For the first time in the 40 years I’ve lived in Hartford, the Capital City has a strong trajectory into the future. The recent opening of the UConn Hartford campus with 2,500 students downtown; the upcoming 17 trains per day to New York City; the 1,000 new and occupied apartment units with new residents; all are contributing to a new sense of place, of purpose, of hope.
Yet, while I can touch and see these changes, something less obvious and perhaps not as tangible is happening. The 150 events per year at the XL Center, including UConn women’s and men’s basketball and UConn Hockey East, AHL games and family events, are at risk, undermining the work of the last five years to re-position the city center.
Since the Capital Region Development Authority (CRDA) is charged with overseeing the XL Center, it seems appropriate for us to provide information concerning the potential shut down of the XL Center and the ramifications to the Greater Hartford region.
This particularly difficult and frustrating question arises from the decisions inherent within the recently passed state budget that not only reduces the subsidy to operate the building, one which the state has contributed for nearly 25 years, but also the General Assembly’s budget re-establishes an admission tax on the building, taking additional cash from its operations while increasing the costs of doing business in the building. (Gov. Dannel P. Malloy vetoed the budget Thursday, but future funding the XL Center remains uncertain.) The resulting decrease in its competitiveness with other buildings in its market has but one consequence: less events.
First, it’s important to understand the XL Center’s role as an economic engine for downtown Hartford and what that means. The XL Center attracts 600,000 people annually to events held on an average 150 days per year. This translates into parking revenues, new tax generation (sales, payroll, hotel), restaurant sales and ancillary employment throughout the downtown area.
Thirty-seven downtown businesses recently signed a letter to CRDA that their downtown businesses depend on the XL Center. Two businesses recently invested over $6 million in properties across the street from the XL.
Second, there are over 90,000 people in the downtown workforce, one that draws from the region but also draws from the nation as a whole. Local corporations and partnerships have made it clear that a vibrant downtown is essential to their ability to attract young people to work.
The GE and Aetna decisions to go to more vibrant cities crystallizes a concern within the corporate community that the Capital City needs to be able to attract the next generation of workers. Once even a small part of the workforce begins to relocate to other more vibrant cities, the impact begins to ratchet itself throughout the region, leading to the sales of homes and the stagnation of suburban real estate markets.
It’s all too easy to imagine downtown businesses closing, a declining workforce in the Greater Hartford region, declining housing prices in the region, and apartment vacancies starting to rise. Why would you want to begin to unravel the process that has begun to specifically create a vibrant business center?
After 40 years of contributing to the community, the building is obviously in need of a renewal. When parts fail, they no longer can be repaired or replaced as the original suppliers no longer even exist.
Modern building systems, IT networks, audio-visual presentation, even lighting are all vastly more cost efficient and advanced today than they were in the mid-70s. Nor is the building up to the standards of the industry, missing club seating, concession options, experiences such as children areas and fan zones, not to mention the increased security demands for large public assemblies in today’s world.
When the roof collapsed in 1978 there were 12,500 seats in the XL. Today, it has more than 15,000 seats but without additional restrooms or additional revenue producing concessions to meet its increased size. Simply, there is little economic sense in investing in repairs year after year just to make up for deferred maintenance without improving the building’s event profile, its fans’ expectations, its revenue potential or its structural operating deficit, something the “transformation strategy” adopted by CRDA last year addresses.
But if there is no end goal to renovate the facility and it’s to be starved of the operating cash necessary to simply keep the doors open, then CRDA confronts the reality to start the process of closing it down. Before we do that, however, we thought it important to lay out some of the ramifications to the region as a whole.
Suzanne Hopgood is the chairman of the Capital Region Development Authority tasked with directly investment into the central business district of Hartford.
