isn’t tied to the state striking a deal with a private investor, Freimuth said the plan is for public money to be used for operational upgrades to escalators, elevators, plumbing and other maintenance, and for private dollars to be used for revenue enhancers like better pricing options, seat accommodations, sponsorships and concessions.
Both chambers of the General Assembly and the State Bond Commission would need to approve any additional state funding for the venue, but it remains unclear what other approvals would be needed to get these plans into motion, Freimuth said. Those decisions will likely depend on the structure of any potential deal.
Moving forward, CRDA will be working on a market and demand analysis package to share with interested investor groups.Â
“It’s not as simple as hanging an ad and hoping people respond,” he said. “It’s more of a courtship and finding out how they match up to our needs.”
Still, the potential short-term funding wouldn’t address the long-term future of the 16,000-seat arena, which has become a hot-button topic at the state Capitol in recent years.
CRDA has lobbied for major investments in the aging arena, first proposing a $250 million state investment and then lowering its request to $100 million. The agency has also sought buyers to acquire and renovate the venue, which logs annual deficits of about $1.5 million to $2 million.
Although Gov. Ned Lamont has advocated for improving the XL Center as part of his agenda to improve downtown Hartford, his biennium state budget proposal in February didn’t allocate any XL Center funding.
Lamont, meantime, said he wants to cut state borrowing by 39 percent, which means less funding will be available for capital projects like an arena overhaul.Â
The governor’s office didn’t provide a comment regarding the potential funding.
Debate over the long-term future of the XL Center resurfaces nearly two months after the arena returned to the national spotlight as it hosted a series of first-round games during the 2019 NCAA Division I men’s basketball tournament.Â
The tournament was projected to generate at least $7.7 million for Greater Hartford’s economy, including $548,000 in sales tax revenues for the state of Connecticut.
CRDA and Spectra officials have said the Capital City won a bid to host the “March Madness” tournament, the second-largest postseason sporting event in terms of ad revenue, in part because of its $40 million upgrades at the XL Center over the last five years.
This story has been updated
