Hartford Approves Lease Agreement On XL Center

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My colleague Jenna Carlesso reports:

The council has given city leaders the green light to enter into a lease with the Capital Region Development Authority to manage operations of the XL Center.

The XL Center would be leased to the state under a proposed 10-year agreement that guarantees the city annual payments of $3 million in the first two years, the state’s budget director has said. The agreement is necessary so the CRDA can finalize a contract with Global Spectrum, which has been chosen to manage the XL Center for the next decade.

The city council approved the proposal at its meeting Monday.

Michael W. Freimuth, executive director of CRDA, said the development authority expects to complete the contract with Global Spectrum and, in turn, the American Hockey League by its April 25 deadline.

The lease begins July 1, the start of the next fiscal year.

Initially, it was thought that the city would transfer ownership to the state. But the prospect of the state ending its “PILOT,” or payment in lieu of taxes program — proposed and supported by Gov. Dannel P. Malloy — would have meant an abrupt end to payments to the city from the XL Center property, Ben Barnes, the secretary for the Office of Policy and Management, has said.

The state doesn’t pay property taxes to buildings it owns in towns and cities, instead compensating for some of that lost revenue through PILOT.

The city has received between $2 million and $2.5 million a year in lease payments under a soon-to-expire, 20-year lease agreement with the state.

 

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