An un­fin­ished sta­dium sym­bol­izes Hart­ford’s woes

A project to re­vive the city with a ball­park runs up against re­al­ity “This was just a lot worse than I had planned on”

Bloomberg Businessweek (Europe) - - CONTENTS - Kate Smith Edited by Al­li­son Hoffman

The Yard Goats, the Dou­ble-A af­fil­i­ate of the Colorado Rock­ies, had hoped to open their 2016 sea­son at the new $63 mil­lion Dunkin’ Donuts Park. In­stead, be­cause of a fis­cal cri­sis in Hart­ford, their new home­town, the team is play­ing on a bor­rowed field about 40 miles away.

On May 27, Hart­ford Mayor Luke Bronin an­nounced the city could no longer af­ford to cover the cost of con­struc­tion de­lays at Dunkin’ Donuts Park. Hart­ford re­cently cut ser­vices and raided its rainy-day fund to close a $50 mil­lion bud­get gap for the 2017 fis­cal year, which be­gins July 1. Now, Bronin is mak­ing a claim against the in­sur­ance bought by builders Cen­ter­plan Con­struc­tion to guar­an­tee the sta­dium would be com­pleted. “The de­vel­oper is re­spon­si­ble for any costs be­yond what we ap­proved, and there were quite a few,” Bronin says.

The sta­dium, born out of an idea to re­vi­tal­ize Hart­ford’s des­o­late north side, isn’t what caused the city’s bud­get prob­lems. As Con­necti­cut’s cap­i­tal, Hart­ford is home to a large num­ber of pub­lic build­ings; half of all prop­er­ties in the city are tax-ex­empt. To com­pen­sate, the city has raised busi­ness taxes, which are now higher than in any neigh­bor­ing city.

Bronin’s pre­de­ces­sor, Pe­dro Se­garra, in­sisted the sta­dium wouldn’t just pay for it­self but also gen­er­ate rev­enue for the city. He over­saw the cre­ation of the Hart­ford Sta­dium Au­thor­ity, which is­sued $56 mil­lion in mu­nic­i­pal bonds in 2015 to fi­nance con­struc­tion. In early Jan­uary, shortly af­ter Bronin took of­fice, Cen­ter­plan re­ported that it would re­quire an ad­di­tional $10.4 mil­lion to fin­ish the job in time for open­ing day. Bronin agreed to split those costs with Cen­ter­plan in ex­change for the builder fin­ish­ing the project by May 17, a dead­line it missed.

Bronin, a 36-year-old for­mer Rhodes scholar who grad­u­ated from Yale Col­lege and Yale Law School, ran for mayor on a prom­ise to look “un­der the hood” of the city’s de­te­ri­o­rat­ing finances. What he found wasn’t pretty. “I knew we were fac­ing some se­ri­ous fis­cal chal­lenges, but this was just a lot worse than I had planned on,” says Bronin, who served as a naval re­serve of­fi­cer in Afghanistan and worked for the U.S. De­part­ment of the Trea­sury be­fore re­turn­ing home to Con­necti­cut, where he was ap­pointed gen­eral coun­sel un­der Demo­cratic Gover­nor Dan­nel Mal­loy.

For the 2018 bud­get, Bronin an­tic­i­pates a $34 mil­lion short­fall, thanks to pay­ments on debt that are com­ing due. The gap bal­loons to $78 mil­lion by 2022. “The sta­dium isn’t the straw that broke the camel’s back here,” says Melissa McCaw, Hart­ford’s di­rec­tor for man­age­ment, bud­get, and grants. “It’s just some hay that was dumped on a crip­pled, half-dead camel.”

Cen­ter­plan says it wasn’t able to meet its dead­line, in part be­cause of changes the city re­quested, in­clud­ing the in­stal­la­tion of a barn-style door in a lux­ury suite. The com­pany has threat­ened to walk off the job un­til the in­surer, Arch In­sur­ance, com­pletes its eval­u­a­tion of the city’s claim. Cen­ter­plan prin­ci­pal Ja­son Rud­nick es­ti­mates that could take any­where from six to nine months. If Arch sides with the city, the in­surer will cover as much as $47 mil­lion to com­plete the ball­park.

McCaw says that with the sta­dium un­fin­ished and no new rev­enue sources avail­able, the city may need to lean on the state for help: “I re­ally just have no idea how we’re go­ing to close that bud­get gap.”

The bot­tom line Hart­ford, which re­cently strug­gled to close a $50 mil­lion bud­get gap, is re­fus­ing to cover cost over­runs at its new ball­park.

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