CANTLON’S CORNER: THE FUTURE OF THE XL CENTER IS DOWN TO THE HOME STRETCH
BY: Gerry Cantlon, Howlings
HARTFORD, CT – It’s an off-season of apprehension and happiness at the XL Center.
The apprehension factor just got a bit higher last week.
A key legislative committee for the state legislature that approves large-scale capital development projects, The Finance, Revenue, and Bonding Committee, made a recommendation to approve just $70 million over the next two years ($40 million in 2018 and $30 million in 2019). The original request was for $125 million, or half of the total $250 million said to be needed to renovate the 42-year-old building.
This procedural vote still must go to the full General Assembly for approval. Currently, the state has no place in the budget and the current negotiations are, not surprisingly, acrimonious and have broken down. The budget gap over the last year, seems to always be a floating number, has dipped even further into the red for this year. The State Budget office estimates the deficit has escalated for 2018 to a projected $2.3 billion and $2.7 billion in 2019.
CRDA Executive Director Michael W. Freimuth, despite not getting the result he wanted, maintains his confidence that this is the fifth inning of a nine-inning game.
“This is one step in the budget process. It does have to go before the General Assembly to be voted on and accepted by the Governor. There are a million moving pieces to the budget process. It’s not finished. It’s pretty obvious we have major budget issues ongoing. As of today, things are very unclear and we’re nowhere near close to final budget numbers. When the session ends then will be able to assess where we are and how to go forward.”
If the figure stays as is, and is not modified in any way, for Freimuth, it will represent a small victory in a very long-term strategy that has been structured because of the state economics.
“We have always thought this to be a four-year project,” Freimuth said. “The first year would be planning, design, and cost analysis needs to be done. This level of funding could allow that to start. Clearly, next year is absolutely critical. It’s when we have to prepare and begin the true, heavy lifting. The construction part needs to begin, and yes, we have to have the funding in place. We also have the expiration of contracts with our two main tenants, MSG and UCONN. That adds pressure to the situation no question.”
Freimuth admitted the budget battle, as well as the questions and concerns from the state legislators regarding the project, have now given the CRDA a new element to add to the equation—private financing.
“Given the economic realities we have before us, we are going to be studying and looking at our options in (the private financing) area. We are going to see what the marketplace is for this, and how it could be incorporated as part of this project.”
The state budget shortfall for the current fiscal year has now ballooned to $389.5 million after the April tax deadlines. This reflects a sharp decline in revenue for state government whose current budget year ends June 30th. The current legislative session is to end in little over a month from now, on June 7th. Continue reading