In exchange for $900 million in public funding to renovate the Delta Center and build a sports, cultural, convention and entertainment district in downtown Salt Lake City, Smith Entertainment Group plans to charge a fee on tickets to Utah Jazz and Utah Hockey Club games, among other arena events, in an effort to create a public amenities fund for the city.
City Attorney Katie Lewis outlined key elements of a proposed participation agreement between the city and SEG to the City Council on Tuesday, a week ahead of a scheduled July 9 vote on the contract and an accompanying 0.5% sales tax increase.
The tax increase is expected to generate $1.2 billion over the 30-year life of the agreement, $900 million of which would go to SEG. The company estimates it will spend $525 million on the conversion to accommodate hockey and basketball and $375 million on other district improvements. SEG plans to invest $3 billion of its own money in the project.
Avoiding Past Mistakes
Mayor Erin Mendenhall said the partnership with SEG will keep both NBA and NHL teams in downtown Salt Lake City and “so much more.”
“We are the home of sports, entertainment, convention and culture, and this deal secures our position as such in the state of Utah,” she said, adding that urban centers across the country suffer without intentional investment. “With this deal, we secure the future of Salt Lake City for everyone, not just sports fans.”
The city and SEG began negotiating the agreement in April, and Mendenhall noted that “there is still a lot more to be done.” Under a law passed by the Utah Legislature earlier this year, the city has until Sept. 1 to reach an agreement with SEG on a development plan.
“I think the participation agreement, given the short timeline, has a lot of public benefits. There’s still so much room to make this incredible, to make mistakes, to make it something we wish we had done differently,” said Councilman Darin Mano. “I just want to say I’m still nervous about the outcome of this, to make sure we don’t make mistakes or repeat mistakes. I hope my fears are unfounded, but I’m still nervous.”
The SEG proposal, which covers a three-block area, includes reconfiguring the arena entrance to face east, pedestrian plazas, undergrounding 300 West between 100 South and South Temple, and building a residential tower and a hotel. The plans, which aim to better connect the east and west sides of downtown, would affect the Salt Palace Convention Center, Abravanel Hall, the Utah Museum of Contemporary Art and Japantown.
As part of the agreement, SEG would charge $1 per ticket for tickets costing $25 or less; $2 per ticket for tickets costing at least $25 but less than $200; and $3 per ticket if the price is more than $200. The money would go toward family and affordable housing and other initiatives determined by the city. The housing would not have to be in the District.
What’s happening in Japantown?
The agreement provides at least $5 million from the fund for the revitalization and redevelopment of Japantown.
The construction of the Salt Palace in 1969 and its expansion in the 1990s virtually wiped out the Japanese community, leaving only a small section of street west of what is now the Salt Palace Convention Center, which claims the honorific name Japantown Street. The Salt Lake Buddhist Temple, the Japanese Church of Christ and a small garden are the last remaining landmarks on 100 South.
Additionally, SEG would create a pedestrian connection between the neighborhood and Japantown, including a buffer between the Japanese Church of Christ, place historical markers, and integrate Japanese architecture and landscaping.
“This does not in any way fix what happened to the Japanese community,” said board chair Victoria Petro, who thanked the Japanese community for its patience and persistence in pushing for participation in the project. She also thanked SEG CEO Mike Maughan for what was “a surprising calculation when we started talking about this. It wasn’t on your radar.”
A meeting place
As part of the district’s development, SEG would design outdoor event space, walking paths that connect public streets to the district, and landscape elements where individuals and families can gather. SEG and the city will identify two three-day periods each year between May 1 and September 15 that are free for festivals or other events.
Another $5 million in the public fund would be set aside for various pieces of public art, including “iconic” art, in the district. The works would be acquired through a mutually agreed-upon process between the city’s arts council and SEG, including engaging local artists to compete for the opportunity to create public art.
The agreement also includes a provision that requires the Jazz and Utah Hockey Club to play all home games at the Delta Center for the duration of the agreement. If either team stops playing home games at the arena, the city could sue for damages.
SEG would also support community and workforce development initiatives, including apprenticeships, college internships and high school job shadowing programs, with a portion of those opportunities going to students with financial need. The company would also spend $2 million on youth hockey and basketball programs in Salt Lake City.
“We had a lot of expectations of what those benefits could be for the city. It’s incredible to see them on paper because I think that’s what I’m hearing from residents that they want to see. They don’t want it to be a handshake and a ‘we got you,'” said Councilwoman Sarah Young.
What’s next?
If the council approves the participation agreement, it will be referred to a Revitalization Zone Committee, consisting of two members each appointed by the Utah House of Representatives and Senate, and one member appointed by the governor.
In the meantime, the municipal council must also consider several proposed zoning plan changes.
In documents filed with the city, SEG said the project could involve substantial redevelopment, urban renewal and reconstruction, including rerouting, permanently closing and/or bridging some surrounding streets. The company also wants to revise zoning regulations to increase the maximum height limit from 125 feet to 600 feet in the project zone.
Petro said going higher isn’t “a super concern for me,” even though she knows there are people who don’t like it. “The truth is, we’re like Manhattan. Instead of rivers closing in on us, we have mountains. So we have to go higher if we want to house people,” she said.
The Salt Lake City Planning Commission sent a negative recommendation to the City Council last month on proposed zoning changes for the project, saying the changes do not align with the city’s downtown plan or existing zoning goals. The commission recommended leaving Abravanel Hall at its current location with a “modest” renovation using sales tax revenue and creating a buffer around the Japanese Church of Christ, the adjacent garden and the Salt Lake Buddhist Temple to minimize the impact on those historic structures.
City Council members on Tuesday disagreed with the commission citing Abravanel Hall because it is owned and operated by Salt Lake County. Petro asked whether members of the planning commission need better training to know what falls within the city’s purview.
“I don’t want the county telling me what to do with my property and it’s not okay for me to tell them what to do with their property,” Petro said. “The city needs to protect the city’s problems because no one else will and the county needs to stand up for them.”
In August, the council will hold a public hearing and vote on the proposed zoning changes.
