Why Salt Lake County's part in Delta Center district plans may not be finalized this year

SALT LAKE CITY — The ball is now in Salt Lake County's court when it comes to the future of a new sports, entertainment, culture and convention district surrounding the Delta Center. But don't expect an agreement soon.

A lease between Salt Lake County and Smith Entertainment Group over the two blocks east of the arena is now the largest requirement in a partnership agreement between Smith and Salt Lake City following the city's vote on Tuesday.

However, negotiations may not be finalized until potentially after the next legislative session, which ends on March 7, 2025, because of project costs, said Salt Lake County Mayor Jenny Wilson.

Per preliminary construction estimates compiled by the county, it will likely cost $800 million or more to renovate the Salt Palace Convention Center in the way envisioned in the project. Renovations to Abravanel Hall, which would be preserved in place, are expected to cost another $200 million.

That doesn't even take into account the cost of possibly demolishing and replacing other buildings, such as the Utah Museum of Contemporary Art, or the work to tunnel 300 West underneath a new public plaza that would exist between the Delta Center and the county land across the street.

"We recognize that the state is going to need to participate in some way," Wilson told KSL.com on Wednesday, later noting that the county anticipates requesting funding during the next legislative session to help pay for Salt Palace renovations.

"I think we all agree that leaning into a more complete reimagining of a Salt Palace is a benefit," she added. "We're working right now to address the complexities around that rebuild and do it in a way that benefits the community as a whole."

Smith is required to reach an agreement with the county by mid-2025. Land lease negotiations between the county and Smith Entertainment Group will likely include state lawmakers and Salt Lake City leaders because of the project's complexity. Each entity has team members going through various aspects of the plan and exploring all possibilities.

Other large entities have also been roped into the discussions, according to Wilson. The list includes The Church of Jesus Christ of Latter-day Saints, which owns several blocks of land next to the designated district.

An economic boom?

She and several downtown business leaders believe the massive overhaul of downtown is necessary, though.

County officials already had a desire to upgrade the Salt Palace and Abravanel Hall before the major downtown developments began this year. Those who oversee the facilities say the efforts to keep the Utah Jazz and Utah Hockey Club downtown opened an opportunity to strike on those plans.

It also opened the door to fix a big concern tied to the downtown layout: the Salt Palace's size. Those who rely on downtown traffic see the Salt Palace — covering about three blocks — as a downtown divider.

"There isn't a concerted effort to pull (downtown buildings) together," said Steven Brosvik, president and CEO of Utah Symphony, explaining that the Salt Palace effectively cuts Abravanel Hall off from the Gateway and the Delta Center, as well as the Capitol and Rose Wagner theaters. "We're a little bit on an island."

It may also solve a puzzling trend county tourism officials have noticed.

Downtown convention organizers are eager to book venues in the Hyatt Regency but less interested in booking the western end of the Salt Palace. In general, there's a high demand for hotel rooms even when some parts of downtown struggle to attract business, Kaitlin Eskelson, president and CEO of Visit Salt Lake, told KSL.com after an event about the district on Thursday.

She thinks reconfiguring the Salt Palace could make visitation more uniform and open the area to more activity. In addition, adjusting the building could allow for dueling conventions to occur simultaneously, which can drive up downtown hotel needs. The county estimates that changes would generate $85 million to $300 million in additional economic impact.

This, Wilson said, would potentially broaden the tax base by drawing more visitors who would pay the brunt of the 0.5% sales increase tied to the project.

Conventions, events and other leisure in Salt Lake County already contributed to about $5.8 billion in visitor spending in 2023, nearly half of the state's total, according to the University of Utah's Kem C. Gardner Policy Institute. Since groceries and large purchases like vehicles are exempt from the tax, it projects nonresidents will end up paying 75-80% of sales tax.

However, not everyone is sold on the tax. Several residents came to Tuesday's City Council meeting to voice their displeasure. Some wondered why it's needed when — with Salt Lake City in line to host the 2034 Winter Olympics — the area is likely slated to receive state and federal funding.

"It sounds like a 0.5% sales tax isn't a big deal, but ... every year there's always a project and something they want to do, and it's just this percent," said resident DeEtta Barta. "We really have higher taxes than we should."

Former Salt Lake City Mayor Rocky Anderson also tossed around the idea of creating a referendum to put the vote on the ballot, potentially overturning it.

Downtown business leaders say they hope that doesn't happen. Kitty Chau, director of sales at Le Meridien and Element Salt Lake City Downtown, said she believes the effort could be detrimental to the city.

"(The district) will be the force behind an economic boom for downtown development and job growth," she said. "Let's be bold; let's invest in our future. It's a bright one."

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