MLB complex in Utah to cost $1 billion in public funding, sources say

The Utah Legislature and the governor say a hotel tax increase could help build a Major League Baseball entertainment district in Salt Lake County.

(LHM Company) The Larry H. Miller Company released new renderings for its plans for the Power District development on Salt Lake City’s west side on Feb. 15, 2024. The 100-acre site along North Temple is where the Miller’s proposed Major League Baseball stadium would be built.

While proponents of bringing Major League Baseball to Salt Lake City rolled out artist renderings of what they hope a new stadium might look like Thursday, with two weeks left in the 2024 legislative session, the plans for how much public money might be spent on the project remain shrouded in secrecy.

The Larry H. Miller Company, led by Gail Miller, has said it plans to invest $3.5 billion in the Power District. But legislative leaders are still working behind closed doors on a proposal that could throw more than $1 billion in public financing toward not just the baseball stadium, but the sprawling entertainment district stretching from the northwest corner of downtown Salt Lake west along North Temple toward the State Fairpark.

Rep. Ryan Wilcox, R-Ogden, is sponsoring the legislation to create public financing for the stadium and had hoped to have a copy of the bill made public weeks ago. House Speaker Mike Schultz, R-Hooper, is also steering much of the discussion himself.

While several sources familiar with the negotiations — who spoke on condition of anonymity because they were not authorized to discuss the talks publicly — emphasized that the details of the package are still very much in flux, the general contours of the taxpayer subsidies appear to be taking shape.

Under the framework, the state would issue hundreds of millions of dollars worth of bonds, essentially borrowing the money, then repay the debt with revenue generated by an increase to the transient room tax, or hotel tax.

Initial discussions centered around a 2.5% increase to the room tax across Salt Lake County and six neighboring counties — Weber, Davis, Tooele, Summit, Utah and Wasatch — that presumably would see some benefits from the baseball team.

Alternatively, the increase could be smaller, between 1% and 1.5%, to reduce the impact on hotels, but spread across all 29 Utah counties, sources told The Salt Lake Tribune.

(Laura Seitz | Pool) Gov. Spencer Cox speaks to reporters at the PBS Utah Governor's monthly news conference at the Eccles Broadcast Center in Salt Lake City on Thursday, Feb. 15, 2024.

On Thursday, Gov. Spencer Cox expressed support for tapping the hotel tax to help pay for the baseball project.

“I know there’s some conversations right now about the Transient Room Tax,” he said during his monthly news conference. “We have some of the lowest taxes in the United States on hotels … so the argument is there’s a little bit of room. Most of those taxes are paid by people outside of the state of Utah, so that’s one area where we’re having discussions and negotiations where I’m open to it.”

“I’m not open to using General Fund money and writing a check to subsidize these at all,” he said.

An email to Schultz’s office and a text message to Wilcox seeking confirmation and comment of the details of the stadium deal were not returned Thursday.

Tapping into hotel taxes to pay for sporting venues is not without precedent, although on a much smaller scale. In 2007, the state arranged a deal to divert $35 million in hotel taxes to the Real Salt Lake soccer stadium in Sandy. The baseball stadium proposal would dwarf that deal, however.

[Read also: Andy Larsen: How much are you willing to pay to help the Millers and Smiths build new stadiums?]

In early conversations around the ballpark, the goal was to try to raise as much as $70 million a year from the tax hike but has been scaled back to somewhere between $42 million a year and $50 million for the life of the 20-year bonds — meaning potentially $1 billion in state funding, minus the interest on the bonds, could be available for the stadium project.

But the baseball stadium is just one piece of the larger vision. As other cities have done, lawmakers also want to create a broader Fairpark entertainment district with hotels, bars and restaurants.

It would also receive public subsidies, sources said, with one of the proposals on the table being redirecting a portion of the new sales and property taxes generated by the stadium and surrounding downtown restaurants, shops and businesses back into the entertainment district.

The Miller company would have to have a deal signed with MLB committing to an expansion team before the public subsidies would kick in, a source said.

Bill TIbbitts, deputy executive director of Crossroads Urban Center, which has been advocating this session for more funding to combat homelessness and make housing more affordable, said there seems to be a disconnect between Utahns’ needs and the Legislature’s funding priorities.

“It’s hard when we’re in a session where people are saying we don’t have the money we need to address housing and homelessness, but they manage to not just find, but create, a new revenue source for building [the stadium],” he said. “When there are 10s of thousands of families that are paying more than they can afford for rent, it’s going to take a long-term commitment to turn that around.”

(Chris Samuels | The Salt Lake Tribune) Items advertising Big League Utah at the Silicon Slopes Summit at the Delta Center, Wednesday, Sept. 27, 2023.

Rep. John Hawkins, R-Pleasant Grove, is sponsoring legislation that would put together a similar public financing package for a potential National Hockey League stadium for a team that Utah Jazz owner Ryan Smith is attempting to bring to the state, although sources say that that bill has been bogged down over questions of where the stadium might be located and identifying a clear financing mechanism.

Wherever the state’s baseball financing package ends up, there is likely to be some time for tweaks before it ever takes effect. This week, USA Today reported that MLB does not plan to expand from 30 to 32 teams until 2030 — with Salt Lake and Nashville being the frontrunners for the two new teams.

Earlier in the session, Utah lawmakers passed, and Cox signed, a resolution supporting the addition of a Major League Baseball team in the Power District and Fairpark neighborhoods west of downtown.

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