Utah’s dream of MLB stadium will cost taxpayers at least $900M, raise hotel taxes, according to new bill

If Utah gets a Major League Baseball team, lawmakers look to commit at least $900 million in taxpayer money — and possibly much more — toward the construction of a stadium and development of a Fairpark District surrounding the ballpark under a long-awaited bill finally made public Tuesday evening.

The legislation creating the ballpark subsidy had been promised for weeks but held up as the Legislature debated it behind closed doors. The sprawling 116-page bill, sponsored by Ogden Republican Rep. Ryan Wilcox, was finally made public Tuesday night and closely follows what The Salt Lake Tribune reported last week would be included.

The legislation creates a Fairpark Area Investment and Restoration District north of Interstate 80 between 1000 West and Redwood Road that would be governed by a new board consisting of appointments from the governor, House speaker, Senate president and a Salt Lake City Council member.

Property taxes generated by new development in the area would be used to subsidize infrastructure and other amenities within the district — things like restaurants, hotels and bars — to create an entertainment district along North Temple.

Additionally, the hotel tax would increase by 1.6 percentage points — from the current 0.32% to 1.92% — statewide, with the revenues generated used to repay bonds issued by the district to help build the stadium. As it’s currently written, the bill approves bonding to cover “half the actual cost of developing and constructing the qualified stadium” up to $900 million.

Last week, Gov. Spencer Cox expressed support for using the hotel tax to help subsidize the stadium.

“We have some of the lowest taxes in the United States on hotels … so the argument is there’s a little bit of room,” he said during his monthly news conference. “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.”

Within the Fairpark District itself, hotel providers could charge a tax of up to 15%. The bill also cobbles together a series of other tax hikes within the district, including a telecommunications license tax, an energy sales and use tax, and a resort tax, with the revenues for the tax available for use by the district board.

The legislation sets a deadline of 2032 for Gail Miller and The Larry H. Miller Co. — who is spearheading the drive to lure a Major League team to Utah — to sign an expansion deal that would trigger the statewide hotel tax increase. If no deal is signed before then, that authority lapses.

The property tax revenue would flow to the Fairpark District for 35 years. The district board can begin collecting the energy tax, telecommunications tax, resort tax and hotel tax from businesses within the district boundaries on July 1, 2024, regardless of whether or not a baseball team comes to the city.

If a team comes to Utah, the owners would pay the district $150,000 a month to rent the stadium for 30 years — $54 million in total. If the team leaves the state before 30 years, the owners would be on the hook to repay the taxpayer subsidy.

Salt Lake City would provide services like police and fire to the Fairpark District under a contract with the district.

The Millers released renderings of the proposed stadium and surrounding area last week and said they expect the total price tag for the development to be about $3.5 billion.

On Tuesday, low-income advocates from Crossroads Urban Center and the Faith and Advocacy Coalition to End Hunger and Homelessness wrote to Wilcox and House Speaker Mike Schultz, asking that they raise the hotel tax by a comparable amount “to help produce housing that is affordable to staff at hotels, baseball stadiums and other tourism sector workers.”

According to the Utah Homelessness Council, 77,140 Utahns are paying more for rent than is sustainable and those people are at the highest risk of becoming homeless.

“Finding an ongoing funding source to address the housing needs of young families and the working poor is a big thing, but Utah is a state that is able to do big things — like host the Olympics and professional sports teams,” wrote Bill Tibbitts, deputy executive director of Crossroads Urban Center.

Correction, Feb. 21, 1 p.m. • This story was updated to clarify when the legislation provides for the various tax revenue streams to begin flowing to the Fairpark District.