Utah passed bills for 2 new major league stadiums in Salt Lake City. Now what?

SALT LAKE CITY — Utah’s capital city is already home to the Utah Jazz; however, the efforts to bring in more professional sports teams certainly heated up during this year’s legislative session.

Utah lawmakers passed a pair of high-profile bills this year — HB562 and SB272 — that set up the framework to build a new ballpark and a new arena that could help the Beehive State land Major League Baseball and/or National Hockey League franchises within the next few years, should the leagues decide on Utah.

Gov. Spencer Cox is expected to sign both by his March 21 deadline.

Mike Maughan, representing the Smith Entertainment Group, the parent owner of the Jazz and the group leading efforts to attract the NHL, said the group is ready to host a team as early as next season. It would need a new arena for any long-term NHL team because the Delta Center’s configuration significantly reduces seating capacity to accommodate hockey playing surface measurements.

Utah is also in the running to be the temporary home of the Oakland Athletics, but the team would play in the Daybreak stadium that the Larry H. Miller Company is constructing for the Triple-A Salt Lake Bees.

The interest in both bills sparked a roundtable discussion Wednesday, hosted by the University of Utah’s Kem C. Gardner Policy Institute. Representatives behind both efforts, as well as Utah lawmakers, spoke about what both bills do and what happens next in the process.

Who pays for the stadiums?

The funding for both projects would come from some major public-private agreements hashed out in the final few weeks of this year’s legislative session. Just before HB562 emerged, Larry H. Miller Company officials announced that they would direct at least $3.5 billion toward investments in the Power District and Fairpark areas.

Amanda Covington, the company’s chief corporate affairs officer and a spokeswoman for Big League Utah, reaffirmed Wednesday that this private funding is not contingent on an MLB team. She believes the company will invest more in the area should Utah be elevated to the big leagues.

Maughan said Smith Entertainment Group expects to spend “billions” on the new arena and other downtown investments, but a ballpark figure is less known. He said the company is still working out details to determine the size of any projects, which will ultimately determine any costs.

At least $900 million, and likely over $1 billion in public money would go toward both measures, though.

SB272 now relies more on bonds that could be repaid through sales tax increases that would have to be approved by the Salt Lake City Council. That body has until the end of this year to make that decision. If approved, the rate is capped at 0.5% with a maximum period of 30 years.

A City Council spokesperson told KSL.com that the city is still reviewing the final legislation and determining timelines before it votes on the measure. Legislative financial experts estimate that the increase could generate $54 million to $83 million in new sales tax revenue every year, depending on whether other qualifying cities also enacted the tax.

Maughan didn’t have much to say when asked what Smith Entertainment Group would do if the City Council voted against the measure.

“We’ll cross that bridge when we get there,” he said.

HB562’s terms and timelines are a little more defined. It states that any state funding put toward an MLB stadium only begins when and if Salt Lake City receives a team by June 30, 2032. It’s estimated that the league will have made its expansion decision, including two new cities, by then. Certain local and statewide fees and taxes would be used to repay any bonds tied to the project.

Any state aid would be capped at $900 million and the state would also own the stadium, which would be leased to a team owner. There’s also a provision that the team would have to repay the state if it moved out within the first 30 years of the franchise agreement date.

Other factors in play

Securing the funding framework for a stadium essentially checked the last box off of Big League Utah’s list of major goals since launching last year, Covington said. The group will continue to work on wooing Major League Baseball but will wait and see if it has the market the league is looking for.

This could be one reason why national pundits are high on Utah’s capital. ESPN’s Jeff Passan reported last month that Salt Lake City and Nashville, Tennessee, are at the “front of the line” right now. However, a final decision is still likely years away, so a lot can change.

Big League Utah is using the state’s Olympics approach to try and stay ahead of the competition.

“If you look at the recent coverage, I think we’ve been very successful in demonstrating to the sports community (that Utah) is a ready market,” Covington told KSL.com.

Maughan, on the other hand, points out there are a few additional factors in play beyond the Salt Lake City Council’s decision. That includes a series of new plans for the downtown zone tackling issues tied to finances, land uses, public assets, public safety, homelessness mitigation, transportation and parking.

“There’s a lot of work left to do,” he said after Wednesday’s event. “There’s a lot of stuff that has to happen before this is for sure going to work — and everyone is lining up to try and do that work and try to make that happen. … We can’t just invest in the stadium; we have to invest in the whole area.”

Is it worth it?

A good deal of Wednesday’s roundtable discussion rehashed arguments that played out in the legislative process. The event focused more on the highlights than the concerns up until a section where the public got to ask questions.

Residents asked about the impact the stadiums could have, including housing affordability if the projects deliver as advertised. Salt Lake City resident Jeff Edwards said the city’s housing affordability situation is already in a “tough spot” and he’s concerned it could worsen.

“Affordable housing is a whitewashed term,” he said. “I hate to say it that way, but it gets batted around in lots of different ways and, unless something is done in a proactive way, the west side will be gentrified like other parts of Salt Lake City have.”

Sen. Lincoln Fillmore, R-South Jordan, and Rep. Sandra Hollins, D-Salt Lake City, noted the state made some affordable housing progress this year, but it’s a topic that’s picking up steam. They believe addressing affordability can also solve growing homelessness issues.

Sports economists have been split on the topic, but recent studies lean toward stadiums having little impact on the economy because the venues may just move a person’s discretionary spending from one entertainment option to another. David Berri, a professor of economics at Southern Utah University, told KSL.com last year that community bonding is a bigger benefit.

“The reason you do sports is that it makes people happy,” he said. “It costs money … but it makes people happy.”

Maughan and Covington disagree.

They believe the stadiums will be able to attract more residents who aren’t attending the currently available sports options, visitors from out of state, and even bring in events they haven’t been able to host before. This may include large musical artists like Taylor Swift when the stadiums aren’t being used for sporting events.

They, along with state lawmakers, say both bills go beyond stadiums. They’re both focused on improving Salt Lake City’s downtown and west side, which they say can be a catalyst for the statewide economy.

This may especially be the case for the city’s west side, which has historically not received much investment. Hollins said lawmakers became more comfortable with the investments when the state received commitments from private entities like the Miller Company.

“This area is long overdue for economic development and an economic boom,” she said. “But we want to make sure it’s done in the right way.”