SALT LAKE CITY — Utah’s capital reaches agreement with Smith Entertainment Group on a plan to completely transform downtown Salt Lake City to welcome the NHL and keep the NBA through a funding plan that includes a sales tax increase Almost agreed.
Salt Lake City Council members voted Tuesday to approve a resolution authorizing Salt Lake City Mayor Erin Mendenhall to enter into partnership agreements with the owners of the Utah Jazz and Utah Hockey Club.
The agreement allows Smith Entertainment Group to raise up to $900 million in bonds, which will be used to finance the renovation of Delta Center and several other projects in the new sports, entertainment, cultural and convention district near the arena. The money will be used to cover the costs of the project.
The City Council also approved a 0.5% sales tax increase over the next 30 years to raise money for bond repayments. In return, Smith Entertainment Group plans to implement a new $1 to $3 ticket fee that will go toward affordable housing and projects in the zone, as well as other benefits to the city. .
A third public hearing on the issue resulted in a down vote, where the proposal garnered support from a few prominent business owners but scorn from several residents and celebrities.
They include former Salt Lake City Mayor Rocky Anderson, who has launched a referendum effort against the deal and said residents could vote on a ballot to decide the deal’s future. .
“If we can’t say ‘no’ to this oppressive deal, then our people will do it for us,” he said.
How we got here
Tuesday’s voting results weren’t all that surprising. The City Council voted unanimously on July 9 to approve the agreement, allowing it to be sent to the Utah Revitalization Zoning Commission for review and approval. The City Council also approved a zoning change to make way for the project around the arena.
The state commission last month issued several caveats, including that groups work to ensure Abravanel Hall, which is on the National Register of Historic Places, is preserved in the event of any changes to the downtown area. Voted to approve the terms and conditions.
In March, the Utah State Legislature passed a bill (SB272) that establishes the framework for an agreement between Smith Entertainment and Salt Lake City. It was created after the company’s owner, Ryan Smith, publicly expressed a desire to bring an NHL expansion team to Utah.
It happened in April. NHL Commissioner Gary Bettman said the league began negotiations to buy Smith from the Arizona Coyotes about a week after the bill was passed. The Coyotes’ owners were having trouble finding a permanent arena for the club, leading to the league’s intervention.
At a press conference celebrating the team’s acquisition and move to Utah, Smith explained that he originally intended to build a new arena outside Salt Lake City that would likely be home to the hockey club and the Jazz, but that He said: Coaches tried to talk him out of it, and he focused on renovating the Delta Center to accommodate both teams.
SB272 was created to help fund the change. If the two sides reach a partnership agreement, Salt Lake City would be given up to a 0.5% tax increase and Smith Entertainment Group could raise up to $900 million in public funds to fund its efforts. Approved.
Smith applied for a contract shortly before acquiring an NHL franchise. The two sides spent months negotiating an agreement ahead of a July primary vote on a site that would significantly change downtown Salt Lake City.
The plan also calls for a major renovation of the Salt Palace Convention Center, excavating 100 South, currently buried under a vast site from West Temple to 300 West, and renovating the arena’s east entrance. It can also be turned into a public plaza outside.
It also calls for a hotel and high-rise building to be built within two blocks east of the arena.
“What I want to say about this agreement is that Smith Entertainment Group is committed to two teams downtown and is also committed to revitalizing and building three blocks of downtown (area) in exchange for public investment. “It’s unique in that way,” Salt Lake said. City Attorney Katie Lewis, who co-led much of the city’s negotiations, spoke at a meeting earlier Tuesday.
“A lot of the public investment we’ve seen nationally has been for just sports arenas, and in some cases just for one team,” she says.
However, there was a lot of opposition to this plan from the beginning. One prominent national sports economist said that while lawmakers are considering SB272, there is “little evidence that sports venues are driving the type of commerce needed for downtowns to thrive.”
Some discontinued their comments during lengthy public hearings on the plan held before the July vote. Some have questioned why a billionaire like Smith would need public funds to carry out the project, and agreement negotiations are progressing based on a Sept. 1 deadline set in the bill. Some criticized the speed.
But most expressed concern about the future of Abravanel Hall, home of the Utah Symphony Orchestra since it opened in 1979. As Salt Lake County considers demolishing and rebuilding its aging concert hall, groups have banded together to advocate for the building’s preservation.
The backlash prompted the county to adjust its plans to focus on preserving the building. Similar plans to preserve what remains of historic Japantown have been put in place over the past few months.
divided room
The sales tax received the most backlash before Tuesday’s vote. One person brought a large sign to the meeting that read, “SEG Opposes Sales Tax Increase.” Shopping will be done outside SLC. ”
Beyond the potential referendum, some are concerned about rising costs and say without a sales tax, consumers could flock to South Salt Lake, West Valley City and other nearby cities.
Resident Jeff Novak said the project may not even require a tax increase. He believes the 2034 Winter Olympics will attract state, federal, commercial and private funds that can be used to revitalize downtowns without raising sales taxes.
Representatives from the Utah Restaurant Association, Salt Lake City Downtown Alliance and the University of Utah spoke in favor of the deal, saying it would revitalize the city.
Michele Corigliano, director of the Salt Lake Area Restaurant Association, said downtown has needed help since the coronavirus pandemic changed consumer trends. She said downtown businesses rely on conventions and events to stay in business.
“We want to see a revitalized downtown, and we think this will help us do that,” she said. “Downtown is really suffering.”
Salt Lake City Council President Victoria Petro said she understands the concerns, calling it one of the most troubling issues the city has encountered since taking office in late 2021. But she believes the city has taken the time to complete a “thorough” review of its policies. Partnership agreement.
Salt Lake City Councilman Alejandro Puy added: “This is obviously a critical time.” “While it’s hard to quantify, the death of downtown means less sales tax coming to Salt Lake City, less revitalization, and fewer jobs. Many cities across the country are seeing this. … We hope this agreement will bring even more vitality to the downtown area.”
what happens next
Despite everything that has happened in the past six months, the process is not over yet. Mr. Smith and Mr. Mendenhall are expected to sign a partnership in the near future. The sales tax is valid for 30 years and will take effect on January 1, 2025. It applies to many items citywide, but not to groceries.
However, the agreement still relies on several land lease agreements tied to the participation agreement. Salt Lake City leaders must approve a lease extension for the block where Delta Center is located.
Smith is also seeking a land lease with Salt Lake County for two blocks east of Delta Center, where the company wants to create a district outside the arena. Lewis added that the company has indicated to the city that it is negotiating a lease with Salt Lake County.
Both agreements need to be reached by mid-2025, with the renovation process expected to begin in earnest around that time. If both agreements are reached by then, Smith Entertainment Group will begin implementing new ticket fees for the city fund, ranging from $1 to $3 per ticket.
In addition, Salt Lake City is also working on a development agreement with Smith Entertainment Group that will outline building plans within the district outside of Delta Center.
“This is the first step in a 30-year relationship with the development of these three city blocks and a commitment to keep these two sports teams downtown,” Lewis said of the participation agreement.
The agreement also includes penalties against Smith Entertainment Group if the team relocates over the next 30 years.
Lewis said if both teams pull out, the company will be responsible for repaying the remainder of its bond debt and will face other remedies. This is not the case if one team moves, which means the experiment between the two teams fails.