Salt Lake City approves Smith plan for Delta Center and entertainment district

SALT LAKE CITY — A plan that would drastically change downtown Salt Lake City with a “sports, entertainment, culture and convention district” surrounding a remodeled Delta Center has cleared its first major hurdle.

The Salt Lake City Council voted unanimously on Tuesday to endorse a partnership agreement with Smith Entertainment Group — the parent owner of the Utah Jazz and Utah Hockey Club — on a downtown revitalization plan on Tuesday. The vote sends the proposed 136-page document to a state committee for approval before the agreement can be finalized.

If the agreement is finalized, the City Council will vote later this year on whether to approve a 0.5% sales tax increase and proposed zoning changes to accommodate the plan’s development.

“This is a good agreement that brings good things to the city,” said Salt Lake City Council Chairwoman Victoria Petro, prior to the meeting. “As we move forward with this, I’m sorry for the people who feel against and the fear, but I’ve moved from fear to determination. … It is scary and big, but it’s in the best interest.”

The vote wasn’t much of a surprise as any suspense leading up to it was quashed in the City Council’s work session before Tuesday’s formal meeting. Petro said the City Council would vote to endorse the measure during a passionate speech in front of her colleagues.

The City Council’s vote included a lengthy “legislative intent” notice, which outlines goals that the City Council would like the agreement to include but aren’t binding conditions. This may dictate future conversations about the agreement.

In this case, the City Council requests city staff to set up “financing options” for Japantown infrastructure upgrades. It also would like to set up construction mitigation and planning processes for the whole district, as well as prioritize transit development in the district by possibly setting up a “tickets as fare” program with the Utah Transit Authority.

In a joint statement, Salt Lake City Mayor Erin Mendenhall and Smith Entertainment Group project principal Mike Maughan called the vote “an important endorsement and positive step toward” the project.

The vote marks the first big step for the project since Smith Entertainment Group applied for a partnership with Salt Lake City on April 4, shortly before Ryan and Ashley Smith acquired the Arizona Coyotes in a deal that relocated the team to Utah. The partnership opportunity was set up by a bill passed by the Utah Legislature in March.

“We are grateful for the (City Council’s) support of this vision that will create a more activated, connected and family-friendly future for Salt Lake City,” the statement read, in part.

Making a decision

The two sides have negotiated since April, leading to a final agreement document that emerged on Friday. Under the deal, Smith Entertainment Group can seek up to $900 million in bonds toward Delta Center remodeling and other projects within the district.

The Smith Entertainment Group plan would focus primarily around the Delta Center and the two blocks east of it, which is where a proposed plaza, hotel and residential high-rises would be located. A larger area surrounding those blocks, including The Gateway, would compose the rest of the revitalization zone.

The company would receive most of the proposed sales tax increase to cover the cost of the bonds over the next 30 years. Those projects would have to wrap up by about 2034.

In return, it would create a new ticket fee that would go toward a city account that pays for affordable housing projects across the city. Other city benefits include new internships, shadowing and apprenticeship programs for high school and college students, as well as more youth programming and free/subsidized tickets for Salt Lake City-based community organizations.

Some money would be set aside for historic Japantown renovations, as well.

If our downtown dies … (it) reflects in all sorts of ways our local economy, for attracting new businesses (and) high-paying jobs.

–Salt Lake City Councilman Alejandro Puy

But the plan also generated all sorts of reactions for and against it at a pair of public hearings in May and June that drew over 100 comments. While several downtown business leaders spoke in favor of the plan — saying it could provide a “shot in the arm” for business in the district — many residents also spoke out in opposition.

Some called it a “boondoggle,” while others questioned why a billionaire needs taxpayer money to complete the project. Even on Tuesday, a group called Americans for Prosperity-Utah staged a small protest outside of the Salt Lake City-County Building before the meeting.

“This is not the role of government to raise the taxes on (Salt Lake City) taxpayers to then subsidize the expensive hobbies of someone else,” said Kevin Greene, who helped organize the protest.

City Council members recalled “countless hours” of meetings and debates over the agreement terms, before Tuesday’s vote. Councilman Alejandro Puy added there were some difficult conversations during that time, including measures that exempt groceries from any potential sales tax increases.

In the end, Puy said his colleagues agreed that the idea of revamping downtown, including the potential to reopen 100 South that remains covered up by the Salt Palace Convention Center, was too good to pass up. It’s these types of changes that city officials believe could help the city’s plan work, while other stadium deals have faltered.

“The success of downtown is the success of every district in the city,” he said. “If our downtown dies … (it) reflects in all sorts of ways our local economy, for attracting new businesses (and) high-paying jobs.”

The next steps

The district process is far from over even with Tuesday’s vote.

Salt Lake County properties including the Salt Palace, Abravanel Hall and Utah Museum of Contemporary Art are not included in the agreement. The fate of those properties will be determined by separate agreements between the county and Smith Entertainment Group. County leaders have said they’d like to preserve Abravanel Hall, but it appears the museum could be torn down and rebuilt.

The agreement partially hinges on Smith Entertainment Group securing a lease with the county by mid-2025.

Meanwhile, Mendenhall said she believes the agreement will be submitted to the state’s Revitalization Zone Committee for review on Wednesday. That will trigger a 30-day period where the committee will vote to either accept it or reject it, providing Salt Lake City and Smith notes on what it would like changed.

City leaders were informed the committee is aware of the agreement document, but they don’t know what direction the committee could be leaning in.

As that takes place, some other items remain in front of the Salt Lake City Council. The council is slated to hold a public hearing on Aug. 13 over the proposed zoning amendments tied to the project, which could open the door for buildings as tall as 600 feet in height. It’s unclear when it will vote on the proposal or the 0.5% sales tax increase.

“There is a lot of work to do,” Mendenhall said. “We’ll keep working together.”

Contributing: Mike Headrick