OLR Research Report


November 12, 2008

 

2008-R-0592

CAPITAL CITY ECONOMIC DEVELOPMENT AUTHORITY

By: Rute Pinho, Office of Legislative Research

Kerry Kelley, Office of Fiscal Analysis

Linda Miller, Office of Fiscal Analysis

You asked about the history of the Capital City Economic Development Authority. You wanted to know (1) its statutory charge, (2) the roles it has played in regional and city development projects, and (3) the amount of operating and bond funds it has received from the state.

SUMMARY

The legislature established the quasi-public Capital City Economic Development Authority (CCEDA) in 1998 to plan, manage, and oversee six Harford redevelopment projects. The projects were devised as part of a blueprint for Hartford's revitalization prepared by a special gubernatorial advisory group studying the city's economic development. CCEDA also took over the project management for Adriaen's Landing, a proposal for an urban entertainment district in downtown Hartford prepared by the Phoenix Home Life Mutual Insurance Co. In the years following its creation, the legislature made several changes to CCEDA's powers and the overall scope of the projects.

CCEDA's role as a project and construction manager is local, not regional, in focus. Its statutory charge is to stimulate new investment in the state, encourage the diversification of the state's economy, strengthen Hartford's role as a regional employment and government center, and encourage downtown residential development. It owns and operates the Connecticut Convention Center and the related central utility plant and parking facilities. It also oversees the convention center's sales and marketing efforts. It is governed by a seven-member board of directors appointed jointly by the governor and the six top legislative leaders. The board appoints an executive director, who cannot be a board member.

CCEDA'S PURPOSE AND GOVERNANCE

Statutory Charge

By law, CCEDA's charge is to:

1. stimulate new investment in the state;

2. attract and service large conventions, tradeshows, exhibitions, conferences and local consumer shows, exhibitions, and events;

3. encourage the diversification of the state economy;

4. strengthen Hartford's role as a regional employment and government center;

5. encourage downtown residential development; and

6. construct, operate, maintain, and market the convention center.

Board of Directors

CCEDA is governed by a seven-member board of directors appointed jointly by the governor and the six top legislative leaders. Board members must include experts in finance or commercial and residential real estate construction and, since 2003, a Hartford resident, recommended by the mayor, who holds no elected or appointed post. They serve four-year, staggered terms. The governor designates the chairperson. Table 1 lists CCEDA's board members from 2000 to the present.

Table 1: Board Membership from 2000 to Present

Position

2000

2003

2005

2006

Present

Board Chairperson

R. Bartley Halloran

R. Bartley Halloran

William McCue

William McCue

William McCue

Board Member

Mary Ann Hanley

Mary Ann Hanley

Mary Ann Hanley

Mary Ann Hanley

Mary Ann Hanley

Board Member

Eileen S. Kraus

Eileen S. Kraus

DeDe DeRosa

DeDe DeRosa

Luis Caban

Board Member

Anthony March

Anthony March

Anthony March

Anthony March

Anthony March

Board Member

Miguel Jose Matos

Miguel Jose Matos

Miguel Jose Matos

Debra M. Borrero

Margaret Buchanan

Board Member

G. Robert O'Brien

G. Robert O'Brien

Joseph Gianni

Joseph Gianni

Joseph Gianni

Board Member

Vacant

William McCue

Rodney Powell

Rodney Powell

Rodney Powell

Source: Auditors' Reports and CCEDA website

Executive Directors. The board appoints an executive director, who cannot be a board member. Table 2 shows CCEDA's executive directors, from 1998 to the present.

Table 2: CCEDA's Executive Directors

Service Dates

Executive Director

November 1998 – March 2003

Brendan M. Fox

February 2003 – April 2005

Charles P. Sheehan

April 2005 – March 2007

Annette Sanderson

March 2007 - present

James Abromaitis

CCEDA'S ROLE IN DOWNTOWN HARTFORD'S REDEVELOPMENT

Gubernatorial Advisory Group on Hartford's Economic Development, 1997- 1998

In December 1997, Governor John Rowland formed a special advisory group to design a blueprint for Hartford's economic development. The group's report, issued on March 16, 1998, identified “six pillars of progress…to revitalize and redefine the downtown [Hartford] area.” The six pillars included:

1. a rejuvenated civic center, including retail, dining, and museum facilities to accommodate regional attractions and stimulate a flow of activity across downtown;

2. a highly developed riverfront;

3. a downtown higher education center featuring a community college;

4. an appreciable increase in the number of convenient and inexpensive parking spaces;

5. the demolition or redevelopment of vacant structures throughout the city and the development of at least 1,000 downtown housing units geared towards emerging and maturing generations; and

6. a convention center and sports megaplex.

In conjunction with the proposed projects, the group estimated the approximate maximum state costs for the six pillars at $350 million over seven to 10 years. This, it believed, would result in a minimum additional $1 billion in city, federal, and private investment in downtown Hartford's development.

The group also recommended that, during its 1998 session, the legislature create a new oversight board to guide these projects to completion and “ensure the proper planning, management and progress of the above-listed projects.”

Concurrently, the Phoenix Home Life Mutual Insurance Co., headed by Robert Fiondella, a member of the governor's economic development advisory group, was developing its own proposal for an urban entertainment district in downtown Hartford (“Phoenix Keeping Lid on Plans,” Hartford Courant, March 22, 1998). Phoenix announced its plans for a $1 billion development plan in downtown Hartford in May 1998 (“Phoenix Chief Releases Development Plan Today,” Hartford Courant, May 13, 1998). The “Adriaen's Landing” proposal included design plans for a convention center and domed stadium complex, destination shopping, a 14-screen movie complex and other entertainment, a new connection to the Connecticut river through a tunnel under I-91, and housing to attract young professionals and empty-nesters to the city.

CCEDA's Establishment, 1998

The legislature established the quasi-public CCEDA in 1998 to oversee the “six pillar” projects and allocated $300 million in bonds for them (PA 98-179). CCEDA's original development projects enumerated in PA 08-179 included:

1. a convention center and sports megaplex,

2. a downtown higher education center,

3. up to 1,000 newly constructed or rehabilitated housing units,

4. Civic Center and coliseum renovations,

5. expanded downtown parking, and

6. riverfront infrastructure and improvements.

The act required CCEDA to study the financial feasibility of building and operating a convention center and report on it to the General Assembly. (The legislature expanded the study in 1999 to include the feasibility of the sportsplex and parking facilities.) Among other things, the legislature authorized CCEDA to enter into contracts; issue bonds and other obligations; borrow money; and acquire, lease, and dispose of personal property. The act also gave CCEDA additional powers concerning the convention center project, including the authority to acquire land through eminent domain. It required CCEDA to coordinate all state and municipal planning and financial resources for projects and required state and municipal agencies to cooperate with it in its efforts.

With the exception of the housing units, the legislature designated a district where all of the Hartford projects were to be located. The district roughly encompassed the area between the Connecticut River from the Bulkeley Bridge south to, but not including, Dillon Stadium and Colt Park, and west to the State Capitol and the railroad right-of-way intersection.

In creating CCEDA, PA 98-179 also terminated the Connecticut Convention Center Authority, an authority the legislature established in 1989 to plan, build, and operate a convention center in Hartford. In doing so, the act shifted the portion of lodgings tax revenue that went to that authority to CCEDA and the Greater Hartford Arts Council. CCEDA was entitled to receive 90% of the lodgings tax receipts generated in Hartford from FY 09 though FY 03. (These receipts reverted to the General Fund in FY 04 (PA 03-1, JSS).)

CCEDA's Role in City and Regional Projects

CCEDA was established to plan, manage, and oversee economic development projects to revitalize downtown Hartford. As such, it has a local, not a regional focus. CCEDA, together with OPM, is part of the project team overseeing the development of Adriaen's Landing and other revitalization projects in Hartford. (CCEDA took over the Adriaen's Landing project development from Phoenix in 2000.) Figure 1 is a map of Adriaen's Landing, Rentschler Field, and other OPM and CCEDA projects.

Figure 1: CCEDA Projects

Source: CCEDA website

CCEDA owns and operates the convention center and the related central utility plant and parking facilities. It also oversees the convention center's sales and marketing efforts. OPM owns and oversees the Rentschler Field stadium and private entities own the convention center hotel. CCEDA is authorized to issue bonds, notes, and other obligations. As such, it has issued revenue bonds and loans for various projects. It has also secured federal grants for the projects (e.g., $10 in federal transportation grants for roadway improvements).

In the years following its creation, the legislature made several changes to CCEDA's powers and the overall scope of the six pillar projects.

Patriots Stadium. Connecticut officials negotiated an agreement with the New England Patriots in late 1998 to move the team to the state. As a result, in the December 1998 Special Session, the legislature authorized $250 million in state bonds to finance a stadium project for the Patriots (PA 98-1, DSS). The act designated CCEDA to prepare a written environmental evaluation of the overall project and allowed the Office of Policy and Management (OPM) secretary to delegate activities, responsibilities, and obligations to CCEDA if he believed that doing so would serve the project and CCEDA's projects.

UConn Football Stadium. PA 99-241 repealed the bond authorization for the stadium and the related laws, following Patriots owner Robert K. Kraft's decision to pull out of the stadium deal. The act also changed the scope of the original convention center and sports megaplex project. While prior law allowed the convention center project to include a sports megaplex, either as part of the same or as a separate facility in the economic development district, PA 99-241 allowed for the development of a sportsplex as a separate project and authorized the OPM secretary to make agreements with UConn with respect to playing its home football games there. The act gave the OPM secretary broad powers to plan, develop, construct, and operate the sportsplex.

Adriaen's Landing Master Plan. PA 00-140 implemented the master development plan for the Adriaen's Landing project and shifted control over the project's development to OPM. Under the act, the state would own the Adriaen's Landing and stadium sites; CCEDA would own the convention center; and private entities would own the convention center hotel and entertainment, retail, housing, and office facilities in the development district. The act relocated the UConn football stadium to Rentschler Field in East Hartford. It also authorized CCEDA to control parking facilities at Adriaen's Landing.

Science Center. Plans to add an attraction to the Adriaen's Landing project were finalized in 2001 when CCEDA announced a science center as part of the project. PA 04-2, May Special Session, authorized OPM and CCEDA to provide construction and financial management for the proposed Science Center of Connecticut. The science center's design, development and operations are run by a nonprofit, the Connecticut Center for Science and Exploration, under the auspices of OPM. CCEDA has provided financing for the project in the form of riverfront infrastructure bonds.

Entertainment District. CCEDA, in conjunction with OPM, entered into a development agreement for the retail and entertainment component of the Adriaen's Landing project. Once completed, the Front Street district, as it is commonly known, will be owned by the private developer, but CCEDA will retain ownership of the parking facilities. It has contracted with a third party to manage the garages and surface lot on its behalf.

Housing. CCEDA has also played a role in downtown residential development. For example, CCEDA funding supported, in part, the redevelopment of the former Sage Allen department store and the Trumbull on the Park development. CCEDA has also worked with the City of Hartford to provide a financing program for residential development in Hartford's neighborhoods.

CCEDA FINANCING

State Operating Funds

Table 3 shows state operating grants for CCEDA, from FY 99 through FY 09.

Table 3: CCEDA's State Operating Grants

 

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09 Budgeted

Occupancy Tax Receipts (1)

1,060,000

1,321,000

1,583,500

1,258,534

1,076,278

0

0

0

0

0

0

State Operating Grant to CCEDA

750,000

750,000

750,000

750,000

712,500

712,500

712,500

712,500

1,000,000

1,000,000

1,000,000

Convention Center Grants: Marketing & Management Expenses

0

0

0

0

0

4,200,000

2,805,813

5,500,000

6,900,000

6,900,000

6,900,000

Special Program Grant (2)

0

0

0

0

140,000

17,000

0

0

0

0

0

Notes:

(1) PA 03-1 June Special Session redirected proceeds of the room occupancy tax on Hartford hotel rooms from CCEDA to a revenue of the General Fund

(2) In FY 03 and FY 04, $50,000 and $17,000 was provided respectively from the Department of Economic and Community Development (DECD) to CCEDA which made grants to the Metro Hartford Alliance for the Hartford Image Project. Additionally, $90,000 was provided to DECD in FY 03 for a grant to the Civic Center for an environmental impact evaluation

State Bond Funds

Table 4 shows authorizations and allocations through September 1, 2008 for general obligation bonds and CCEDA revenue bonds for Hartford projects.

Table 4: CCEDA Bond Authorizations and Allocations

Bond Authorizations and Allocations for CCEDA Projects

Project

Total

Authorized

Total allocated
as of 9/08

Total

Remaining

 

($ mil.)

($ mil.)

($ mil.)

CCEDA Revenue Bonds

122.5

87.5

35.0

General Obligation (GO) bonds:

     

Convention Center

190.0

190.0

0.0

Downtown Higher Ed Ctr.

30.0

30.0

0.0

Demolition/Rehabilitation

25.0

25.0

0.0

Parking

15.0

12.0

3.0

Riverfront

25.0

9.6

15.4

Civic Center

15.0

15.0

0.0

Downtown Housing

35.0

35.0

0.0

Total

457.5

404.1

53.4

RP:dw