Ryan Smith wants control of at least three downtown blocks, unlimited building heights and a whole lot of public money as part of a deal to bring an entertainment district to Salt Lake City.
Those details came from an April 4 application the billionaire pro sports tycoon submitted to the city, kicking off negotiations for creating the new downtown district.
The city initially denied The Salt Lake Tribune’s open records request for the application, citing business confidentiality, but said Thursday that Smith Entertainment Group (SEG) ultimately waived its claim to withhold the record.
The application is the first part of a process laid out by SB272, the bill Utah lawmakers passed this year to pave the way for putting a billion dollars of public money into the sports district. The legislation allows Salt Lake City to raise its sales tax rate by half a percentage point to create revenue for the project area.
Smith, who last month scored a deal to bring a National Hockey League franchise to Utah’s capital, intends to host both the new team and his Utah Jazz in the Delta Center.
His application to create a new district calls for:
• A new 99-year lease for the block now home to the Delta Center.
• Leasing two blocks east of the Delta Center from Salt Lake County.
• Allowing SEG to keep the money generated by the sales tax increase for 30 years — except for a 1% administrative fee paid to the city and whatever the county and Smith’s group agree to use for renovations to the Salt Palace Convention Center.
(The Legislature estimated the city’s sales tax increase would amount to about $54 million a year. The law includes limitations for how Smith can spend the money.)
• Lifting caps on building heights and allowing arenas, stadiums, heliports, and commercial and off-site parking as permitted uses in certain downtown zones.
• Potentially requiring tax increment financing, a tool that allows developers to tap new property tax revenues created in an area.
• The creation of a public infrastructure district. Such districts are able to issue bonds for things like roads.
The application says tax increment financing will be justified based on the anticipated positive impact of the project, including job creation and retention, improvement of property values, attracting additional investment, increasing tax revenue, sprucing up the area and enhancing entertainment opportunities.
“SEG believes the project area and the surrounding areas will become a desired destination,” the application states, “where both Utah residents and tourists will want to regularly visit, shop, recreate, gather, work and live.”
Andrew Wittenberg, spokesperson for Mayor Erin Mendenhall, said that the amount of public financing required to pull off the project is yet to be determined.
“The city anticipates Salt Lake County and the state of Utah will have different needs and abilities to contribute to the project, not solely city taxpayers,” he said in a statement. “We look forward to working with SEG and other stakeholders as the project moves forward.”
In a statement Friday, county Mayor Jenny Wilson said officials are “thoughtfully evaluating” how the proposed district may affect the Salt Palace, Abravanel Hall and the Utah Museum of Contemporary Art.
“Salt Lake County remains committed to our key partners,” Wilson said, “as we work through this exciting next phase of growth and development in downtown Salt Lake.”
City Council Chair Victoria Petro said any approach to public financing with a private entity should be done with skepticism. If SEG were only seeking investment for an arena, Petro said, public financing would be a nonstarter for the council.
Any public funding that is on the table, the council chair said, will come with a negotiation.
“For us, it’s a matter of making sure if we go down these paths, that it’s something that truly brings about a positive change for the whole city at large,” she said. “No one is closed off to any options, but, again, everything is so conceptual that it would be naive for us to close ourselves off to any options.”
Rusty Cannon, president of the Utah Taxpayers Association, said his organization was neutral on the arena district legislation and that the proposed sales tax increase was the only public funding he was aware of before Smith’s application was released.
“This is a new development,” he said. “We need to take a further look at it.”
The creation of the district relies on the Salt Lake City Council to approve the requested tax increase. The council is expected to hear more details about the proposal at its Tuesday meeting.
A spokesperson for SEG declined to comment on the application ahead of the that council meeting.
— Tribune reporter Andy Larsen contributed to this story.
