The ball is now in Salt Lake County’s court when it comes to the future of a new sports, entertainment, cultural and convention district surrounding the Delta Center, but don’t expect an agreement anytime soon.
A lease agreement between Salt Lake County and Smith Entertainment Group for the two blocks east of the arena is now the biggest requirement in a partnership agreement between Smith and Salt Lake City following the city’s vote Tuesday.
However, negotiations may not be completed until after the next legislative session, which ends March 7, 2025, due to project costs, Salt Lake County Mayor Jenny Wilson said.
According to preliminary construction estimates from the province, it will likely cost $800 million or more to renovate the Salt Palace Convention Center in the manner envisioned in the project. Renovations to Abravanel Hall, which would remain in place, are expected to cost another $200 million.
That doesn’t even take into account the cost of potentially demolishing and replacing other buildings, such as the Utah Museum of Contemporary Art, or the work to tunnel 300 West under a new public plaza that would exist between the Delta Center and the provincial land. across the street.
“We recognize that the state is going to have to get involved in some way,” Wilson told KSL.com on Wednesday, later noting that the county expects to apply for funding during the next legislative session to help pay for Salt Palace renovations .
“I think we can all agree that there is merit in considering a fuller reinterpretation of a Salt Palace,” she added. “We are now working to address the complexities surrounding the rebuild and do so in a way that benefits the community as a whole.”
Smith must reach an agreement with the province by mid-2025. Land lease negotiations between the county and Smith Entertainment Group will likely involve state lawmakers and Salt Lake City leaders because of the project’s complexity. Each entity has team members who review different aspects of the plan and explore all possibilities.
According to Wilson, other major entities are also involved in the discussions. The list includes The Church of Jesus Christ of Latter-day Saints, which owns several tracts of land adjacent to the designated district.
An economic boom?
However, she and several downtown business leaders believe a major downtown overhaul is necessary.
County officials already expressed a desire to upgrade the Salt Palace and Abravanel Hall before major downtown developments began this year. Those who oversee the facilities say efforts to keep the Utah Jazz and Utah Hockey Club downtown have opened up an opportunity to move forward with those plans.
It also opened the door to solve a major problem related to the layout of the inner city: the size of the Salt Palace. Those who rely on downtown traffic see the Salt Palace — which spans about three blocks — as a dividing line in downtown.
“There is no concerted effort to bring (downtown buildings) together,” said Steven Brosvik, president and CEO of the Utah Symphony, explaining that the Salt Palace effectively cuts off Abravanel Hall from The Gateway and the Delta Center, as well as from the Capitol and Rose Wagner Theaters. “We’re kind of on an island.”
It could also solve a puzzling trend that county tourism officials have noticed.
Downtown convention organizers are eager to book venues at the Hyatt Regency, but are less interested in booking the west end of the Salt Palace. Overall, there is strong demand for hotel rooms, even as some parts of downtown struggle to attract business, Kaitlin Eskelson, president and CEO of Visit Salt Lake, told KSL.com Thursday after an event about the neighborhood.
She thinks a redesign of the Salt Palace could make visiting more uniform and open the area to more activity. Additionally, adapting the building could allow dueling conventions to take place at the same time, which could increase downtown hotel needs. The province estimates changes would generate $85 million to $300 million in additional economic impact.
This, Wilson said, could potentially broaden the tax base by attracting more visitors who would pay most of the 0.5% revenue increase associated with the project.
Conventions, events and other leisure activities in Salt Lake County have already contributed about $5.8 billion in visitor spending in 2023, nearly half of the state’s total, according to the University of Utah’s Kem C. Gardner Policy Institute. Because groceries and major purchases such as vehicles are exempt from the tax, non-residents expect to ultimately pay 75-80% of the sales tax.
However, not everyone is sold on the tax. Several residents came to Tuesday’s city council meeting to express their dissatisfaction. Some wondered why this is necessary when Salt Lake City is about to host the 2034 Winter Olympics — the area will likely receive state and federal funding.
“It sounds like a 0.5% sales tax isn’t that big of a deal, but… every year there’s always a project and something they want to do, and it’s just this percentage,” said resident DeEtta Barta . “We really have higher taxes than we should.”
Former Salt Lake City Mayor Rocky Anderson also rejected the idea of creating a referendum to put the vote on the ballot, potentially overturning it.
Downtown business leaders say they hope that doesn’t happen. Kitty Chau, director of sales at Le Meridien and Element Salt Lake City Downtown, said she believes the effort could be harmful to the city.
“(The district) will be the force behind an economic boom for downtown development and job growth,” she said. “Let us be brave; let’s invest in our future. It’s a bright one.”
