March 22, 2007
By JEFFREY B. COHEN, Courant Staff Writer
There was the half-billion dollars it already has invested in the city. There was its promise to save the state $2 million a year.
But in the end, what pushed the winning bid to run the Hartford Civic Center over the line was what one official called "the intangible."
"They had a level of excitement about them for their future," said Richard T. Mulready, vice chairman of the board of the Connecticut Development Authority. "And about Hartford and its potential."
In a decision that caught some by surprise, the authority on Wednesday picked a partnership between downtown's largest property owner and a worldwide sports and entertainment company to take over the 32-year-old arena.
If the deal is signed by the end of the month, the partnership of Northland Development Corp. and AEG Worldwide of Los Angeles would run the arena from this summer through 2013.
House Speaker James A. Amann said he had been betting that the authority would stick with the center's current operator, Madison Square Garden. Others pushed a plan led by former Whalers owner Howard Baldwin that would have been attractive because of his name recognition and the experience of his partners, Global Spectrum.
But in a decision that leaves the immediate future of professional hockey in Hartford unclear, one board member said that Northland chief Lawrence R. Gottesdiener and his team were the only ones that put "their money where their vision is." The vote was unanimous.
"Northland Development has so much skin in the game ... that they are orders of magnitude above everyone else in terms of the incentive to make this thing successful," said board member Michael A. Cantor. "To me, it's a very clear choice."
This is the beginning of the end of a process that began in late 2005, when the state - concerned that it would lose more than $3.5 million a year through 2013 on its lease of the city-owned arena - decided to test the market and see if anyone could do better.
When it came to managing the arena, each of the three interested bidders brought an array of proposals, from capital and concession improvements to strategies to boost attendance. For his part, Gottesdiener has said that his long-term goal is to knock the arena down, build a new one and bring the NHL back to Hartford.
But for all the talk of a new arena and the NHL, Wednesday's decision was a limited one that dealt only with the arena operation through 2013.
The winning plan was one of two that Gottesdiener submitted and was entirely different from the other three. Instead of offering to contract with the authority to run the center, as is the current practice, Gottesdiener offered to assume all aspects of operations - including the lease with the city.
This plan would put all risk and all potential upside in Gottesdiener's hands - if the center loses money, it's on his dime; if it makes money, it's his to keep.
The deal has yet to be worked out and still needs city approval or a guarantee that the state won't be liable for the rent to the city. Should the deal fail to be completed by the end of the month, the state will revert to MSG's proposed plan. That is seen as an unlikely scenario.
Still somewhat unclear is the immediate future of hockey in Hartford. The Wolf Pack is owned by the now-outgoing MSG. Mulready said that the only scenario in which there would be no hockey in Hartford next year was if MSG decided that it would take its team from the arena and not play elsewhere, essentially keeping its right to the Hartford market.
And Gottesdiener - who has long lamented the New York ownership of a New England hockey team - said that it's up to the Wolf Pack if they want to stay another year.
"We don't control the market, MSG controls the market; it will be their call whether they want to stay here," Gottesdiener said. "We want to make sure there's continuous hockey, uninterrupted, period. Be it the Wolf Pack or somebody else."
Mulready went out of his way to compliment MSG for its work and to say that it had managed the facility well. He also said that MSG had previously promised a smooth transition for the contract that expires this summer, and added that he thought some of the current arena management might be hired to stay on.
It was unclear Wednesday what these changes might mean for Rentschler Field in East Hartford, which is also managed by MSG.
Mayor Eddie A. Perez said he was "cautiously optimistic" that the city would approve the transfer of the arena's lease from the authority to Northland/AEG.
"We've had a good relationship with Larry Gottesdiener and his team in Hartford," Perez said.
Reprinted with permission of the Hartford Courant.
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