SLC Council approves sales tax for sports, entertainment district

Alixel Cabrera

(Utah News Dispatch) A 0.5% sales tax increase in Utah’s capital is just one step away from becoming official after the Salt Lake City Council unanimously approved a final deal with Smith Entertainment Group and a project area for a sports and entertainment district in the city’s downtown.

The council had voted unanimously in July to endorse the participation agreement the city had negotiated with Smith Entertainment Group, the parent company of the Utah Jazz and Utah Hockey Club. However, the process set by the Utah Legislature works like “a game of pickleball,” according to Salt Lake City’s attorney Katie Lewis, sending the deal back and forth between state and city entities.

The City Council also committed to continue collaborating with Smith Entertainment Group on a plan to preserve and renovate Abravanel Hall, the home of the Utah Symphony, at its current location. And, after listening to dozens of skeptical public comments, council members promised to remain vigilant throughout the process.

“Anything this large, anything this momentous, will require continuous vigilance,” Council Chair Victoria Petro said on Tuesday before the vote. “But in this participation agreement, we have the infrastructure and the scaffolding upon which we can rely and our constituents can rely.”

Petro referred to the public benefits established in the agreement, including a special account to support family-sized and affordable housing funded by a new Delta Center ticket fee, investment commitments to Japantown — a downtown stretch on 100 South in between 200 West and 300 West, the remaining piece of what was once a large community of Japanese Americans — in addition to workforce development initiatives specifically for low-income individuals, youth programming, and free and subsidized tickets.

After a legislative group approved the deal in September, it needed another nod from the council before making its way to Salt Lake City Mayor Erin Mendenhall’s desk. Since then, there have been changes, but nothing that modifies the substantive terms, Lewis said during the city’s work meeting earlier on Tuesday.

The action starts a process of notification to the Tax Commission to start collecting the increased tax from Jan. 1, 2025.

The tax to finance $900 million to renovate the Delta Center to equip it to host hockey games and to redevelop three downtown blocks excludes groceries and large purchases, such as cars. And the deal establishes penalties in case either the Jazz or the Hockey Club leave the city — including disputing the move in court, or a $250 million fine if both teams leave the Delta Center and $125 million if only one is taken out of the arena.

Smith Entertainment Group is also responsible for repaying the bonds if the teams leave, and repealing the tax wouldn’t be allowed because it’s already dedicated to the bond debt, Lewis said.

A divided public

The issue of economics and politics of directing public money to fund the arena reigned during the public comment hearing that saw more than 40 speakers on Tuesday speaking both in favor and against the proposed project and tax increase.

Residents cited research that indicates that sports stadium subsidies rarely yield economic gain, even taking into account social benefits, and urged the City Council to postpone the decision and to take the time to think about their votes.

“Given what we know about the economic impacts of stadium subsidies, I would hope that the City Council has data-driven answers for the public as to why they think that this subsidy will yield different results from all of the examples we have seen before,” Emma Marshall, a Salt Lake City resident, said during the meeting.

Rocky Anderson, a former Salt Lake City mayor who has been gathering signatures in opposition to the tax, said citizens would run a referendum to overturn the ordinance.

“If you can’t say no to this oppressive deal, then we the people will do it for you,” Anderson said.

However, members of different organizations welcomed the project, arguing that it would drive up the local economy.

Michele Corigliano from the Salt Lake Area Restaurant Association, for example, said that about 83% of the busiest days in downtown restaurants, which haven’t fully recovered from the COVID-19 pandemic, coincide with conventions.

“We would like to see a revitalized downtown. We think that this will do that,” Corigliano said. “And as grateful as we are to the conventions, we really want more locals to have a reason to come. And I think this will be it.”

Chris Nelson, chief university relations officer at the University of Utah said on behalf of the school’s president Taylor Randall that this is a valuable asset for students who need economic and job opportunities in the state.

“And for many of our scholars, scientists, researchers and health care providers, it represents a community where they want to live and work,” Nelson said.