Salt Lake City is ‘working hard’ to keep the Utah Jazz downtown, city leaders say. What happens next?

The NBA franchise has explored the possibility of moving out of the capital city, but stakeholders hope to secure a pledge from the team.

(Rick Egan | The Salt Lake Tribune) Workers put the the Delta logo back on the Utah Jazz's downtown arena, on Thursday, May 25, 2023.

Will the Utah Jazz stay in Salt Lake City? Or will they move elsewhere on the Wasatch Front?

Smith Entertainment Group, the company with a majority stake in the Jazz, has explored building a new arena outside of Utah’s capital city, multiple stakeholders have told The Salt Lake Tribune. Those talks have included holding behind-closed-door conversations with The Point of the Mountain State Land Authority about building a new arena near the old site of the Utah state prison, at the south end of Salt Lake County.

A new arena would likely host the Utah Jazz and a future NHL team.

“The question essentially from that group was, ‘Is this a possibility, could this work here?’” Point co-chair Lowry Snow said.

While Snow said there haven’t been talks with SEG recently, Salt Lake City officials and stakeholders want to be proactive in keeping the Jazz — along with potentially building a new sports and entertainment district — downtown.

“Our board establishes four priorities for the year. One of those four priorities this year is to support investments in the Utah Jazz’s long-term residency downtown,” Downtown Alliance executive director Dee Brewer said.

While any decision is likely years away — the team plans to stay at the Delta Center for the immediate future — it’s clear that both Jazz owner Ryan Smith’s management group and government leaders have been considering where the team might play next.

Why a new arena?

Home of 262 consecutive sellout games for the Jazz, the Delta Center is a respected NBA basketball arena, where fans sit closer to the court than anywhere else in the NBA thanks to the pitch of the venue’s bowls.

The arena also features an impressive array of amenities for the high-dollar set. The Delta Center has more dining club space than any other arena in the NBA, the team says. That’s thanks to a $125 million renovation in 2017 that, among other improvements, turned team office space into more suite square footage for the Jazz’s highest-paying ticketholders and corporate sponsors.

As part of the renovation deal, the city gives the Jazz a percentage of property tax revenue from the arena and nearby areas. Those reimbursements, which run until 2041, can total up to $22.7 million. The Redevelopment Agency of Salt Lake City owns the city block that the arena sits on and rents it to the Smith group for $1 per year through 2040. Smith has the option of renewing that lease for two additional 10-year increments after that. Should the Jazz leave the Delta Center, the rent increases to a fair market value decided by an independent appraiser for the ground the arena stands on, per an amendment to the lease agreed to in 2022.

So why would Jazz ownership think about building a new arena?

“If the Jazz can expand their revenue platform, they can invest more in the players and be more competitive with teams in larger markets like LA, Miami, NY and Chicago,” Brewer said. Forbes estimated that the Jazz made $275 million in revenue for the 2022-23 season; NBA teams in those four larger markets earned an average of $437 million.

The Jazz and the Smith Entertainment Group declined to comment for this story, instead pointing the Tribune toward the other recent comments made by Smith on the matter.

One promising revenue possibility for Smith and company: the NHL. Smith has been vocal about his desire for a hockey team to either relocate or expand to Utah, which would likely add tens of millions of income annually to the Smith Entertainment Group’s bottom line. NHL commissioner Gary Bettman met with Smith earlier this year.

Landing a hockey team in Utah would also raise the urgency level for Smith, and the area, to create a new arena. While NBA basketball arenas all contain roughly 18,000 seats, the Delta Center’s hockey sightlines and capacity (only 13,000 to 14,000 under its hockey configuration) aren’t ideal for major league play.

“It’s doable, and a good incredible experience,” Smith said during a June interview with a Canadian hockey podcast. “But, as someone who comes from the experience space, there’s a better experience.”

But perhaps the more important revenue source desired is an entertainment district around a new arena, a nationally trendy aspect of arena builds in recent years. In the entertainment district model, sports team ownership retains an ownership share in bars, restaurants, hotels, retail, office space, and/or housing directly adjacent to the team’s arena. The team therefore makes money when fans go to the games and when they shop, dine, live and work nearby.

It’s for those reasons that team officials may be interested in areas outside of downtown Salt Lake City as they explore new arena possibilities.

Looking for open space in the south

The model for suburban sports and entertainment districts lies outside of Atlanta.

Ten miles northwest of Atlanta’s downtown, in the unincorporated community of Cumberland, The Battery district contains both the new Atlanta Braves’ stadium, Truist Park, and a surrounding mixed-use 60-acre development that includes hotels, apartments, office buildings, shops, bars and restaurants. There, the Braves own the $550 million mixed-use portion outright, while they turned over the $672 million stadium to the Cobb-Marietta Coliseum and Exhibit Hall Authority before opening day in 2017. Cobb County taxpayers covered $300 million of the stadium cost.

Cobb County’s government and the Braves consider The Battery a gigantic success. This year, the county released figures indicating that the Battery had made $38 million in tax revenue. “I think we’ve had 200 teams from all over the world come to (tour) the Battery and Truist Park. We think we have the secret sauce, and they believe that too,” Mike Plant, president of the Braves Development Company, told Cobb County’s Board of Commissioners.

Atlanta Braves manager Brian Snitker, front, and first baseman Freddie Freeman, left, wave to fans during the Braves Walk through the Battery to SunTrust Park to play the Chicago Cubs in their home opener baseball game Monday, April 1, 2019, in Atlanta. (Curtis Compton/Atlanta Journal-Constitution via AP)

The Braves’ annual revenue reaches $425 million per year, according to Forbes.

The Larry H. Miller Group has been more transparent in its desire to copy The Battery’s plans at the Power District, the proposed location for a Major League Baseball team — if Salt Lake City can land one. The Millers have partnered with Minnesota-based Mortenson Construction, the company that helped build The Battery, in designing plans for a baseball and entertainment district along North Temple and just east of Redwood Road.

But the Smith group has had conversations about an entertainment district for its new arena, too. The Point is a state-sponsored redevelopment project on the southwest side of Draper, where the Utah State Prison stood. The land features approximately 600 acres of development space that will include housing, retail, business space, parks, and more; 98.5 acres of that belong to the Phase 1 master plan released at the end of November.

For that reason, they reached out to The Point of the Mountain State Land Authority approximately a year ago, co-chair Lowry Snow confirmed to The Salt Lake Tribune’s editorial board in a meeting this week.

“We said there is a process that everyone has to go through that would like to develop or offer development on this piece,” Snow said. “If you feel like that this is a project that you’d like The Point to consider ... you can proceed with that process.”

Snow said there have not been further conversations between The Point’s board and representatives from the Smith Entertainment Group recently. However, Draper Mayor Troy Walker also affirmed his interest in attracting an arena in his city this week.

(Point of the Mountain State Land Authority) A rendering of The Promenade, a central feature in the first 100-acre phase of The Point in Draper. State officials have signed a contract with developers on the first 100 acres of redevelopment where the now-demolished Utah State Prison in Draper once stood.

Meanwhile, another Utah development has drawn public praise from Smith and Jazz CEO Danny Ainge. “Utah City,” a 700-acre plot of land on the east shore of Utah Lake in the city of Vineyard, also seeks to be a walkable mixed-use development. There has been no other public indication, however, that Vineyard could be a potential site for an arena.

From a population standpoint, Utah County is also currently the fastest-growing county in the state, though Salt Lake County still outstrips it by a sizable margin. According to mapping company Smappen, a downtown arena would more equitably serve Wasatch Front residents based on population centers and drive times, but points further south are catching up.

Salt Lake City makes its case

Salt Lake City has pointed to another successful model for a downtown sports and entertainment district to entice Smith.

Milwaukee’s Deer District is a 30-acre development at the site of a former freeway spur, torn down due to lack of use. While smaller than Atlanta’s The Battery, the Deer District lies in the heart of Milwaukee’s downtown, with the Bucks’ Fiserv Forum as its main attraction. That arena cost $524 million, with $250 million of that coming from taxpayers.

The Deer District also contains bars, restaurants and other businesses — with additional hotels, apartment complexes and a smaller concert venue planned for the site. When the Bucks won the NBA championship two years ago, 65,000 fans gathered in the new 2.3-acre plaza outside the stadium to celebrate.

In September, a group of about 80 Utah leaders and staffers visited the Deer District to learn what lessons from the area could be applied in Salt Lake City. The group included Salt Lake City mayor Erin Mendenhall, multiple Salt Lake City council members, officials from Salt Lake County, Utah Jazz president Jim Olson, the Downtown Alliance’s Brewer and others.

(Morry Gash | AP) Fiserv Forum stands Thursday, March 12, 2020, in Milwaukee.

“That was about creating an opportunity for the Jazz to tell their story about what they want, and what they want to build here and what they need,” Brewer said. “And also for downtown stakeholders to look at an example of a good sports and entertainment district.”

It’s worth noting that while The Battery has been successful for its ownership in Atlanta for baseball, NBA teams have headed away from the suburbs and towards more urban arenas in recent years. The Pistons moved from suburban Auburn Hills to downtown Detroit in 2017, the Kings moved from the outskirts of Sacramento to its downtown core in 2016, and the New Jersey Nets moved to the center of Brooklyn in 2012.

Only two NBA arenas remain outside of their city’s downtown core: San Antonio’s Frost Bank Center, built in 2002, and Philadelphia’s Wells Fargo Center, built in 1996. Both arenas, though, lie in sports complexes of their own, next to other stadiums and arenas.

“In the West, we have so much land, that sometimes we spread ourselves too thin. There is value in creating density in certain categories — in art, entertainment, and sports,” Brewer said.

The Deer District is about the size of three downtown Salt Lake City blocks, and there’s no obvious downtown set of parcels of that size that lie completely open. But city officials are confident that they can work together with Smith and other interested groups to find similar adjacent acreage downtown that works, through the purchase of private land or repurposing city land.

“We are actively engaged with Smith Entertainment Group on talking about how we can make that happen in our already built-out downtown,” Mendenhall said in a mayoral race debate in October, while specifically mentioning the factors involved in a sports and entertainment district. “We want this, we’re working hard on this, and I think it’s very possible for us.”

(Briana Scroggins | Special to The Tribune) Cooper Tweet, 9, of Riverton, looks up before he has his photograph taken outside of the Utah Jazz's downtown arean before a game against the Memphis Grizzlies in Salt Lake City on Wednesday, May 26, 2021.

While such an effort would be among the city’s largest redevelopment projects ever, officials believe it would be worthwhile. The Downtown Alliance cites statistics finding that of Salt Lake City’s 25 highest visitation days of last year, 76% of them featured Delta Center events. While not all of those were Jazz basketball games, the city fears losing Smith Entertainment Group’s booking of concerts and other events at the Delta Center downtown as well should they build a new arena elsewhere.

Additional studies are currently planned to evaluate to what extent fighting for the Jazz to stay downtown would be a wise investment of taxpayer dollars. In particular, the city hopes to find out to what extent the city, county, and even the Wasatch Front can support two or even three major-league professional teams — in terms of fans, corporate sponsors, and everything else it takes to make a team successful — as MLB and NHL teams are courted.

Overall timeline

It’s clear the beginning of any new construction on an arena would be at least several years down the road. The Jazz have invested in the current downtown arena in significant ways, and held a ribbon-cutting ceremony to commemorate the name change from Vivint Arena to Delta Center in October.

But the arrival of the successful Winter Olympic bid in 2034 created a logical focal point for new arena construction, multiple stakeholders told The Salt Lake Tribune. A new NHL team might accelerate arena plans, but recent reporting from high-profile Canadian hockey reporter Elliotte Friedman indicated that the NHL might consider waiting to expand to Utah until a hockey-friendly arena was built.

“I think if the NHL wanted to go to Salt Lake City, they could go right now, but I remember ... there was at least some conversation of: ‘Is it the right time (or) wait until the new arena is built?’” Friedman said. “I do think the NHL will be there at some point. I just wonder what the timeline of that is going to be.”

In an appearance on SportsNet’s 32 Thoughts podcast, Smith discussed the possibility of building an NHL-ready arena with Friedman. Smith indicated any arena he built would have top-tier facilities for both major league basketball and hockey. He also indicated he felt comfortable that he’d be able to find land for his new arena, whether it was “in the existing spot or a new spot.”

“But the good news is, with some of the land struggles that you see in other places, I think we’re a little more set up for that for whatever reason,” Smith said. “It doesn’t mean there’s a whole bunch of empty land. It’s just more of this structure of our city and state, there’s a little bit more opportunity in the way that it’s kind of grown out.”

And in a June interview, Smith said it was too early to decide where his teams would reside.

“I think there’s a lot of optionality. Our fan base is growing everywhere. So I think we try to focus on getting the franchise first and then it’s figuring out what the best options are,” he said.

Mendenhall, Brewer, and others are trying to push Salt Lake City to the top of that list.

“We want to try and understand what the Smith Entertainment Group needs in the downtown environment to support their long-term objectives, and to bring stakeholders into conversation around creating those and that environment,” Brewer said.

After all, the future home of the Utah Jazz is at stake.

Editor’s note • This story is available to Salt Lake Tribune subscribers only. Thank you for supporting local journalism.