SLC Council votes unanimously to endorse revitalization zone deal with Smith Entertainment Group

The Salt Lake City & County Building in Salt Lake City is pictured on Wednesday, January 3, 2024. (Photo by Spenser Heaps for Utah News Dispatch)

The Salt Lake City Council voted unanimously to endorse a participation agreement between Smith Entertainment Group and the city. The action is a step closer to increasing Salt Lake City’s sales taxes by 0.5% to remodel the Delta Center and revitalize the two blocks east of the arena.

Apart from that, the city also voted to approve the creation of a project area of up to 100 acres surrounding the Delta Center that would become a sports, entertainment, culture and convention center.

The vote is one of the steps that SB272 , or the Capital City Revitalization Zone bill, delineated to take the action to accommodate Utah’s new National Hockey League team in Salt Lake City’s downtown. The agreement now goes to the Revitalization Zone Committee — formed by four legislators and another member appointed by the governor.

“When all of us were sworn into office, we promised to execute the duties of our office with fidelity. This is one of those moments where we can look at ourselves in the mirror and say we’ve done that,” Salt Lake City Council Chair Victoria Petro said on Tuesday.

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Other council members, such as Alejandro Puy, also applauded the list of public benefits included in the agreement, arguing that “the success of downtown is the success of every district in the city,” and that this is an opportunity that may never repeat. Others called it “a transformational step” and “a monumental investment.”

The Revitalization Zone Committee has 30 days to review the agreement and discuss it in a public meeting. The legislative group could send back the agreement to the city with comments, restarting negotiations between Smith Entertainment Group and the city for another deal.

If the committee approves it, it goes back to the city for a final vote to potentially approve the sales tax increase.

Smith Entertainment Group estimates spending $525 million remodeling Delta Center

In a joint statement, Salt Lake City Mayor Erin Mendenhall and Mike Maughan, a Smith Entertainment Group executive and project principal, applauded the action and said there is still a lot of work ahead in collaboration with government and community partners.

“Tonight’s unanimous vote by the Salt Lake City Council is an important endorsement and positive step toward creating a Sports, Entertainment, Culture, and Convention District in the heart of downtown,” Mendenhall and Maughan wrote. “We are grateful for the Council’s support of this vision that will create a more activated, connected, and family-friendly future for Salt Lake City.”

Last Tuesday, the city released its participation agreement draft, which included more details on the public benefits Salt Lakers would get out of the $900 million the tax increase is meant to raise.

The approved motion included other highlights, such as a development agreement with construction mitigation plans that would tackle the likely disruption of the flow of pedestrian and vehicle traffic and any negative impact on residents and businesses in the area.

There would also be a prioritization of transit development, with Smith Entertainment Group and Utah Transit Authority coordinating to create transit programs and incentives to promote ridership to the district, Council Member Eva López Chávez said in her motion to endorse the deal.

A couple of hours before the vote, Katie Lewis, Salt Lake City’s attorney, briefed the council on the agreement’s most prominent points: Smith Entertainment Group estimates that $525 million will be used on the remodel of the Delta Center and $375 million will go to cover costs to develop the district. And, there would be public benefits, such as an account funded from a new Delta Center ticket fee to spend on family-sized and affordable housing, among other city initiatives.

The company also agreed to host all NHL and Utah Jazz home games at the Delta Center. If either the NHL or NBA team leave within 15 years of the agreement, Smith Entertainment Group must pay $125 million. If both of them leave, that number would rise to $250 million. That amount would be reduced by $16 million each year after that initial 15-year term and reduced to zero by the end of the 30 year contract.

All construction funded by the public money must be completed within 10 years of the agreement’s approval. Additionally, there must be funds allocated for public art and to revitalize Japantown — a downtown stretch on 100 South in between 200 West and 300 West, the remaining piece of what was once a large community of Japanese Americans.

The Japantown investment was one of the items Council Member Darin Mano, who is of Japanese heritage, had been most nervous about in previous meetings. However, he said he was grateful for what came together.

“I know we didn’t get everything we wanted in this participation agreement, but please stay at the table,” Mano said. “We have a lot more work to be done and many more opportunities to fight for Japantown.”

The agreement also includes other workforce development initiatives specially for low-income individuals, youth programming, and free and subsidized tickets.

SLC residents push for affordable housing, arts preservation in downtown revitalization zone

During the earlier council work meeting, Victoria Petro, the Salt Lake City Council Chair strongly advocated for the agreement, arguing that this is a chance to transform a piece of property that is “functionally fallow,” disruptive to walkability, and that contributes very little to power sustainability.

She lauded that Smith Entertainment Group entered the conversation in good faith, adding that this would represent an important investment as many philanthropists are “tapped out post-COVID.”

Petro also acknowledged Salt Lakers’ fears, but said she would even put her reelection hopes at stake to defend the project.

“Our community needs a win, and I’m just really proud that we were able to do this. I have said a million times this week that I’d rather be short tenured and effective than long tenured and waffling,” Petro said. “If I lose reelection because I’ve done something bold in the best interest of the city, that protects the young people who need the jobs, that promotes walkability and sustainability, that promotes vibrancy, I will happily retire.”

Some members of the Japantown community thanked the council during a general public comment period after the vote. Some added requests to those appreciation comments, such as construction considerations.

“I remain optimistic that the City Council and SEG will maintain their commitment to supporting the two churches in Japantown. Furthermore, I trust that the City Council and SEG will facilitate, rather than impede, the churches in their ongoing operations,” Kristine Aramaki, a member of the Japanese Church of Christ, said on Tuesday. “It is important to acknowledge that the closure of 300 West will block a significant access point to the Japanese Church’s parking lot, impacting attendance at the Sunday services and other daily activities.”

Other commenters, though, showed up to speak against the tax increase and using public funds for the project. Some criticized that the project would benefit a billionaire, while imposing a tax to those “who can least afford to pay it”

“I’m so disappointed you’ve heard hundreds, if not thousands of people who have spoken out against this collaboration, or whatever it is. And again, hockey arenas do not increase foot traffic to nearby businesses, and arenas are proven to only shift economic spending, not create new spending,” Kseniya Kniazeva, president of the Nomad Alliance, said during the public comment period, questioning how residents would be allowed to bear the cost of the tax with the current inflation levels and an affordable housing crisis.

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