Potential new pro sports venues in Utah would come with tax increases

Now all Major League Baseball and the National Hockey League have to do is pick Utah.

There are no guarantees those leagues will locate teams in Salt Lake City, but state lawmakers set the table for construction of a ballpark on the city’s west side and hockey arena downtown should MLB and the NHL come knocking.

The future of pro sports in the state played a large role this year in the Utah Legislature, which wrapped up its 2024 general session late Friday. Early in the session, lawmakers passed resolutions supporting the Larry H. Miller Company’s efforts to land a baseball expansion franchise and Utah Jazz owner Smith Entertainment Group’s pursuit of a hockey team. They then passed two massive bills laying out how taxpayers would help fund new venues for the teams. The tax increases in the legislation are contingent upon having signed agreements with franchises coming to the state.

Gov. Spencer Cox said the bills are about much more than stadiums.

“It is about transforming downtown Salt Lake City as we prepare for the 2034 Olympics in ways that I don’t think any of us thought . . . and transforming the west side of Salt Lake that has been neglected for so long,” he said.

“Bringing hockey and baseball is a generational opportunity. Transforming multiple blocks of downtown Salt Lake City and the west side, that’s once-in-a-hundred years stuff.”

How much would a baseball stadium cost taxpayers?

The ballpark would be part of a $3.5 billion mixed-use development the LHM Company is planning on Salt Lake City’s long neglected west side, which includes cleaning up the Jordan River and improvements to the Utah State Fairpark. The company said it intends to build out the area with or without a baseball stadium.

HB562 created the Utah Fairpark Area Investment and Restoration District, covering the area north of I-80 between 1000 West and Redwood Road. A five-member board, including a west-side resident, will determine land use, recruit businesses, contract for public safety services and leverage growth in tax increment and sales within the area to pay for the improvements inside the district.

The stadium would be funded with private dollars, state sales tax revenue and rental car taxes, paid for primarily by out-of-state visitors. The district would have the ability to raise the car rental 1.5% for construction of a baseball stadium only if MLB awards Utah a franchise, with a 2032 deadline for that to happen. The law approves bonding for half the cost of a stadium up to $900 million. The state would own the ballpark and lease it back to a team for $150,000 a month for 30 years. If a team leaves the city before that time, it would have to repay the taxpayer-generated funds.

Lawmakers scrapped a plan allowing the district to raise the hotel tax for the ballpark after hoteliers, southern Utah leaders and some Republican legislators opposed the idea, arguing the increase would largely be borne by Utahns rather than tourists.

“The thing that I like most about the baseball stuff is it pays for itself, right?” Utah House Speaker Mike Schultz, R-Hooper, told reporters Friday. “And so if baseball doesn’t show up, the money doesn’t happen. If baseball does show up, it’s baseball that pays for baseball.”

West-side leaders favor the project. Sen. Luz Escamilla, D-Salt Lake City, said that for years there has been “complete dismissal of this community.”

“This bill brings hope to this part of our city,” she said. “There’s a lot of things that are missing in this part of town. This is the catalyst to make it happen.”

How much would a hockey arena cost taxpayers?

If Utah gets an NHL team, it would play in a new arena in downtown Salt Lake City as a key part of an ambitious plan to reimagine the city center.

SB272 would allow Salt Lake City to raise sales tax to create a downtown revitalization zone, including a potential NHL hockey arena.

Under the legislation, the city could raise its current 7.75% sales tax rate one-half of a percent — pushing it to 8.25% in the project area for no more than 30 years, provided it has a signed participation agreement from a major league sports franchise.

The bill allows for bonding so the increased tax money could go to fund a new NHL arena, renovate the Delta Center, or both, as well as infrastructure investments for a yet-to-be-determined area that the city designates. An earlier version of the bill allowed up to $900 million in the additional tax revenue for construction of an arena but that figure was removed in final legislation. A maximum dollar amount would be stated in the participation agreement. The law requires a team to pay back any tax money it receives if it leaves before 30 years.

“It’s obviously centered around remodeling the Delta Center and making sure that it can be both a basketball and a hockey venue,” Rep. Val Peterson, R-Orem, said during House floor debate on the bill.

There has been speculation that Utah Jazz owner Ryan Smith’s SEG would look to construct a new venue in a mixed-use development at the Point of the Mountain near the border of Salt Lake and Utah counties.

Schultz said that there was concern at the the start of the legislative session that downtown and maybe even the state would lose the Jazz. “That would have been detrimental, in my opinion, to Utah as a whole, including downtown Salt Lake,” he said.

The legislation ensures the Jazz and a possible NHL team stay in the capital city.

“The idea of professional sports in a city, in a downtown is the greatest anchor tenant that a city could have, hands down,” Smith told a legislative committee last month. “The opportunity to have multiple sports downtown can transform and revitalize and invest and grow a city in a way that is almost irreplaceable any other way.”

Lawmakers say the plan should be thought of as not just building an arena but building a city.

“Investing in downtown Salt Lake City isn’t just about bricks and mortar — it’s about creating economic reverberations that will ripple across the entire state,” said Sen. DanMcCay, R-Riverton, sponsor of the bill. “This effort is about looking creatively and collaboratively at ways we can use public and private partnerships to maintain our status as an economic powerhouse.”

Rep. Jon Hawkins, R-Pleasant Grove, said on the House floor, that it will bring the capital city to life again. “This bill is an effort to restore Salt Lake City to its once and future glory.”

The Church of Jesus Christ of Latter-day Saints, which has a large stake in the future of downtown Salt Lake City, issued a statement this week saying it’s “pleased with the potential this has to refresh and revitalize downtown.”