The XL Center arena, located in Hartford, Connecticut, may reopen later this year with a large drop in revenue and much bigger operating losses, according to the Capital Region Development Authority (CDRA).
The CDRA, the semi-public agency that runs the arena, states the XL Center could face up to $5.8 million in operating losses in fiscal year 2021, nearly triple the $2 million annual loss the arena typically faces.
The arena faces the much greater operating losses because of the decrease in revenue from events, ticket sales, and parking fees and the results of other consequences of the economic shutdown.
Normally, taxpayers subsidize approximately half the annual loss from the arena’s operations.
“This is a significant change,” CRDA Executive Director Michael W. Freimuth told the agency’s board of directors at a teleconference June 25. “We know we won’t have concerts; that’s pretty much offline. Those are big paydays for us, generally speaking, but we should have the sports.”
Plans to reopen the 16,000-seat venue include social-distancing floor decals, one-way foot traffic, and hand sanitizer stations, among dozens of other options, XL Center General Manager Ben Weiss told the Hartford Courant.
The main problem the arena will have to resolve in order to reopen is how to arrange seating, according to Weiss.
“That one, at this point, is an unknown,” Weiss told the Courant. “We don’t know if there is going to be a limitation on capacity at the venue or whether there is going to be social distancing requirements as to how close people can sit. Everybody in the industry, really nationwide, we’re all waiting on that as each of our respective states makes those mandates.”
Freimuth told the board the main issue is how to operate the arena with such a drastic drop in revenue, especially if the state limits capacity or imposes other restrictions.
“To be honest with you, it’s a dart game,” Freimuth said at the board meeting. “And at this hour, we’re making our best guess and we’re tracking what the industry is doing.”
Hartford Mayor Luke Bronin says it would be better to shut the arena down for the year and go ahead with a $100 million renovation that has been in the works for years. The CDRA has $30 million in funds from the State Bond Commission to pay for renovations, and it received approval for another $65 million as part of a two-year bond package, but the commission may be hard-pressed to release those funds in the face of the pandemic.
“We know that this facility is on borrowed time without renovations,” Bronin said at the meeting. “We have an opportunity now, while the facility is dark, to begin those renovations. We should be using this moment to do everything we possibly can to make sure this facility comes back more competitive on the other side of the coronavirus.”
Opponents of the renovation say it would cost too much money, shutting down the arena completely would increase economic pressure on local businesses and restaurants, and in any case the state should get out of the business of running the arena.
CRDA has not set a deadline for its decision on the reopening.