A bill that would allow Salt Lake City to raise the sales tax to create a downtown sports and entertainment zone, including a potential NHL hockey arena, passed the Senate late Tuesday.
Under the revised version of SB272, the city could raise its current 7.75% sales tax rate one-half of a percent in the project area for no more than 30 years. The bill allows the local government to designate the area and requires a team to pay back any tax money it receives if it leaves before that time.
“It is a local option. We are not implementing it here at the Legislature. We’re just authorizing it to be charged,” Sen. Dan McCay, R-Riverton, said on the Senate floor.
Titled “Capital City Reinvestment Zone Amendments,” the bill passed 21-8 and now moves to the House.
Proponents of the bill say it would transform the city center.
“Instead of thinking about this as a hockey arena or a basketball arena, though that’s a worthy amenity, instead let’s think about our vibrant urban core that represents the Utah economy to the rest of the nation and to the world,” he said. “We’re not building an arena. We’re building a city.”
Will Utah get an NHL team?
Utah Jazz owner Ryan Smith is looking to bring a National Hockey League team to Salt Lake City. Last month, the Smith Entertainment Group formally asked the NHL to initiate the expansion process.
Smith has said the Delta Center — configured to seat around 14,000 for hockey — could accommodate a team as early as next year, and he has designs on building an arena dedicated to hockey in the future. There has been speculation that Smith would look south to construct a new venue in a mixed-use development called The Point that’s in the works at the former state prison site.
In addition to a hockey venue, the project area could include a reimagined basketball arena or one for both sports. The bill allows for bonding for up to $900 million for building or remodeling an arena.
McCay said Smith’s “original plan was not to do this” but saw what investing in downtown Salt Lake City could mean to the state.
“There’s always talk of public investment but the private investment will exceed the public investment, and that number has yet to really be focused on,” McCay said.
Sports center
Earlier Tuesday, Smith posted on X, formerly Twitter, a rendering of a bustling, but unidentified, downtown street with a brand new sports arena sporting a Jazz logo.
“Downtown Salt Lake City is the heart of Utah. Our efforts are not about an arena, it’s about revitalizing a downtown that desperately needs investment. Imagine a downtown experience like this with the NBA / NHL at its core,” he wrote.
Last week, Smith, Salt Lake City Mayor Erin Mendenhall, Salt Lake County Mayor Jenny Wilson and the Salt Lake City Council issued a joint statement saying they are working hard together to keep the Jazz downtown long term and attract an NHL team.
Mendenhall spoke in favor of the legislation at a Senate committee hearing last week.
“This bill is very exciting in how it can transform our downtown and better connect current entertainment offerings,” the mayor said.
Mendenhall, a Democrat, said it would link the east and west sides of downtown, including the Delta Center, Temple Square, the theater district, and the City Creek and Gateway malls.
Subsidy for the rich?
Though he voted in favor of the bill, Sen. Nate Blouin, D-Salt Lake City, said he was frustrated about how it was brought forward.
“We had recent meetings where it almost felt like a gun was being to our head and saying, ‘We’re going to take this thing and leave if we don’t get this,’ and frankly I don’t think that’s a good way to make policy,” he said.
Blouin also said he has concerns about lawmakers cutting taxes in one place and subsidizing the “very wealthy” in another.
“I can totally see both sides of this,” he said during the Senate debate. “I can see the rationale here in some of the things this brings, but still these subsidies really do concern me.”
McCay said the tax increase isn’t a subsidy but an investment in the state’s economic future. Utahns will reap a return in the form of an “amenity-rich” urban center that attracts and retains skilled labor, he said.
The bill also creates a committee to review expenditures in the project area and make nonbinding recommendations.