Global Spectrum Wins Contract Approval For XL Center, Rentschler
By KENNETH R. GOSSELIN
April 26, 2013
Final approval of Global Spectrum's contract to manage both the XL Center in Hartford and the Stadium at Rentschler Field in East Hartford has cleared the way for new stewardship at the two venues.
Global Spectrum will be paid annual base and incentive fees for each venue under a 10-year agreement, according to a summary of the terms of the two contracts provided to me by the Capital Region Development Authority.
The authority gave its final approval to the contracts late Thursday.
At the XL Center, Global will be paid a base management fee of $360,000 the first year. Increases in the following years will be based on increases in a leading measure of inflation.
In addition, Global will earn an annual incentive fee for managing XL: 10 percent of the XL's net operating income falling between $1 million and $2 million; and 20 percent of the XL Center's net operating income above $2 million. There is no incentive if net operating income does not reach $1 million.
In the past, annual net operating income has generally ranged between $2 million and $2.5 million, CRDA executive director Michael W. Freimuth said Friday.
At Rentschler, Global will be paid a base management fee of $100,000 in the first year, followed by increases in the following years based on the inflation index.
Also, Global could qualify for an incentive fee for managing Rentschler. It would be equal to 25 percent of rent, ticket surcharge, parking, concessions and broadcast revenues if they exceed an as-yet undetermined benchmark based on gross revenues and expenses.
Global is scheduled to take over management of XL from AEG Management CT on Sept. 1, but negotiations are under way to move that up to July 1. Global is taking over Rentschler on July 1.
Rentschler is now managed by Bushnell Management Services, an arm of Hartford's Bushnell Center for the Performing Arts.
Before the contracts could be finalized, the CRDA had to sign a lease for the XL Center with the city of Hartford.
The CRDA hopes Global will boost the variety of events at both venues, increasing income, part of which could be used for capital improvements, particularly at the nearly 40-year-old XL.
Global has agreed to contribute $2.75 million "out-of-pocket" for capital improvements.
Reprinted with permission of the Hartford Courant.
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