Salt Lake City appears to be getting caught in the gears of another state-crafted tax mechanism aimed at speeding up development.
City officials and others pleaded for a temporary reprieve, but a state board in a last-minute vote Friday expanded the downtown footprint of a new taxing district designed to funnel public funds into overhauling the Salt Palace Convention Center, Delta Center and other attractions.
That footprint will now include adjacent land on what’s referred to as “Block 67,” where private developer The Ritchie Group and partners have built two hotels and luxury apartments.
The block’s addition to the zone was unveiled late Friday afternoon by a panel within the Governor’s Office of Economic Opportunity and got speedily approved — despite worries and attempts to delay by officials from the city, the Salt Lake City School District and the Salt Lake City Public Library System.
(Francisco Kjolseth | The Salt Lake Tribune) Newly added to Salt Lake City's new sports and entertainment district, The West Quarter, includes 240 luxury apartments in a tower called The Charles and 272 guest rooms spread over two hotels, Le Meridien and Element.
Lawmakers created the Convention Center Reinvestment Zone two years ago to fund multimillion-dollar venue renovations and other development in the urban core, all as part of a transformational sports, entertainment, culture and convention district around the Delta Center.
Friday’s fast-track annexation was pressed by both The Ritchie Group and Smith Entertainment Group, owner of the Utah Jazz and Utah Hockey Club, and buttressed by tweaks to state law earlier this year. It passed on a 9-4 vote, with state officials, legislators and a deputy county mayor on the panel in the majority.
County Mayor Jenny Wilson, who has championed the proposal to fund the SEG-backed vision for a Delta Center overhaul and improving facilities and convention capacity at the aging county-owned Salt Palace, praised the expansion.
She said it offered a chance “to usher in a new era of investment in sports, entertainment, culture and the convention economy.”
“This is how we build the next vibrant chapter in our downtown capital city’s life,” she said. “I appreciate the patience of the community as Salt Lake City, the state, SEG and Salt Lake County have worked to move forward and find a path for this revolutionary opportunity.”
Millions more for downtown overhaul?
(Francisco Kjolseth | The Salt Lake Tribune) Abravanel Hall.
On paper — at least according to GOEO — the Block 67 addition to the four blocks already within the district lifts its anticipated tax-funded renovation budget over the coming decades from $1.5 billion to as much as $1.8 billion.
That will expand the district to 49.92 acres, with the prospect of generating a new total of $587.6 million in additional sales taxes for the project, a new increment of $263.8 million from property taxes and $956.9 million from other sources over the next 30 years.
The plan officially dedicates 100% of that chunk of new property taxes “and full amount of sales and use tax increment” to reinvestment within the Convention Center Reinvestment Zone boundaries.
Developer Ryan Ritchie, founder and principal of The Ritchie Group based in Salt Lake City, said the addition of Block 67 was solely to provide “infrastructure” for the wider development — namely, hundreds of parking stalls envisioned to serve the Salt Palace and other upgraded attractions.
GOEO and the county have yet to work out how taxpayers would recoup a share of any future parking revenues The Ritchie Group might amass.
The proposal added much of the block, spanned by 100 South and 200 South between 200 West and 300 West — including The Richie Group’s luxury West Quarter development. Left out were the Salt Lake Buddhist Temple and the Japanese Church of Christ that are part of Japantown, as well as portions of the block already subject to other city redevelopments.
‘Eyes wide open’
(Smith Entertainment Group) A rendering of a renovated entrance to the Delta Center.
The GOEO panel’s approval went ahead with major — yet only partly understood — financial implications, including how sales taxes, property taxes and other public money will be collected and used for retrofitting the Salt Palace, Abravanel Hall and the Delta Center.
Also approved with the land expansion was a complex revision of how various slices of sales and property tax streams will be redistributed among local governments.
As an example, one official said the latest financing mechanisms and taxing footprint, including portions of Block 67, meant the Salt Lake City School District faced giving up future tax revenues equivalent to the salaries of 83 teachers, or “keeping the lights on” at 14 elementary schools — per year.
With similar fears, City Council member Dan Dugan told the GOEO board it lacked adequate clarity as to just what the ultimate hit on city taxpayers might be.
“They’re looking at this money to pay for our public safety, our parks, our roads,” Dugan said. " I just want to make sure we go in eyes wide open on how much this is costing in the current years, let alone in year 30.”
‘Scheduled to the very hour’
Blake Thomas, a senior adviser to Salt Lake City Mayor Erin Mendenhall, said the city shared the prevailing vision for transforming downtown attractions through the Convention Center Reinvestment Zone — and approved a 0.5% sales tax hike to raise up to $900 million toward the district.
But Thomas also noted the city and others had less than a day to absorb the new boundaries out of GOEO — and a matter of hours to examine its big budget changes. His request for another week to review the map and financials got turned down.
“I’m very sympathetic to the desire to have more time,” said panel member and state Rep. Jim Dunnigan, R-Taylorsville. “But how is that going to change the vote today versus what it’s going to be a week from today?”
Mike Maughan, with Smith Entertainment Group, said it also faced deadlines for its potential lenders and tight construction schedules for the Delta Center renovation shaped around the Jazz and Utah Hockey Club seasons — with work now slated to start April 18.
“We’re scheduled to the very hour,” Maughan said, “and so any delays can put that in some difficulty.”
Tight timelines, thanks to state lawmakers
Changes to the reinvestment zone come as several key pieces of the downtown sports, entertainment, culture and convention district are being driven into place under expedited timelines set by the Legislature.
The City Council is warily rolling ahead with a public hearing and vote on Tuesday that would create a separate but related new public infrastructure district, or PID.
That would span the Delta Center block and set up a board to govern the ways taxes would be taken in for the downtown overhaul — and how up to $1.8 billion would be spread among the Delta Center, Salt Palace, Abravanel Hall and other facilities.
Council members say they have had too little time to bring new financial numbers for the PID into focus before Tuesday’s public airing.
As with their initial negotiations with Smith Entertainment Group on the Delta Center overhaul and with Larry H. Miller Co. over redevelopment in the city’s Power District, city officials are bound in their approval of the PID by a series of rapid-fire deadlines written by state lawmakers.
Some council members also have chafed at the use of new taxing tools, such as the Convention Center Reinvestment Zone and Housing and Transit Reinvestment Zones, saying they only purport to unlock new tax money for transformational projects.
“The truth is,” said council member Alejandro Puy, “these tools are taking money from future generations. That money doesn’t currently exist. But it will — and it’s all encumbered.”
Clarification• April 7, 2025, 2 p.m.: This story has been updated to clarify the projected impact on Salt Lake City schools.
