CT sports and entertainment arena would get $45 million boost under legislative bill

A decade-old push to renovate downtown Hartford’s aging XL Center that recently suffered a setback amid rising costs could get a significant boost of as much as $45 million in state funding under a spending bill that cleared the state legislature late Tuesday.

The bill, which is now headed to Gov. Ned Lamont for his signature, increases the amount of funding the state is willing to spend on the renovation project, from $80 million to $125 million.

Last month, the Capital Region Development Authority, the quasi-public agency that is overseeing the renovation, said bids to renovate the sports and entertainment arena came in at more than $140 million. That was well above an estimate of $107 million, but also the combined state funding and private investment tentatively in place to finance the renovation.

The additional state funds would include some from CRDA and could potentially give the project — facing further downsizing — the chance to make significant improvements that will improve the profitability of the 16,000-seat arena which turns 50 next year. Easing annual losses at the arena — now about $2 million — is critical to attracting private investment.

“We’ve been walking the line between renovating the building versus rebuilding the business,” Michael W. Freimuth, CRDA’s executive director, said, in a text. “This allows us to focus on the latter.”

CRDA is now seeking a fresh set of bids, whittling away at some improvements to bring costs down.

The renovations are aimed at making the XL Center more competitive with new arenas to attract more events and carry it through another two decades. Supporters of the project see the arena as a major attraction for downtown, bringing patrons to local bars and restaurants.

Lamont has supported a significant upgrade to the XL Center, but only with private investment that would ease the burden on state taxpayers who would pick up the largest part of the tab.

The increase to $125 million does not change the existing requirement that a private investor contribute at least $20 million to the project. Los Angeles-based Oak View Group, which operates the XL Center on a day-to-day basis, is willing to invest.

OVG has a depth of experience in repositioning sports and entertainment venues. The organization manages 300 sports and entertainment venues globally and redevelops others.

OVG’s investment is tied strongly to attracting more concerts to the XL Center, events that are large money makers for modern arenas. But to draw more big-name concert bookings, renovations also will have to include relocation of the stage to increase the number of seats that have a unobstructed view of performers; build the overhead structure needed for modern light shows; and retrofit a loading dock at the back of the arena to move shows in and out more quickly.

If OVG agrees to invest, the organization would significantly expand its operation of the arena, including negotiating contracts with major tenants such as the University of Connecticut and paying for the majority of repairs to the building, excluding major big-ticket improvements.

The legislation calls for OVG to absorb any annual net losses at the arena, but it would keep the first $4 million in net profits. Above $4 million, net profits would be split between OVG and CRDA.

Even with the legislature approval, any increase in funding would still have to clear the State Bond Commission.

The current plan for the XL — downsized from $250 million a few years ago — concentrates on adding premium seating to the lower half of the arena, which command higher ticket prices.

The premium seating — includes “loge” seating off the concourse, club space under the stands and “bunker suites” at the event level — plus upgraded concessions are all intended to increase the arena’s revenue.

Technology also would be a priority to better accommodate electronic ticketing, phone app transactions and the heavy social media posting and texting during events.

Kenneth R. Gosselin can be reached at kgosselin@courant.com