Mayor Mendenhall calls $1B taxpayer-funded NHL proposal ‘truly transformative’ for Salt Lake

A bill introduced late in the legislative session that would provide $1 billion in public financing to build a hockey arena received unanimous approval from a Senate committee.

(Trent Nelson | The Salt Lake Tribune) Salt Lake City Mayor Erin Mendenhall delivers her State of the City address on Tuesday, Jan. 30, 2024. The Salt Lake City mayor supports a $1 billion legislative proposal that aims to bring the NHL to Utah.

Salt Lake City Mayor Erin Mendenhall hailed a proposal to leverage an estimated $1 billion in taxpayer funding to build a new sports and entertainment district, including a hockey arena for a potential NHL expansion team, as “truly transformative for Salt Lake City, Salt Lake County and the state of Utah.”

The bill, SB272, sponsored by Sen. Dan McCay, R-Riverton, skated through the Senate Revenue and Taxation Committee with a unanimous vote Thursday evening. It now moves to consideration by the full Senate.

McCay said the bill represents a major investment in Utah’s capital and an economic driver for the entire state.

“I ask that we broaden our thinking. First, let’s not think about it as a hockey arena,” McCay told committee members Thursday. “Let’s think of a vibrant urban core that represents Utah to the region and the world. … I hope we don’t think of this as a subsidy, but more of an investment in Utah’s future.”

The legislation, which was first made public Wednesday evening, would enable Salt Lake City to issue up to $1 billion in bonds that would be repaid by levying a 0.5 percentage point sales tax increase citywide. It would bring the capital city’s sales tax to 8.25%.

The money generated from the bonds would go toward developing a sports and entertainment district in downtown Salt Lake City, including a new arena that could be home to a professional hockey team, should the league decide to expand into Utah.

Ryan Smith, the owner of the Utah Jazz and Real Salt Lake, has been aggressively pursuing an expansion team and last month submitted a formal bid for a team to the National Hockey League.

“First and foremost ... the idea of professional sports downtown is the greatest anchor tenant a city can have, hands down,” Smith, appearing online, told the Senate committee. “What we have a chance to do is create an experience not only inside the arena but outside the arena.”

Smith said his focus is finding a “long-term solution for multiple professional sports teams downtown.”

After the hearing, members of Smith’s team would not say what part of downtown was being considered for the new district — which would be designated by the city — or if they envisioned a hockey-only arena versus a dual-use arena that could be a new home for hockey and the Utah Jazz.

Salt Lake City Council Vice Chair Victoria Petro, who represents the west side, voiced her “strong support” for the bill and said it could knit together the east and west sides of the city core. “I’m looking forward to what this brings.”

Academic studies conducted over the past 30 years call into question the potential benefits of public investment in sports stadiums. One analysis published in 2022 reviewed 130 studies on the impact of public financing of sports venues and found that, almost without exception, the benefits were minor or nonexistent and did not justify the public expenditures.

The proposal to provide public financing to the potential hockey arena comes in tandem with another bill, HB562, sponsored by Rep. Ryan Wilcox, R-Ogden, that would provide a similar amount of funding for a baseball stadium for a Major League Baseball team that is being pursued by Gail Miller and The Larry H. Miller Co.

That bill — scheduled for a House hearing Friday morning — would allow up to $900 million in public bonds, repaid with an increased hotel tax statewide, to build the stadium. It would also allow the sales tax, property tax and various other taxes collected within the newly created Fairpark District to be used to subsidize the infrastructure and amenities around the stadium.

While Mendenhall said that McCay’s hockey-focused bill respects Salt Lake City’s authority over land use and “keeps city leaders in the drivers seat,” her office has expressed concerns about the baseball legislation, which would take land-use decisions away from the city and put them in the hands of a board that would include one city council member but mostly would consist of members appointed by legislative leaders and the governor.

The baseball bill “creates immediate concerns about the apparent diversion of tax revenue and land use away from city services, regardless of whether we ever see [an] MLB team in Utah,” Mendenhall’s spokesman, Andrew Wittenberg, said Wednesday in a statement on behalf of the mayor and the council.

Aaron Bullen, a resident of Lehi, was one of two individuals who spoke against McCay’s bill.

“I oppose this bill because we should not have socialized costs for privatized profits,” Bullen said. Salt Lake City taxpayers and visitors “don’t need to subsidize Mr. Smith because he is quite wealthy.”