Philadelphia Group Picked To Run XL Center, Rentschler Field
Development Authority Awards 10-Year Contract To Global Spectrum In Unanimous Vote
By KENNETH R. GOSSELIN
February 07, 2013
HARTFORD—— Global Spectrum of Philadelphia, chosen Thursday to guide the XL Center in downtown Hartford and Rentschler Field in East Hartford through the next decade, said that an agreement keeping the AHL's Connecticut Whale hockey team in Hartford could come within days.
"We hope to have it locked up next week," Frank E. Russo Jr., Global Spectrum's business development chief, said in a telephone interview. "You only have so much standing when you're bidding. Now we have much more."
Although the Capitol Region Development Authority considered bids from companies interested in managing the two properties, two of the bidders were in talks with the hockey team owned by the New York Rangers trying to negotiate a new contract to replace one that expires in August.
The CRDA voted unanimously Thursday to give the contract to Global.
"The numbers tumbled best for Global," said Michael W. Freimuth, CRDA's executive director. "It is a change, and with change comes risk."
Global will replace the current manager of the XL Center, AEG Management CT. It won the contract over AEG and a group led by Bushnell Management Services, an arm of Hartford's Bushnell, which now manages Rentscher Field. In addition, the University of Connecticut had expressed an interest in managing just Rentschler.
The authority cited Global Spectrum's "out-of-pocket" capital investment proposal of $2.75 million for capital improvements that would be bolstered by another $1 million a year. That level of private investment would justify $20 million or more in state bonding, the authority said. An estimated $2 million that the state would reap from XL Center operations would go back into the 40-year-old building, much in need of upgrades.
The XL Center needs at least $16 million in improvements over the next decade just to sustain its operating systems. An investment of about $30 million is needed for upgrades, and a redevelopment would cost $100 million, according to estimates.
But Freimuth said that the prospect of securing the AHL for Hartford would be worth it. The Whale play a 40-game schedule and bring an estimated 140,000 people to downtown Hartford during a season. That not only benefits bars and restaurants, but adds to the perception that downtown offers a variety of sports and entertainment.
The contract is contingent on the group's securing an AHL affiliate for the XL Center, a central issue for those vying to manage the venue.
Global Spectrum will take over from AEG in September, and Russo said that his company envisions stepping up activities held before and after events, plus such improvements as premium seating in lower sections of the arena, expansion of the concourse into vacant mall areas and upgrades to food concessions.
AEG planned similar capital improvements, but what it was willing to contribute to capital improvements was far more modest and would only justify state bonding of about $9 million. Freimuth said that there also was some concern that AEG's parent, Anschutz Entertainment Group, was up for sale, raising questions about who ultimately would control the venues.
Global Spectrum's management fee for the XL Center was $721,000, compared with $846,000 for AEG, according to CDRA. Those fees are based on the present financial performance of the venue and can go up or down with its fortunes.
Chuck Steedman, AEG Management CT's general manager, said he was proud of the firm's achievements in the past six years.
"Under our stewardship, the XL Center now regularly books the most popular national concert tours and high-profile events such as the U.S. gymnastics championships and Boston Celtics basketball, while playing an integral role in the University of Connecticut's move to Hockey East, and accomplishing XL Center's ranking, for the first time in over a decade, on Pollstar's roster of the top worldwide arenas," Steedman said in a prepared statement.
Bushnell Management expressed similar sentiments about its three-year stewardship of Rentschler Field.
"Our desire to manage the XL Center was another important part of the work that we have been doing for many years to revitalize downtown as well as strengthening the Bushnell's future," said Michael Fresher, Bushnell's chief financial officer.
The authority made it clear from the start of bidding late last year that it wanted one manager to run both venues, seeing cost-saving and cross-marketing opportunities. Freimuth said he believed that a private firm would have more clout in attracting non-sports events to the venue. UConn said late Thursday that it looked forward to working with Global Spectrum.
And Rentschler, although just a decade old, will soon be in need of improvements and upgrades as well, Freimuth said.
Although Global Spectrum does not operate any venues in Connecticut, it has a strong local connection: Russo was executive director of the Hartford Civic Center — now the XL Center — from its opening in 1975 to 1983. His office is in Glastonbury.
Global Spectrum was created in 2000 when Comcast Corp. bought a majority interest in Globe Facility Services of Tampa, Fla. It operates more than 100 venues worldwide, including the MassMutual Center in Springfield, the Mullins Center at UMass-Amherst and the Wells Fargo Center in Philadelphia.
Hartford Mayor Pedro E. Segarra, a CRDA board member, said the decision was bittersweet because AEG had been a good corporate citizen in the city.
"But we are looking at a group that will put the XL Center in the best position it can possibly be," Segarra said after the vote. "We have a better opportunity for the capital improvements that are needed."
Reprinted with permission of the Hartford Courant.
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