SEG set to finalize deal that keeps Jazz, Utah Hockey Club in Salt Lake City

Jazz and Utah Hockey Club owner Ryan Smith is close to finalizing a deal with Salt Lake City that would see the teams be required to play all of their home games in the Delta Center “for the next 30 years or face significant penalties,” according to a front-page piece by Gehrke & Miller of the SALT LAKE TRIBUNE. In exchange for $900M in public financing to “renovate the arena and develop a three-block sports and entertainment district,” Smith Entertainment Group would agree to pay up to $125M “if either team leaves the arena in the first 15 years” or $250M if both leave, with the penalties “decreasing by about” $16M a year after that. In addition, if both teams leave, SEG “could be required to repay whatever part” of the $900M it had received up to that point. Gehrke & Miller noted the participation agreement is a “critical step” in moving the downtown sports and entertainment district forward. It provides, “in broad terms,” the “vision for the district and conditions for the city agreeing to a half-percentage-point sales tax increase citywide.” The council discussed the proposed pact at its work session yesterday, but a “potential vote” on the accord was delayed to July 9. Salt Lake City Mayor Erin Mendenhall acknowledged that the project planning has been “rushed and doesn’t provide as much opportunity for public scrutiny and input,” but the city “has to meet the deadline” in the state law passed during the legislative session (SALT LAKE TRIBUNE, 7/2).

SERVICE FEE: In Utah, Dennis Romboy noted in exchange for $900M in public funding, SEG “intends to place a fee on tickets” to Jazz and Utah Hockey Club games “along with other arena events to create a city-controlled public benefits fund.” The tax hike is “anticipated to generate” $1.2B over the 30-year life of the agreement, $900M of which “would go to SEG.” The company estimates that it will spend $525M to “remodel to accommodate hockey and basketball” and $375M “on the other district improvements.” SEG “intends to invest” $3B of its own in the project. As part of the agreement, SEG would “impose $1 per ticket on tickets costing $25 or less; $2 per ticket for tickets costing at least $25 but less than $200; and $3 per ticket if the price is more than $200.” The money would be “spent on family-sized and affordable housing and other initiatives determined by the city.” The housing “would not have to be in the district” (DESERET NEWS, 7/2).