Global Spectrum to run the XL Center and Rentschler Field
By Mike McGarry
February 21, 2013
If it had not been for the Newtown tragedy and the recent blizzard, the picking of an operator for the two big taxpayer investments: the XL Center in downtown Hartford and Rentschler field in East Hartford would have been a subject of much more public discussion.
As it was, the Hartford News and the Hartford Courant did discuss various aspects. Jeff Jacobs, sports writer at the Courant, was critical of the process and its secrecy and when Global Spectrum was finally picked, the Courant did run a front page story. Articles in the News tended to be suggestions about more public use and participation. Not mentioned yet was that the public will get a chance for input when the city council holds hearings on the next step – handing over the XL Center to C.R.D.A.
Three main points were stressed in the RFP for both facilities:
• AHL Presence: The league and the current team indicated that they want to stay in the Hartford market with either of the CRDA finalists – AEG or Global.
• Capital investment in the buildings, particularly the XL Center is critical. Global presented the largest corporate investment and capital reserve within the the financial proposals (a NPV of $8.3 Million). The capacity of such an amount can drive bonding in excess of $20 million in building improvements.
• Economies joint operation of both Rentschler and XL Center were significant, effectively requiring a decision to select one operating entity rather than two.
As a consequence, Rentschler annual operating economies of over $300,000 better than current operations can be achieved benefiting UCONN and the building.
Three finalists were “scored” for consideration: AEG, Global and Bushnell Management. C.R.D.A. had a scoring cross-hatch that covered everything from securing the AHL to risktaking and Global scored much higher than AEG or the Bushnell Management in most categories. For example, the “growth in events” score was: BMS – 7, AEG – 14, and Global – 21.
The biggest factors in all of this in the second round, after the scoring, were:
• Operating Pro Forma for 5 and 10 year periods
• Capital Investment, both direct from bidder and generated via NOI
• Compensation formula, including base fees, incentives, revenue sharing
• AHL commitment
Global excelled in all the factors. For example, Global’s fees for the first year of running the rent were $125,000 vs. AEG at $371,000. Other fees and investments had similar bias toward Global. Global, also, had the power and influence of Comcast/NBC Universal, part of Comcast spectator, the umbrella organization of four companies in the field, from food to ticketing. Strong, new players that promise a new look at everything.
The presentation by Frank Russo was reportedly superior to all the other bidders. He understood that the two facilities will have to work closely together with booking, promotion/advertising, shuttles, buying, etc… It’s obvious to observers that once the field loses parking (4,000 spots to retail) that an opportunity presents itself to tie in downtown with the events at Rentschler’s Field.
CRDA will certainly have its hands full in the coming year. The Science Center, the Marriott Hotel, the Convention Center, and the Spotlight Theatre seem to be a degree successful and with new additions, a music hall, a restaurant and new housing coming, excitement is in the air.
Michael Freimuth, Executive Director of CRDA, said, “The Convention Center had a banner year in 2012 and is running ahead of its projections for events in 2013. The adjoining Front Street mixed use residential and retail project has advanced with the opening of the Spotlight Theatres and Bistro, the construction of Capital Grille and the soon to be built Infinity Music Hall. The new year will also see the construction of the first residential building within the development area to compliment the Marriott and the Science Center on Hartford’s riverfront.”
One troubling factor is the lack of any major campaign to promote the city out of market. With all this investment, now and coming, continued success of all these facilities will take a broadening of the trading area well beyond Avon.
Frank Russo seems to have the personality and the vision to fulfill his efforts to get back into the market. However, unless the other major players in the hospitality game step up to the plate, Global can’t do it alone. Time is short, they take over the Rent, July 1st.