Tuesday brought a difficult twist in Salt Lake City’s path toward overhauling its downtown core around the Delta Center into a new sports and entertainment district.
City Council members reluctantly went along with sudden changes in the latest state-crafted financial mechanism to steer up to $1.8 billion in future taxes toward overhauling the sports arena, the Salt Palace Convention Center, Abravanel Hall and a now-expanded footprint of downtown along with them.
They didn’t seem to relish this.
“We had no say. We had no options,” council member Victoria Petro said. “There is no decimal point here that has been taken with anything less than the gravest consideration.”
Ultimately, council members said their faith in the possibilities of a revitalized, more vibrant and connected downtown — and helping to keep the Utah Jazz and Utah Hockey Club based in the capital city — guided them beyond a sense of being rushed, if not steamrolled, in their decision.
“We are much better if we collaborate, work together and communicate together,” council member Dan Dugan told colleagues, “and not just bring things up at the last moment.”
A few weeks ago, the council members’ role in this step seemed rote, if a little technical:
Under state law, they were supposed to create what is known as a public infrastructure district, or PID. The idea was designed by state lawmakers for the Delta Center block, as part of streaming tax funds into the Convention Center Reinvestment Zone for a transformational set of renovations covering four blocks under and around the arena.
Then, late Friday, city officials and the public got hit with a last-minute change in the district’s boundary map and $300 million in revisions to crucial tax numbers underlying its finances.
That’s when a 13-member panel at the Governor’s Office of Economic Opportunity voted, with little notice, to add private developer The Ritchie Group’s two luxury hotels, apartment tower and parking facilities on an adjacent block, known as Block 67, into the public district’s perimeter.
City, school district and library officials say they are still sorting out what the changes will mean for how much tax money they will give up to fund the newly configured district over the next 30 years. And though not directly tied to its approval on the PID, by late Tuesday, the late-breaking shake-ups were clearly still sinking in and left council members rattled.
Their vote to create the PID was nonetheless unanimous.
‘Agonizing late hours’
After sweating details through the weekend, council members met behind closed doors for another 90 minutes past their public start time, before convening their meeting and voting in favor.
Council member Eva Lopez Chavez noted the city’s approval of the tax mechanism for the sports, entertainment, culture and convention district to reshape downtown was predetermined by state law, but she remained worried about the hazards of leveraging taxpayer funds for quasi-private benefits.
“I’m still concerned that it undermines public trust and exposes the city to long-term financial risk,” she told colleagues. “This is not sound public finance, nor is it reflective of the deal we made with our constituents.”
Developer Ryan Ritchie, founder and principal of The Ritchie Group in Salt Lake City, told the GOEO panel Friday that part of Block 67 was being added to provide “infrastructure” for the wider downtown development — in the form of hundreds of parking stalls to serve the Salt Palace and other upgraded attractions.
Petro said a wealthy developer had, in effect, bypassed city and county governments, as well as executives with Smith Entertainment Group, owners of the Utah Jazz, and sought state intervention to be added to the district, leaving the city scrambling to sort out the implications.
“We’ve spent agonizing late hours,” she said, “assessing what that means for us, for our constituents, for our future, for our revenues, for our expenses.”
Despite that and the 11th-hour notice, Petro said passing the PID “is going to make sure the bills get paid — and that is in every constituents’ best interest because it maintains your city’s place at the table. It maintains an influential voice.”
The state, Salt Lake County and city officials have been working with Smith Entertainment Group for almost 18 months on the contours of public-private financing for the venue overhauls and district development, along with the capital city passing a 0.5% sales tax hike to raise $900 million for it.
The fast-track addition of The Ritchie Group properties on Block 67 to the district passed 9-4, with state officials, legislators and a deputy county mayor in support.
Dugan was among those who urged the GOEO panel on Friday to delay its approval of adding parts of Block 67 to allow more time for officials to absorb its effects on diverting tax funds away from city services such as police, parks and road repairs.
The PID, he said Tuesday, “is a tool. It’s not a perfect tool. It’s the one we’ve been given. We need to make the best of it.”
‘Beneficial to our city’
Council members also looked to the huge potential gains from refreshes to Abravanel Hall and from restoring a downtown presence for Japantown as part of the new district. They’re excited about solving problems with east-west transportation across the city by reshaping portions of the Salt Palace.
The PID, in the end, was the only available means to get there.
“This investment of public dollars could be very, very beneficial to our city,” said council member Darin Mano. “I also think there’s a lot of ways that it can go wrong, so I’m urging all of those people that have more control on the minute details that actually matter a lot than I do, to keep us all in mind.”
Council Chair Chris Wharton used the analogy of a family car trip to say that while he shared misgivings, approving the PID was part of keeping the city’s active role in collaborating with other government and private partners to make the downtown district a reality.
The city might not always like how the process moves forward, he said, but it must stay engaged with other stakeholders.
“Salt Lake City needs to stay in on this trip,” Wharton said, “so that when we do have the decisions that we get to make and we do get to drive, we’re making sure that we’re representing the residents, and we’re doing that with integrity and fidelity.”
Council member Alejandro Puy said that while he was frustrated with flaws in the state-created financing tools the city was forced to use, “I am focusing on the positives for the future of downtown and positive changes to our economy.”
“I’m focused on the many decades of problems we couldn’t solve with the convention center,” Puy said, “and on the great things we can do together.”
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