UTAH LEGISLATURE

MLB stadium financing plan gets House committee OK amid hotel industry concerns 

Feb 23, 2024, 4:40 PM | Updated: Feb 24, 2024, 2:06 pm

SALT LAKE CITY — The plan to help finance a major league baseball stadium, and the area surrounding it on Salt Lake’s west side, is moving forward at the Utah Legislature.  

A House committee voted 8-2 to advance HB562 Friday morning. 

Utah’s hotel industry has some concerns over the fact that hotel taxes across the state would go up.  

If this bill passes in its current version, hotel taxes would go up one-tenth of a percent immediately upon the governor’s signature. Lawmakers say that would help fund emergency services largely needed for tourism in rural Utah. 

Then, once a team is secured, hotel taxes go up by a total of 1.5%. That amounts to $3 per night on a $200-per-night hotel stay. Car rental tax would also go up an additional 1.5%. 

That overall increase is what’s concerning to some hotel industry representatives. Many who spoke at the committee hearing argued that their industry is bearing the brunt of this cost.

Our fear is that as more and more taxes get layered onto the transient room tax, the more difficult it is to be to sell rooms, and at some point, hoteliers are going to have to adjust their rates in order to compensate for that tax increase,” Jordan Garn, a representative for the Utah Hotel and Lodging Association, told KSL TV. 

Garn said that the association is very excited about major league baseball but still worries that the hotel tax hike falls on Utahns. 

The general consensus is that out-of-state residents are paying for this. That’s not necessarily entirely true. We know that about half of hotel stays in Utah are paid for by people that reside in Utah,” Garn said. “And so the more they start to lean on not only affects Utah consumers, but it’s also ultimately going to have an impact on the industry itself.” 

The bill’s sponsor says the cost increase is minimal and the economic benefit to the whole state is significant, touting the stadium as a possible winter venue or tour stop for major acts. 

“We think that this will open up Utah for the possibility to host a college football bowl game in the same way that the San Francisco Giants Park is host of a game. They host football games at Fenway Park in Boston. We think that that has a lot of benefits for tourism and so we’re asking tourism to contribute in a large way to the financing side,” said Sen. Lincoln Fillmore, R-South Jordan.   

Stadium deal ‘low risk’ to Utahns sponsor argues

Fillmore argued that this proposal was “very low risk” to Utahns, saying that the deal has several safeguards for the state.

According to the bill, the majority of the hotel taxes don’t go up until a team is secured via an expansion contract.  Secondly, the state owns the stadium, and is only on the hook for financing half of the cost, and caps the amount the state pays if the project goes over budget.

The Larry H. Miller group will be renting it back at a rate of $150,000 per month. And finally, the bill stipulates that if the team doesn’t work out for whatever reason, the owners have to pay back any taxpayer money that’s been invested.

The bill also immediately triggers the setup of the Fairpark district and board, which can levy a host of taxes just within the project’s boundaries to help offset costs.  The Larry H. Miller Group has also contributed $3.5 billion of its own money.

LHM CEO Steve Starks testified at Friday’s hearing, saying LHM plans to revitalize the Fairpark area on the west side of Salt Lake with or without a team coming here.

“We want to see a thriving development with or without baseball,” he said. “And this allows us to begin that process of remediation, infrastructure, Jordan River clean up, we want this to be a thriving area. And all of this is intended for us to be the most prepared market for baseball.”

The Legislature has five more working days before the session ends.

KSL 5 TV Live

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MLB stadium financing plan gets House committee OK amid hotel industry concerns