A day after revealing its $900 million plan to build a Major League Baseball stadium in Salt Lake City’s west side, the Utah Legislature revealed its $1 billion plan to create a new National Hockey League arena in downtown.
Sponsored by Sen. Dan McCay, R-Riverton, SB272 puts much of the decision-making power in the hands of Salt Lake City by letting the municipality create a sports and entertainment project area of up to 50 acres, allows bonds to be issued to build an arena and other infrastructure within that area and to impose a 0.5 percentage point sales tax increase citywide, in order to pay off those bonds.
If approved by the Legislature and then the city, the increase would raise the city’s sales tax from 7.75% to 8.25%.
The money would be used to build a stadium that could be a new home for the Utah Jazz, a venue for a future professional hockey franchise — something Jazz owner Ryan Smith has been aggressively pursuing — or both.
The bill is silent on how much money would flow to the project, but McCay said the projections are that a citywide tax hike would generate roughly $1 billion over a 30-year span.
“This is an important investment that protects the capital city and preserves downtown as a vibrant cultural, entertainment, and economic hub for the entire state,’ McCay said.
In addition to the arena, the money could be spent on other entertainment and recreational uses within the designated project area, as well as infrastructure, traffic and pedestrian improvements and any security needs in the area.
McCay’s bill is scheduled for a hearing before the Senate Revenue and Taxation Committee on Thursday afternoon.
The bill comes as Smith is pursuing an NHL expansion franchise and Gail Miller and the Larry H. Miller Co. are courting a Major League Baseball expansion team.
On Tuesday, Rep. Ryan Wilcox, R-Ogden, unveiled his long-awaited bill that would create a new Fairpark Area Investment and Restoration District along North Temple west of downtown Salt Lake City and give the board governing the district the authority to issue up to $900 million in bonds to pay for a new baseball stadium.
The bonds would be repaid with revenue from a hotel tax increase statewide. Other infrastructure and amenities in the project area would be subsidized by sales and property tax revenues, an energy tax, a telecommunications tax and a resort tax collected in the project area.
Both the NHL and MLB have expressed interest in expanding into new cities, although ESPN reported this week that baseball likely won’t announce any expansion plans for at least a few years while it renegotiates its contract with the players’ union.
Nashville and Salt Lake City are considered the frontrunners for the new MLB franchises, and Utah is one of a handful of states that is a likely home for a new hockey team. There has also been discussion of the Phoenix Coyotes relocating to Utah, as well.
Whereas the Fairpark district would be governed by a board appointed by the governor and legislative leaders, the Sports and Entertainment Project area would remain under the control of Salt Lake City with a review committee made up of legislators and the governor’s appointee.
The House Government Operations Committee will hear initial public comments on the Fairpark district at 8 a.m. Friday morning.
A spokesperson for the Smith Entertainment Group was not immediately available for comment.
The sports spending spree has already drawn some critics.
Advocates for affordable housing and the homeless have urged lawmakers to put as much effort into alleviating the burden unaffordable housing prices have put on low-income families as they are into sports venues.
And Kevin Greene, state director for Americans For Prosperity, a group that advocates for limited government, said his group is launching a grassroots effort to oppose the taxpayer financing of the stadiums.
“The studies all show that taxpayers do not ever win when we start paying for these types of things. It’s a lose-lose situation for everyone,” he said. “I really hope that Utah lawmakers think twice and Utah taxpayers step up and fight against this.”
