Salt Lakers would pay 20%-25% of sales taxes for downtown revitalization zone

A rendering of the proposal for the Downtown Revitalization Zone project presented to the Salt Lake City Council on June 11, 2024. (Screenshot of a Smith Entertainment Group presentation)

The Smith Entertainment Group made its economic pitch for Salt Lake City’s downtown revitalization zone as City Council members ask about more economic opportunities for Salt Lakers, like a minimum wage guarantee for those working at the Delta Center, and having plans for public transit, affordable housing and green spaces.

The group is seeking the Salt Lake City Council’s approval of a 0.5% sales tax increase to raise about $900 million to fund part of renovations for the Delta Center to host a National Hockey League team, and the redevelopment of three downtown blocks with a path traced by the Utah Legislature. 

According to a study by the Kem C. Gardner Policy Institute, about 75% to 85% of the tax increase would be paid for by businesses and non-residents of Salt Lake City, Natalie Gochnour, director of the Kem C. Gardner Policy Institute, told the City Council during Tuesday’s work session. That means 20% to 25% of the taxes would be paid by Salt Lakers.

“Salt Lake City residents benefit for $3 out of every $4 that are invested from this sales tax proposal because of their proximity,” Gochnour said. “And what do they get for it? They get a vibrant, growing, thriving, dynamic city.” 

The calculation comes a week after the Smith Entertainment Group released ticket prices for the first season of Utah’s NHL new team, which range from $44 to $290 for a single game and from $1,848 to $12,180 for the full first season.

For Gochnour, the project is more about people than sports, as the district, like other amenities in the city’s core, may attract a highly trained workforce to Salt Lake, she said. 

“If you let those (amenities) go, if the urban core declines because of their departure. It creates a vicious cycle and it’s very difficult to get out of it. And you end up having a doughnut. You have a hole in the middle and you have vibrancy on the outside,” Gochnour said. “The economic forces of decentralization pull people, jobs, commerce, away from the core. Sports, entertainment, culture and conventions bring them back.”

The institute estimates that every household could pay about $120 to $150 a year in the tax increase. But, Gochnour pointed out that making averages distort the numbers. 

“If you’re consuming a lot, (in a) wealthy household you’re paying a lot more than $150 per year,” she said. “And if you’re not consuming a lot, you might be paying $60.”

For some households, such as the west-side district that council member Victoria Petro represents, that 0.5% increase represents a lot, Petro said on Tuesday. She said she’s assuming that betting on sports, entertainment and conventions is not the full strategy. She asked Gochnour what other cities had done in conjunction with that sort of development.

“I want minimum wage guarantees for everyone who goes to work at that arena. I am pushing for everything I can, so it’s not just a few kids who can get into sports medicine, (but) every last one,” Petro said, “I’d love to be able to advocate for tickets. I’m advocating for livelihood for the people in my neighborhood who are struggling to hold on to generational real estate investments.”

Gochnour replied that the best thing they could do for low-income residents is to ensure the city is prospering.

“One of the best things we can do is integrate, not separate,” Gochnour said. “And you integrate by bringing more money into these neighborhoods and into the core. And it helps with upward mobility and helps with education and helps with public safety.”  

If everything goes as planned, construction may begin in April of 2025, said Mike Maughan, the principal from Smith Entertainment Group who will lead the revitalization zone project.

Council member Sarah Young asked Maughan to clarify some frequently asked questions. Maughan affirmed Smith Entertainment group isn’t looking to build a new arena, not all $900 million that the group expects to receive from the tax increase will go toward Delta Center renovations, and there will be opportunities for green spaces.

The Smith Entertainment Group hasn’t published any detailed renderings of its vision for the entertainment district. However, Maughan showed a new graphic with a general overview; a new front door for the arena facing a plaza, a tall residential building and a hotel. 

Rendering of the proposal for the Downtown Revitalization Zone project presented to the Salt Lake City Council on June 11, 2024. (Screenshot of a Smith Entertainment Group presentation)

The site of Abravanel Hall and the Salt Palace convention center is marked as a second phase of the project while Salt Lake County determines a path forward for those facilities. In that phase, Maughan said, there’s an intent to install a civic plaza.

“It’s very important that we have these third places, these gathering spaces where people can come whether that’s for an Olympic event, the Stanley Cup playoffs, and watch the NBA playoffs or NBA finals,” he said.

A helipad is not on the books, he also clarified, referring to a list of zoning uses the group submitted to the city that included the option. 

The group is also working with the state, Maughan said, because it is planning on taking a portion of 300 West — between 100 South and South Temple — underground.  

There are also plans to support underserved communities with workforce training and development, high school job shadowing opportunities, internship programs, youth athletics and tickets donations, Maughan said.

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