In San Francisco, the lack of downtown workers and an increase in crime has shuttered retail outlets and cost the jobs of about 33,000 workers, John Rennie Short wrote recently for The Conversation. Among the retailers that have left the city are Nordstrom, Brooks Brothers, Whole Foods and The North Face. The term “ghost town” is often heard.
Short, an emeritus professor of public policy at the University of Maryland, Baltimore County, said vacancy rates in New York City have increased 70% in five years. Chicago’s Magnificent Mile, a tourist attraction that is home to high-end retailers, has a 26% vacancy rate.
In Washington, D.C., rising crime has become a worry as the city’s center declines. The Metro transit system is threatening cutbacks. And now, the NBA’s Washington Wizards and the NHL’s Washington Capitals are talking about moving to the suburbs of Virginia.
Politico said this raises “the prospect that the bustling neighborhood around the downtown arena would revert to the vaguely scary nighttime desolation that prevailed before the teams arrived in the late 1990s.” In all these situations, the word “ghost town” can again be heard among wary leaders and residents.
When Utah leaders, including the Smith Entertainment Group, talk about the need to revitalize downtown Salt Lake City, they do so with a keen eye toward avoiding what is happening in other major cities. And when they talk about the need for taxpayers to support development of a sports, entertainment, culture and convention district on the west side of downtown, they are talking about making the city’s core a vibrant and attractive place that, unlike so many other big cities, would make Salt Lake City a popular destination for many years to come.
We reject that adding public money to tremendous private investment is lining the pockets of billionaires. It’s a remarkable opportunity to build upon the past 15 years of downtown growth in housing and business.
Lawmakers are united in support
In order for this to happen, Salt Lake City leaders need to make important decisions to approve a 0.5% sales tax increase and reasonable — but ambitious and skyline-changing — construction plans. And in order for that to happen, the city’s elected leaders need public support. That means an understanding of what this plan truly is, and is not.
In an op-ed published by the Deseret News earlier this year, Salt Lake Mayor Erin Mendenhall wrote: “A healthy economy and a successful downtown can bring increased, ongoing support to the urgent needs facing our capital city, like homelessness services, more affordable housing, and support for youth and families. In fact, these seemingly disparate opportunities and needs are reliant upon each other for success.”
This analysis gets to the heart of how a city can benefit from well-crafted investments. As detractors note, the Smith Entertainment Group, including Ryan Smith, owner of the Utah Jazz and the new NHL team, stands to benefit from its plan to create a sports, entertainment, culture and convention district around the Delta Center, as well as to remodel the arena itself to better accommodate basketball and hockey. He and his wife Ashley, like Larry and Gail Miller before them, do so also with considerable risk.
But the city, Salt Lake County and the entire Wasatch Front stand to benefit enormously, as well.
The Smith Entertainment Group plans to invest $3 billion of its own money on this project. Anyone who discounts that investment, or the risk it poses to the group, doesn’t understand money and investments. If the project fails to generate the needed revenue, the Smith Entertainment Group would lose money.
If Salt Lake City approves a 0.5% sales tax increase later this summer, it would generate an estimated $900,000 in public investment, but spread over 30 years. The tax wouldn’t apply to groceries, car sales or other major purchases. The lion’s share of it — 75% to 80% — would be paid by businesses and people who don’t live in the city, according to the director of the Kem C. Gardner Policy Institute, economist Natalie Gochnour.
She added that an average household would pay between $120 and $150 more per year, while city residents would reap $3 in benefits for every $4 invested out of the sales tax hike. It is noteworthy that the state’s top Republican and Democrat lawmakers, as well as business and other community leaders, support this plan.
It’s not just about hockey
City planners like to refer to downtowns as the heart of cities, places that serve as community gathering places as much as centers of commerce. Downtown can define the image of an entire metro area, often with unique architectural jewels serving as visual symbols of place.
Seattle’s Space Needle comes to mind, as does New York City’s new World Trade Center, Paris’ Eiffel Tower or Chicago’s Willis Tower. By contrast, Los Angeles has been described as an “asparagus patch” because of its lack of distinctive architecture.
Salt Lake City already has a defining architectural focal point. The Church of Jesus Christ of Latter-day Saints (which owns this newspaper) is in the process of preserving and renovating Temple Square, funded entirely by the church. This square, with the iconic temple as its central feature, has been the state’s No. 1 tourist attraction, and it promises to be even more attractive to out-of-towners once the reconstruction is completed. That is a priceless gathering-place amenity in the city’s core.
The city also benefits from an outstanding light rail system. TRAX already provides easy and reliable access to many of the city’s religious, civic, sports and cultural gathering places.
Smith Entertainment Group principal Mike Maughan envisions a new sports, entertainment, culture and convention district that expands on the idea of a family-friendly gathering place, creating what eventually would become several such spaces intertwined with new construction. This would include eating establishments and retail, of course, but also places for festivals, watch parties and, hopefully in 2034, Olympic medal presentations. The district also would serve to connect the east and west sections of downtown, creating a flow of pedestrian walkways that brings vibrancy and life to the city center, while taking advantage of existing TRAX lines.
An unthinkable alternative
COVID-19 changed much about the way people live and work. Many businesses found that employees could work from home effectively through modern technology. Some have adopted hybrid schedules, in which workers come downtown only once or twice a week on alternating days. Many businesses no longer need the large offices they once had and are downsizing.
The result, according to a Brookings Institution report, is that the “specter of an office real estate apocalypse, ‘urban doom loop,’ transit death spiral, or ‘ghost towns’ is filling some urban observers with existential dread. So too are reports of rising crime and unsheltered homelessness in downtowns.”
Salt Lake City is not immune from these worries. Without a resurgence through new construction, new living spaces, new retail and new gathering places, downtown could easily deteriorate. The NBA and NHL could seek new venues in the suburbs. Cultural amenities and conventions could move elsewhere, as well.
Gochnour is matter-of-fact about what happens next. “If you let those go, the urban core declines because of their departure, it creates a vicious cycle and it’s very difficult to get out of it.”
Economic forces would pull people away from the core, making downtown less important in the lives of residents, whose gathering places would become far-flung and narrower in scope.
Because of this, she said, the Smith Entertainment Group’s plans should be seen as an investment, not a subsidy.
This is a unique moment in time. The Larry H. Miller Company announced plans to put $3.5 billion into a mixed-use development on the long-neglected west side of Salt Lake City, including a potential Major League Baseball stadium and plans to clean up the Jordan River and improve the Power District. Taken together, the multi-billion dollar private investments on the east and west sides of town by Smith Entertainment Group and LHM — 10 minutes from a brand-new airport — offer further evidence that Utah can become a crossroads of the world.
We encourage approval of the tax and the private investment that will enrich the state.