Yielding to rural Utah lawmakers resistant to see their tax dollars potentially pay for a Major League Baseball team in Salt Lake City, the Utah House on Tuesday passed a dramatically revised version of a bill to fund a new stadium and the surrounding entertainment district.
While the bill still authorizes the state to issue up to $900 million in bonds to build the stadium, exactly how the bonds would be repaid is now unclear.
Gone is the hotel tax that would have been charged statewide and poured an estimated $38.4 million a year into the project. A tax on rental cars remains, but won’t take effect until Utah gets a Major League Baseball franchise and, even then, would generate only about $6 million a year.
“More kids go to baseball with a ticket in their hand next to the ones that they love than any other sport in the world. It’s made for us. Utah is made for baseball,” said Ogden Republican Rep. Ryan Wilcox. “We have one shot here today. [If] we take it, we make ourselves prepared to keep ourselves on that short list if that opportunity presents itself. We can do that. Those memories will be ours with our grandkids, with our kids, into the future if we have the courage to make the hard choices.”
The newly created Utah Fairpark Area Investment and Restoration District along North Temple — where Gail Miller and the Larry H. Miller Co. are lobbying to locate a professional baseball team — would collect the state portion of new sales tax and property tax generated in the area and use it to subsidize the infrastructure and other amenities, like restaurants, hotels and bars in the area and a stadium.
Senate sponsor Sen. Lincoln Fillmore, R-South Jordan, said lawmakers will know better after a team is announced if the sales tax and rental car tax generate enough to cover the stadium debt and the Legislature can adjust accordingly.
Meanwhile, the Senate passed SB272, which allows Salt Lake City to create a sports and entertainment district over a nine-block area in downtown Salt Lake City and impose a citywide tax increase of 0.5 percentage points, with the revenue going to building a hockey arena in hopes of attracting a National Hockey League team.
Like the ballpark bill, SB272 would free up about $1 billion in public financing for a hockey stadium and the surrounding area. The bill passed 21-7 and goes to the House for consideration.
MLB is considering adding two teams and Utah and Nashville are reportedly frontrunners, but an announcement is not expected for a few years. Ryan Smith, the owner of the Utah Jazz, has been aggressively pursuing an NHL team, and in January submitted a formal application to the NHL to be awarded a team.
Sen. Dan McCay, R-Riverton, the sponsor of the bill creating the hockey district, said that initially, the legislation would have allowed the hockey arena to go anywhere, but there were concerns about what might happen if Smith moved the Jazz out of the Delta Center and there was no hockey team Downtown.
Sen. Nate Blouin, D-Millcreek, said on the Senate floor Tuesday night that, at times, it “almsot felt like there was a gun to our head, that if they don’t get this we’ll take it and leave.”
Both the baseball and hockey bills have provisions that require the owners of the team to repay the public investment if the team leaves within 30 years.
“What we’re actually trying to do here is while we’re providing a public investment we also make sure some of the beneficiaries stay just as invested as we are,” McCay said.
Even if a baseball team never comes to Salt Lake City’s west side, Rep. Sandra Hollins, D-Salt Lake City, who represents the Fairpark area, said her community is excited about the investment in the neighborhoods. The Millers estimate that their investment in the district would be $3.5 billion.
“We know this is going to be a good thing,” she said. “This is going to have a major impact on an area that has been neglected. ... It is beyond Major League Baseball, which we absolutely welcome. This is about the economic impact and what it’s going to mean for the people I represent.”
The bill passed 51-11 in the House and goes to the Senate for consideration. A Senate committee heard testimony on the bill Tuesday but took no action. A final vote on the bill could come as early as Wednesday.
“We anticipate that this development, which covers 200 acres of state-owned and a small amount of privately owned, to just lift the entire area and to be able to generate a lot of new economic activity and revenue from that,” Sen. Lincoln Fillmore, R-South Jordan, the Senate sponsor of the bill, said Tuesday. “And, you know, we’re going to be using largely that to be able to fund the development of that project.”
If a baseball team does come to Salt Lake City, Wilcox’s bill mandates that its team name include “Utah,” rather than just “Salt Lake City.”
St. George Republican Rep. Walt Brooks, R-St. George said when the bill first was introduced he was a “hard no.”
“I could not vote for a bill that’s going to increase taxes statewide for this support this issue,” he said Tuesday. “However, I really appreciate the sponsor and our leadership team who took our concerns and went to work and worked hard to come to a solution that really gets it to a place that’s going to be a valuable asset to our community.”
A provision that would have earmarked part of the hotel tax increase to rural Utah emergency medical services and search and rescue operations — designed to win over rural legislators — was also removed from the version of the ballpark bill that passed the House Tuesday.
Representatives from southern Utah said House leaders had committed to readdressing that issue next year.
— Tribune reporter Emily Anderson Stern contributed to this report.
Clarification: Tuesday, Feb. 27, 9:15 p.m. • The story has been updated to include comments from Sen. Lincoln Fillmore that, if the sales tax revenues don’t cover the debt incurred to pay for the baseball stadium, they would discuss other revenue streams.
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