A new study requested by Gov. Ned Lamont’s office and UConn says new and reconfigured seating at downtown Hartford’s XL Center would significantly improve the aging arena’s financial status, but still not draw interest from outside investors or many more events.
The nearly 200-page study by Texas-based consultancy Conventions, Sports & Leisure International (CSL) recommends adding 1,000 “event level” and “concourse club” seats, 52 “loge” seats and 42 small group boxes and luxury suites at the XL Center. Implementing the modernized, luxury seating closer to the floor could generate an additional $3.6 million in gross revenue for the 16,000-seat arena, the study says.
CSL’s market demand study says the potential renovation would encourage consumer and event growth, helping slash the XL Center’s annual operating losses from $2 million to $3 million down to an estimated $482,000 by 2024.
However, the study’s plan has a few caveats, including that it would only likely draw three new events a year to the facility, and would not attract private investors to the project, it says.
Also, the revenue projections are factoring a scenario where CRDA buys and activates a key section of XL Center’s atrium and adjoining retail/office space from prominent Hartford developer-landlord Northland Investment Corp. But those negotiations have been ongoing for years.
Still, that didn’t shy CSL from recommending major investments for the 45-year-old facility.
“One of the most important things we found was a renovation of this facility is needed in order to maintain your current event load,” CSL Project Manager Adam Kerns said during the Capital Region Development Authority’s (CRDA) board meeting Thursday night. (XL Center is operated by CRDA and Spectra Venue Management, a subsidiary of Comcast-Spectacor.)
“This has an impact on revenue generation, spectator amenities, and artist amenities, which influences someone’s decision to come back and play the venue,” Kerns said.
The study didn’t specifically say how much its proposed improvements would cost, but policymakers lately have been discussing a potential $100 million investment in the aging arena, which is approaching the end of its useful life.
Lamont unveiled a revised fiscal year 2021 budget plan that sets aside $55 million in bond funding in the current fiscal year and the next to renovate and improve the arena. Both chambers of the General Assembly and the State Bond Commission would need to approve the proposed borrowing for the venue.
The proposed public funding option, though, would fall short of addressing the long-term future of the facility, and state lawmakers in recent years have been unwilling to back major investments there.
The XL Center study was requested last year by the governor’s administration and UConn, which is especially concerned about the venue’s future due to its men’s and women’s basketball team’s move to the Big East Conference next year.
CSL, which has examined some 2,000 sports and entertainment facilities nationally, spent the last four months estimating market demand for new premium seating at a potentially renovated XL Center, and projected how much more revenue those upgrades could generate. Kerns on Thursday did not estimate what its recommended plan would cost, but said building a new arena to replace XL Center could cost between $500 million to $600 million.
The study also notes CSL conducted an online survey that collected 2,494 responses via the XL Center, UConn and the MetroHartford Alliance.
Survey findings show that 88% of respondents had a “positive attitude regarding a potential XL Center renovation,” and 21% were “somewhat positive,” and 3% and 2% were “very negative” or “somewhat negative,” respectively. Another 7% were “neutral” about funding a renovation.
Respondents cited potential barriers to attending one of the 160 annual events at the XL Center, including “lack of event interest” (50%), arena condition and event timing (24%), family commitments (23%), and work and difficulty parking (21%), among other deterrents.
“Limited respondents expressed concern over funding and the perceived benefit of such an investment, while the vast majority of respondents feel an improved XL Center is an important priority to showcase Hartford and revitalize the downtown city center,” the study says.
Kerns said CSL also solicited feedback from in-person interviews and focus groups with “corporate decision makers,” UConn donors and other buyers outside the market that attend games at the XL Center.
A majority of those participants, he said, agreed the arena is “a vital community asset,” and that they preferred premium seating near the floor as opposed to the existing Champions Club lounge on the upper level of the facility.
“Sky box really meant a box up in the sky,” he said. “That’s not what we do anymore. We take the best inventory and we put it in the best locations and we drive market supportable prices.”
Kerns said his firm only recommends eliminating a small number of seats to avoid impacting the arena’s large capacity, which is crucial in securing big-ticket concerts. XL Center’s seating capacity, he said, gives the venue an advantage over smaller competitors in the region, including the 10,000-seat Mohegan Sun Arena and Springfield’s 8,000-seat MassMutual Center.
“Maintaining your capacity is extremely important,” Kerns said. “Those 16,000 seats is what separates this venue from others in the marketplace.”
