CRDA offered Northland $4.5M for XL Center space

HBJ Photos | Joe Cooper The XL Center in downtown Hartford.

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The Capital Region Development Authority (CRDA) earlier this summer offered $4.5 million to purchase a key portion of XL Center's atrium and adjoining retail space currently owned by Northland Investment Corp., the Hartford Business Journal has learned.

Northland, however, rejected the bid, arguing it was a low-ball offer, officials said.

The purchase attempt represents the latest wrinkle in an ongoing saga to try to determine the future of the XL Center, including the space owned by Northland.

Negotiations between CRDA and Northland reached a tipping point last year when, after several failed purchase attempts, CRDA considered using eminent domain to take over Northland’s entire XL Center space, which includes the aging facility’s atrium, retail and office space and other areas.

CRDA backed off that threat, however, after a group of Republican state senators raised concerns about the potential move.

The latest $4.5 million purchase offer in July included less space than CRDA previously sought, according to Mike Freimuth, the quasi-public agency’s executive director.

According to a July 29 letter CRDA sent to Northland, the $4.5 million purchase offer was for XL Center’s “atrium area, the retail space on the first floor,” elevator and escalator systems on the second and third floors and the Church Street overhead bridge.

The purchase offer, which CRDA says was based on independent appraisals, did not include commercial space on the second and third levels, or parking spaces in the adjoining garage to Hartford 21, which Northland built and owns.

Northland Principal Larry Gottesdiener did not comment for this story but previously told HBJ he is not interested in carving up his XL Center holdings, which could eventually benefit from either a redeveloped arena or a new mixed-use development in the area.

Gottesdiener also previously noted that more than $200 million was invested in the area around XL Center, including the Hartford 21 apartments. Northland alone invested $65 million of that money, he said.

CRDA has said the XL Center property owned by Northland is crucial to the short-term operations and long-term redevelopment of the arena.

CRDA, however, has failed to convince the legislature on several occasions to provide funding for a major arena renovation.

CRDA a few years ago recommended a $250 million overhaul of the XL Center, concluding that the building's functionality and ability to generate revenue are severely limited by its age and obsolete design, among other problems.

State lawmakers, which have been battling budget deficits for years, balked at that price tag, forcing CRDA to eventually lower its ask to $100 million.

Lawmakers have not funded that request either, although tens of millions of dollars in renovations have been done on the facility since 2014.

There have also been attempts to sell the arena to private developers, but they haven’t come to fruition.

Meantime, CRDA at its recent September meeting agreed to rehire Texas-based consultancy Conventions, Sports & Leisure International to perform a new market demand and financial feasibility study of the venue.