The Salt Lake City Council has unanimously approved a 0.5% sales tax hike to help fund a downtown sports, entertainment, cultural and convention district and given the project their final approval.
“I can look my constituents in the eyes and say in good faith that this investment — because it is not a subsidy, it is an investment in ourselves — is worth it,” council chair Victoria Petro said of her vote at their Oct. 1 meeting.
Petro emphasized that the sales tax will not apply to groceries and large purchases, like cars.
The Smith Entertainment Group, which is billionaire Ryan Smith’s company that owns the Utah Jazz and Utah Hockey Club, applied for the sales tax increase in April to help pay for renovating the Delta Center and “revitalizing” the blocks surrounding it.
Tuesday’s vote came after the city agreed on a deal with the Smith Entertainment Group to create the downtown district and give it a facelift. State lawmakers blessed the proposal too. The process was set up earlier this year during the 2024 legislative session. In addition to the sales tax, the council also gave its final approval to the participation agreement.
The project area is roughly between 500 W. to West Temple and South Temple to 200 S. The city estimates the sales tax increase will generate $1.2 billion, with up to $900 million going toward revitalization projects.
At least 37 individuals signed up for their final opportunity to speak on the issue during the hearing. Several individuals and local groups were in favor and saw the sales tax increase as an investment in the city’s future.
“We believe these ambitious public investments will enhance the region’s social, cultural and economic health. Conventions, sports and arts-entertainment are major drivers in the downtown economy,” said Jessica Thesing, with the Downtown Alliance and Salt Lake Chamber.
“Losing the sports culture and convention audiences would be devastating to downtown’s economy and weaken the core of our regional economy.”
There was also support from University of Utah President Taylor Randall, Kem C. Gardner Policy Institute Director Natalie Gochnour and Utah Symphony and Utah Opera board members. The council’s vote also included language that they will continue working with stakeholders to come up with a plan to preserve Abravanel Hall.
Those in favor generally focused their comments on the revitalization project instead of the sales tax.
But the proposal was not without its critics.
Opponents generally said they spoke as private citizens and not as representatives of groups. One resident declared “We, the citizens of Salt Lake City, are already over-taxed.”
With the Olympics returning in 2034, resident Jeff Novak told the council other sources of funding would be coming to the city and they didn’t need to spend public funds on this project.
Others pointed to economic research that says spending public funds on sports stadiums is generally not a worthwhile public investment.
In explaining why they were voting in favor of the project, council members focused on the public benefits that are in the participation agreement with Smith Entertainment Group. That includes funding for affordable housing, improvements to historic Japantown, workforce development, investments in art and increased walkability in the area.
Council members also said they plan to hold the Smith Entertainment Group accountable. Petro said she is proud of the outcome.
“This is a hard thing and a large thing, but I will not conflate the largeness with anything less than the goodness that we have squeezed out of this lemon — not for us, not for Ryan Smith, not for a hockey player. But for the city to which Ryan Smith, the hockey player, we owe so much. This is a good thing.”
The State Tax Commission is expected to implement the new sales tax in early 2025.
