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SALT LAKE CITY — Smith Entertainment Group's adjusted agreement with Salt Lake City over a revitalization district includes a proposed tax increase and new ticket fees for Delta Center events, but it would fund new affordable housing and other conditions that would benefit Salt Lake City.
The Salt Lake City Mayor's Office unveiled an overview of the latest proposed agreement during an update to the Salt Lake City Council on Tuesday. A full version will be released by Friday before the City Council votes on the measure potentially next week, according to Salt Lake City Mayor Erin Mendenhall.
"I feel great about the public benefits, about the security of the teams (and) about the revitalization of so much more than just the Delta Center," the mayor said, following the presentation. "We have partners who have the same vision that goes beyond the district and supports Salt Lake for the next 30 years."
Updated terms
Salt Lake City, Smith Entertainment Group and Salt Lake County have released plenty of details already about a proposed "sports, entertainment, culture and convention district" surrounding a remodeled Delta Center that will play home to the NBA's Utah Jazz and the NHL's Utah Hockey Club.
What was released Tuesday outlines funding sources, some timelines and other terms that the two sides have agreed to over the past few months.
The updated agreement includes language that Smith Entertainment Group can receive up to $900 million from a possible 0.5% tax increase that will be voted on sometime this year after an agreement is secured. Salt Lake City would receive up to 1% of the revenue that the tax generates.
Smith Entertainment Group would also impose a new ticket fee for events at the Delta Center beginning on July 1, 2025, which would go toward investing in the district. There would be a $1 fee per ticket under $25, a $2 fee for tickets $25-200 in cost and $3 for tickets greater than $200.
Of the tax revenue collection, $525 million would go toward remodeling the Delta Center so that it can host both the Utah Jazz and the Utah Hockey Club. The remaining $375 million would go toward other district improvements. Projects that receive sales tax funding are to be completed by the 10th anniversary of the agreement, setting up a potential 2034 deadline.
Smith Entertainment Group would also be allowed to plan, build and maintain gathering and event spaces within the district, but it would be required to offer some time for city events. Some space for police and security guards will also be required, according to the details released Tuesday.
The agreement would also generate several benefits back to Salt Lake City. The new Delta Center ticket fees would go toward a city-managed account that would be spent on "family-sized and affordable housing and other public benefit initiatives as determined by the city," according to the document.
Other benefits include new internships, shadowing and apprenticeship programs for high school and college students, as well as more youth programming and free/subsidized tickets for Salt Lake City-based community organizations. The NBA and NHL teams would also have to conduct at least four speaking engagements with student groups and schools per year.
"The whole goal is that we're doing this out of a mission-driven desire to lift downtown," said Mike Maughan, project principal for Smith Entertainment Group. "This is because we're invested in Salt Lake City, we're invested in this community and we're invested in the state of Utah."
The deal requires Smith Entertainment Group to coordinate with the Japanese Church of Christ and Buddhist Temple over the handling of historic Japantown in the area over the next three years, as well. The company will look to "activate" the north side of 100 South in the historic district and include plans similar to what Salt Lake City had in mind for the area.
Jani Iwamoto, a former state senator and a founding member of the Japanese Community Preservation Committee, sat in during the work session to listen to what would be included in the deal for the area. She left feeling better about where the direction of negotiations are going.
"There's no way to ever get back what was lost, but we want to keep what we can and keep preserving that history because the Japanese story from the late 1800s is an important story — as with other communities — to preserve," she said. "I felt that commitment with the City Council."
Still, several residents were not impressed.
Multiple residents appeared in front of or called into the City Council's formal session Tuesday evening, where they blasted the plan and its new details. Some also suggested that there should be more public involvement in the plans.
"I'm frankly disgusted by the offer of a fee on tickets that would somehow create a slush fund for the city as a quid pro quo," said resident Jen Colby. "(Ryan Smith) could pay for it directly with his billions of dollars and if he doesn't want to do that he can put a fee on to pay himself back."
More details about the agreement are expected to be released by Friday, including public safety, homelessness and parking plans that are required to be included in the agreement, under state code. Mendenhall said those reports were compiled by Salt Lake City staff members.
Tuesday's overview explains that Salt Lake City will also receive "a variety of remedies, including specific performance or payment of damages" should either the Jazz or Hockey Club stop playing at the Delta Center. Those penalties are expected to be detailed in the final agreement.
What's still to be determined
The Salt Lake City Council is slated to vote on the agreement next week, but Salt Lake City attorney Katie Lewis said there could be some final tweaks to the agreement by the potential July 9 vote.
Even if the City Council approves an agreement, there's a lot to still be determined. The agreement needs to be approved by the state before the City Council votes on whether to approve the proposed 0.5% sales tax increase and requested zoning changes, which were also presented to the City Council on Tuesday.
It's unclear yet how the City Council will vote, but its members seemed to lean cautiously in favor of it after the presentation.
"There's still so much leeway for this to be incredible and for there to be mistakes made," said Salt Lake City Councilman Darin Mano. "This is a huge responsibility."
If it doesn't work for everyone, it doesn't work for anybody.
– Mike Maughan, project principal for Smith Entertainment Group
Should it pass, Mendenhall is confident that it will get state approval, asserting it will be a key investment for the city and state economy.
However, the overview released Tuesday also notes that Smith Entertainment Group will continue to negotiate a lease with Salt Lake County for land east of the Delta Center, which is out of Salt Lake City's control. That lease agreement is a major condition for the project to move forward.
The document states Smith Entertainment Group has until July 1, 2025, to secure a lease as "a condition precedent to the effectiveness of the agreement."
Maughan said Smith Entertainment Group is "working very closely" with the county as it reviews options for Abravanel Hall, Utah Museum of Contemporary Art and the Salt Palace Convention Center. The future of those Salt Lake County buildings wasn't included in what was released on Tuesday.
Salt Lake County Mayor Jenny Wilson said she would prefer that 45-year-old Abravanel Hall be preserved, but Utah Museum of Contemporary Art executives said last week that it appears that the art museum will be demolished and rebuilt in the proposed zone — something that they support.
"If it doesn't work for everyone, it doesn't work for anybody," Maughan said. "Those conversations are going well. We're very grateful for the collaboration we have with (Wilson) as well as with Mayor Mendenhall."
