A comprehensive look at what’s at stake for downtown Salt Lake City

As the Salt Lake City Council prepares to vote next week on raising the sales tax rate for an ambitious downtown revitalization project, perhaps the largest stakeholder in the urban core is carefully watching the proceedings.

The Church of Jesus Christ of Latter-day Saints does not have a financial stake in the Smith Entertainment Group’s proposal for a sports, entertainment, culture and convention district , which includes renovating the Delta Center to accommodate the new Utah Hockey Club along with the Utah Jazz. But the church does have “a shared interest with other stakeholders in the community” and in having “a vibrant downtown.”

“We will be neighbors. We are neighbors today. The entertainment district that they’ve talked about runs parallel to Temple Square and so of course we have an interest in what happens there. But we think it’s an exciting proposition and there’s a lot of interest in what they’re doing,” Bishop L. Todd Budge, second counselor in the church’s Presiding Bishopric, told the Deseret News in an interview.

Bishop Budge said SEG and the church have had “general conversations” that have been “amicable” and in a “spirit of collaboration.” The company, he said, has been open and transparent.

“I think they’re sensitive to what our concerns are. We’ve had an interest in what they’re planning to do. Obviously, we’re not partnering with them. We don’t have a business interest in what they’re doing in any way. But we just have a shared interest in making the community a great place to live and to work and worship,” he said.

Downtown transformation

The church is in the middle of strengthening and renovating the Salt Lake Temple. The surrounding area on Temple Square and Main Street plaza near the Church Office Building are also undergoing renovation and restoration. The south visitors’ center was demolished and construction crews are building pavilions and a new guest building. The above-ground pavilions will offer direct and unobstructed views of the temple, according to the church. The cement wall around the square also was removed to make it more open and inviting, Bishop Budge said. The work is expected to be completed at the end of 2026.

SEG plans to put $3 billion into a sports, entertainment, culture and convention zone covering a three-block area east of the Delta Center. The proposal includes reconfiguring the arena entrance to face east, pedestrian plazas, taking 300 West underground between 100 South and South Temple, and building a residential tower and a hotel. The plans, which aim to better connect the east and west sides of downtown, could impact the Salt Palace Convention Center, Abravanel Hall, Utah Museum of Contemporary Art and Japantown Street.

In documents filed with the city, SEG said the project could include substantial redevelopment, urban renewal and reconstruction, including the rerouting, permanent closure and/or bridging of some surrounding streets. The company also wants to revise zoning ordinances to raise the maximum height limitation from 125 feet to 600 feet in the project zone.

The Salt Lake Planning Commission recently sent the City Council a negative recommendation on the project, saying the changes don’t align with the city’s downtown plan or existing zone purposes. The commission recommended buildings like Abravanel Hall be protected and a buffer zone be created to preserve Japantown.

Under a law passed by the Utah Legislature earlier this year, Salt Lake City has until Sept. 1 to reach an agreement with SEG on a development plan.

“I think what’s been impressive to me is that they really are looking to have a more cohesive, coordinated, planned downtown district that really works for everyone, the flow of traffic, the flow of pedestrians, the accessibility of the venues,” Bishop Budge said.

“We’ve talked to the state leaders, county leaders, city leaders, private citizens and others and it really is a special time right now where everyone is excited about the potential, the possibilities going forward,” he said. “There seems to be a real spirit of let’s do this together, let’s seize the moment, if you will, and really do something special.”

Though not in the proposed revitalization district, Temple Square and City Creek Center — a mixed-use development that straddles Main Street just south of Temple Square — will be integral parts of a reimagined downtown. Temple Square is the city’s biggest attraction and rivals Zion National Park as the biggest destination in the state, both drawing about 5 million visitors a year. The Eccles Theater on Main Street and the church’s 21,000-seat conference center also bring crowds to Utah’s capital.

“I think they’ll want to be connected with us. I think people would want to be connected with the mall,” Bishop Budge said.

Salt Lake City Council Chair Victoria Petro described the revitalization plan as “transformational” and “generational.”

“This is a catalyst. And catalysts can either burn down your house or they can make chemical reactions that create steel, which is something that’s even stronger than what it started out and can be used to build,” she said. “My intention is to use this catalyst to turn us into steel, make a stronger city for whatever comes next.”

Will sales tax go up?

The Salt Lake City Council is considering whether to raise the city’s sales tax rate 0.5%, generating an estimated $1 billion over 30 years for the project. SEG has said about $550 million of that would go to renovating the arena and creating a promenade. Another $300 million would go to the culture and convention blocks in the district, which include the Salt Palace Convention Center and Abravanel Hall.

Next Tuesday, the council will discuss a proposed participation agreement that outlines how the city and SEG could use the sales tax revenue to develop the project area.

“Salt Lake City and Smith Entertainment Group continue to negotiate and finalize the terms of a participation agreement that will mark the first step towards a generational investment in downtown Salt Lake City. Salt Lake City leaders and SEG executives aim to finalize the agreement and transmit it to the City Council early next week,” according to a joint statement Friday from the mayor’s office and SEG.

A vote on the tax increase and participation agreement is scheduled for July 9.

Petro described opinions on the proposed tax increase as a “mixed bag,” but said most of her constituents favor it with some conditions, such as improving transit, providing affordable housing, creating jobs and correcting historic failures when it comes to Japantown, a once thriving enclave that has been almost completely displaced over the years.

“Not one inch of land, not one penny of funding is being taken for granted or flippant. It is not just to hand over a subsidy to someone. The betterment of the city to the betterment of the people who live and visit here is the crux of every decision,” she said.

Keven Rowe, a real estate attorney with Buchalter in Salt Lake City, said he can’t imagine the council not approving the tax increase given the momentum the new NHL team has generated. But there’s a question about whether the project benefits the people whose sales tax is going up and whether the funds are a public investment or subsidy for wealthy developers.

“That’s the question of the whole proposition, right? Is that fair and does that actually really make sense for the average Salt Lake City resident?” Rowe said. “That’s the political balance that people have to thread with respect to this. That’s why you see the sales pitches that you see, which is it’s obvious that money is going to people with money. So the question is, is that OK or not?”

Natale Gochnour, an economist and director of the Kem C. Gardner Policy Institute, told the council earlier this month that 75% to 80% of sales tax is paid by businesses and nonresidents of Salt Lake City. She estimated that Salt Lake City households would on average pay about $120 to $150 a year in additional sales tax. The increase would not apply to groceries and major purchases like vehicles. Salt Lake City residents, she said, benefit for $3 out of every $4 that are invested from the sales tax proposal.

The Utah Taxpayers Association is neutral on the proposed sales tax increase.

“It’s not the perfect way to do it, but it’s a fair way to do it,” said Rusty Cannon, association president.

A better model, he said, would be a user fee attached to tickets for hockey and basketball games, noting that gate fees paid for the Salt Lake airport reconstruction. But he said the $3 billion SEG intends to put up is “no small amount” and raising the sales tax is a “fair trade off.” Also, Cannon said there’s credence to the idea of preventing downtown decay.

What happens if the council doesn’t approve the tax hike?

“Look, I think we’ll have to look at that when we get there. But without public investment in what is a huge asset to the public, which is this entire district, then we’ll have to have other options available to us. But we are committed,” Mike Maughan, SEG principal on the downtown project, told KSL-TV earlier this month.

Before state and local government leaders persuaded SEG to stay in the city center, the company eyed vacant land at the south end of the Salt Lake Valley to build a sports and entertainment district with a hockey-specific arena.

Bishop Budge said the church wasn’t involved in those discussions.

“It was not critical to the church. We pretty much stayed out of that decision, let that happen. I think it’s a positive thing for Salt Lake City that they did decide to stay. If they hadn’t, the church would have gone on. We would have been OK,” he said.

Public investment vs. public subsidy

Whether taxpayers’ dollars are a good investment in sports stadiums and arenas is subject to debate.

Between 1970 and 2020, state and local governments devoted $33 billion in public funds to construct major-league sports venues in the United States and Canada, with the median public contribution covering 73% of construction costs, according to a 2022 academic study titled, “The Impact of Professional Sports Franchises and Venues on Local Economies: A Comprehensive Survey.”

The research, which analyzed more than 130 studies spanning 30 years, concluded that sports teams and facilities have little to no tangible impact on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.

Spending on sports games does not imply new net spending within a metropolitan area, according to Andrew Zimbalist, a Smith College economics professor. “Most residents have a budget. When they spend, say, $200 to take their family to a game, it is $200 that they do not have to spend at a restaurant, a theater, a bowling alley or other entertainment venues,” he wrote for EconFact .

The authors of the study also found that the economic research identified some intangible benefits from sports teams, including quality-of-life amenities, consumer surplus and community pride.

Petro said the city isn’t asking anyone to fund and subsidize a sporting event. “We are using the arena and the need there to catalyze a transformation in the downtown landscape,” she said.

“Economics is, yes, financial, but it is human behavior,” she said. “Because economics isn’t just finance, because it’s human behavior, we are absolutely going to be able to leverage this opportunity to benefit our local economy in ways we haven’t seen before.”

Maughan said the Jazz, the hockey team and other events at the Delta Center are expected to bring $600 million in economic impact to Salt Lake City every year, citing a 2022 GSBS Consulting report and 2024 DA Davidson analysis under peer review by the Kem C. Gardner Policy Institute.

But he said the project isn’t just about sports and entertainment but creating a downtown experience.

“This is about bringing culture and conventions, activation, flow, walkability and investment into a downtown core,” he said. “And so when you’re doing something that different, that’s where it takes public investment to do something that is for the public. And that will mean something very valuable to the city, county, and state and region for decades to come.”

SEG, Maughan said, wants to make sure there are benefits to residents even if they never buy a ticket to a hockey or basketball game or go to the symphony or attend a convention.

Gochnour said the project should be viewed as an investment, not a subsidy. A bustling downtown attracts talented people to the workforce and becomes a major economic driver for the area, she said. The economic goal isn’t entertainment, she said, but human capital.

“One of the principals of a public-private partnership is that those who benefit the most have to have skin in the game,” she said. I think there are all sorts of ways to structure this so that it’s not a hardship. But I’m very mindful of when you invest in the core it benefits the regional economy.”

Gochnour told the council that sports, entertainment, culture and conventions are vital to keeping downtown vibrant.

“If you let those 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,” she said. “The economic forces of decentralization pull people, jobs and commerce away from the core. Sports, entertainment, culture and conventions bring them back.”

As home to two, possibly three major league sports teams, if baseball comes, along with the symphony, opera and ballet downtown, Salt Lake City can distinguish itself from other cities, Petro said.

“That’s a market where people can raise their families. That’s a market where Fortune 500 companies send their workforce to live. It’s a distinction and it’s something that sets us up for future successes,” she said.

Real estate puzzle

Dealing with the property between the Delta Center and the Salt Palace and Abravanel Hall will be tricky because SEG is “not sitting on a piece of dirt. They’re sitting on a piece of dirt with buildings,” Rowe said.

“I think the real estate side is yet to be determined whether that’s going to be developed in the way that Ryan Smith envisions it. I know he wants to have a direct link through that property to the Delta Center, which would be great. But all that property is kind of in the way,” he said. “I think the real estate puzzle is going to be really interesting to see how they figure that out.”

The proposed downtown district would also impact a historically and culturally significant street known as Japantown. Construction of the Salt Palace in 1969 and expansion in the 1990s all but wiped out the Japanese community, leaving only a small section of the street west of what is now the Salt Palace Convention Center that claims the honorary name Japantown Street. The Salt Lake Buddhist Temple and the Japanese Church of Christ are the last remaining landmarks.

More recently, the 700-room Hyatt Regency on West Temple with two large ballrooms and access to the Salt Palace was built to retain and attract more convention business.

City and county leaders have said they want to ensure Japantown remains part of the community. Petro included it on her list of “things that I’m trying my hardest and willing to fall on my sword in order to make happen.”

Maughan told the City Council earlier this month that Abravanel Hall and Salt Palace Convention Center, both Salt Lake County facilities, aren’t part of the company’s initial plans but would be considered in phase two. The future of Abravanel Hall, home of the Utah Symphony, particularly has generated impassioned pleas from the arts community to keep it intact. Salt Lake County has a master plan to update the building, built on land donated by The Church of Jesus Christ of Latter-day Saints, but lacks the funds for the estimated $200 million price tag.

One piece of prime real estate adjacent to but not part of the proposed revitalization is the parking lot the church owns kitty-corner to the Delta Center and just east of the Triad Center known as Block 85.

“We know that that’s an important piece of property,” Bishop Budge said, noting that the church is thinking through the future of the block but there is “nothing that we can really share right now with what the future holds for that piece of property.”

Rowe estimated it could take five to 10 years to complete the downtown revitalization project.

Should it take a decade, it would be ready for the 2034 Olympics, which Salt Lake City will be awarded next month.