Salt Lake City approves agreement for bond-financed sports arena renovation

An agreement that could lead to the issuance of up to $900 million of bonds to finance the renovation of a major league sports arena in Salt Lake City and the development of a downtown district was approved late Tuesday by the city council.

The debt would be paid off with revenue from a 0.5%, 30-year hike in the city's 7.75% sales tax the council also passed unanimously.

The deal with Smith Entertainment Group, which is awaiting signatures from founder Ryan Smith and Salt Lake City Mayor Erin Mendenhall, was made possible by a 2024 Utah law that allowed for debt financing and a local sales tax increase.

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That law created an oversight Revitalization Zone Committee, which endorsed the agreement Sept. 17. 

The sales tax hike, which takes effect Jan. 1 and excludes groceries and other purchases such as cars and boats, is expected to generate $1.2 billion over 30 years.

The bonds' issuer could include the city, the state of Utah, a community reinvestment agency, or a public infrastructure district, according to the participation agreement, which allocates up to $525 million in bond proceeds for renovations to Delta Center and up to $375 million for the sports, entertainment, culture, and convention district.

Smith acquired the arena when he bought the National Basketball Association's Utah Jazz in 2020. 

In April, the National Hockey League Board of Governors approved Smith's purchase of the Arizona Coyotes, since renamed the Utah Hockey Club, which will also host games at the Delta Center. 

City Attorney Katie Lewis said the agreement marks "the beginning step in a 30-year relationship on the development of these three city blocks and the commitment for the two sports teams to remain in downtown Salt Lake."

Ahead of the votes, the city council heard comments from the public, with some voicing concerns, while a former Salt Lake City mayor said he will seek a voter referendum on the deal, according to a local media report.

 "Anything this large, anything this momentous, will require continuous vigilance," Council Chair Victoria Petro said. "But in this participation agreement, we have the infrastructure and the scaffolding upon which we can rely, and our constituents can rely."

Council members said the agreement will revitalize Salt Lake City's downtown and bring other benefits.

The deal calls for a $1 to $3 per ticket fee for any event at Delta Center to help fund affordable housing initiatives.