SLC’s downtown sports district clears major hurdle with City Council vote

The Salt Lake City Council unanimously approved a key agreement for Ryan Smith’s downtown sports and entertainment district.

Downtown Salt Lake City is on its way to getting a face-lift.

City Council members voted unanimously Tuesday in favor of a major component of Utah Jazz owner Ryan Smith’s proposal to transform three blocks into a new sports, entertainment, culture and convention district that will be home to his NBA and NHL franchises.

“This is a catalytic day for Salt Lake City because it’s about much more than sports and entertainment,” Mayor Erin Mendenhall told reporters moments after the council’s vote. “It’s about the future of downtown. It’s about anchoring all of these institutions and making sure that our future is a strong one for the entire city.”

The multibillion-dollar project, progressing on an expedited timeline set by the Utah Legislature, needed the council’s endorsement of an agreement between the city and Smith Entertainment Group to move forward.

Tuesday’s vote approving of the agreement is one of the final steps before the council considers a half-a-percentage-point sales tax increase that would funnel $900 million of taxpayer money into the district.

What is in the agreement?

Salt Lake City officials released the full 136-page document Friday after revealing an abridged version earlier last week.

The accord, known within City Hall as the “participation agreement,” includes details about funding timelines, public benefits, cost estimates, and plans for dealing with public safety and homeless camps.

The agreement calls for around $525 million of the city’s $900 million contribution from the tax hike to go toward renovations for the Delta Center. The remaining $375 million would go toward investment within the district but outside of the arena.

While work on the Delta Center is scheduled to begin in April and wrap up in 2027, the rest of the entertainment district isn’t expected to be completed until 2033. The agreement sets a deadline of 2034 for all projects that would use city funds.

The district would include the block that is home to the arena and two blocks to the east.

(Rick Egan | The Salt Lake Tribune) Council Chair Victora Petro comments on the proposed sports and entertainment district during a Salt Lake City Council meeting on Tuesday, July 9, 2024.

In exchange for the nearly $1 billion in public funds, SEG’s NBA and NHL franchises must play all home games at the Delta Center for the next 30 years — or face steep penalties. The agreement stipulates that SEG would have to pay up to $125 million if either team leaves the arena in the first 15 years, or $250 million if both leave, with the penalties decreasing by about $16 million a year after that.

And if both teams leave, SEG could be required to repay whatever part of the $900 million it had received up to that point.

The agreement creates a public benefit fund through a fee on tickets sold at the Delta Center beginning July 1, 2025. This fund would pay for the restoration of Japantown, public art installations, affordable housing and other city initiatives.

Before casting his vote, council member Alejandro Puy said approving the pact was the right move for the city.

“While I might disappoint some of you by supporting this, I think this opportunity will never come again to us,” he said. “And a dying downtown is the worst that could happen to all of our districts.”

(Rick Egan | The Salt Lake Tribune) A dozen protesters opposed to the use of taxpayer dollars for a new sports and entertainment district hold signs on State Street, Tuesday, July 9, 2024.

Tuesday’s vote attracted a few vocal opponents. Ahead of the meeting, about a dozen protesters gathered outside City Hall and called on council members to steer clear of a tax increase.

The council’s formal meeting did not feature a dedicated public comment period for project.

During the Tuesday afternoon work session, council Chair Victoria Petro acknowledged the hesitation that some residents have voiced, but said her fears about the fast-paced process had turned into “determination” because of the public benefits the new district would bring.

”I have said a million times this week that I’d rather be short-tenured and effective than long-tenured and waffling,” she said. “If I lose reelection because I’ve done something bold in the best interest of the city that protects young people who need the jobs, that promotes walkability and sustainability, that promotes diversity — I will happily retire ... This is scary and different, but it is in the best interest.”

What comes next for SLC’s sports district?

(Smith Entertainment Group) A site plan for the proposed downtown sports and entertainment district.

The document will now head to the Legislature’s Revitalization Zone Committee — made up of four state legislators and one member appointed by the governor — which can either approve the pact or send it back to the city for further negotiations.

If that panel approves the agreement, the council can move forward with a vote on the sales tax hike.

The agreement must be approved by Sept. 1 for the council to vote on the tax. Council members would then have until year’s end to approve the tax boost.

Smith’s group has pledged at least $3 billion of its own money to the project.