Salt Lake and Smith Entertainment Group downtown plan includes ticket fees, contract terms revealed

SALT LAKE CITY — The unofficial terms of the contract between the Smith Entertainment Group and Salt Lake City to create a revitalization zone were made public Tuesday, and a key provision sets money aside from every ticket sold at the Delta Center to be handed back to the city.

NOTE: The full document is at the end of this story.

That’s just one provision of the contract which also sets up several other “public benefits” that the two sides have come to terms on.

Smith Entertainment Group and the city still need to approve this contract, known as the participation agreement, before Salt Lake City votes to increase the sales tax for city residents up to .5% to help fund Delta Center renovations and revitalize the two blocks east of it.

“We feel great about public benefits, about the security of the teams, about the revitalization of so much more than just the Delta Center,” said Salt Lake City Mayor Erin Mendenhall directly following a city council work session unveiling the plans.

Smith Entertainment Group also expressed its confidence in the agreement.

“We’ve said many times that if you gave us a perfect arena and nothing else, we wouldn’t do this. There’s a lot of other options we have. This is because we’re invested in Salt Lake City. We’re invested in this community. And we’re invested in the state of Utah to lift everybody up,” said Mike Maughan, SEG executive and principal on the downtown project.

The draft terms allow SEG to use up to $900 million from that revitalization tax in Salt Lake City over 30 years. In exchange SEG has agreed to a host of conditions like the ticket fee, developing the workforce, maintaining gathering spaces, revitalizing Japantown and, starting next July, keeping all home games of both the Utah Jazz and Utah Hockey Club at the Delta Center.

Smith Entertainment Group estimates it will spend $525 million of the tax increase for the Delta Center remodel and $375 million for other improvements of the downtown-area district. It estimates the plan will generate approximately $1.2 billion in revenue over the life of the agreement.

The company will be required to complete renovations to the Delta Center to make it “a first-class” arena for the NBA and NHL teams.

#BREAKING: Here’s the highlights of the contract proposed between the Smith Entertainment Group and SLC to revitalize downtown. If finalized, SEG would charge $1-$3 per Delta Center ticket to be kicked back to the city to be used for housing and other benefits.

Tax split… pic.twitter.com/xRherWJcY9

— Lindsay Aerts (@LindsayOnAir) July 2, 2024

Proposed public benefits

The proposal would include a ticket fee, starting July 1, 2025, for each ticket sold for events at the Delta Center.

For events $25 or less, the fee would be $1. For tickets priced between $26 and $200, the fee is $2, and for tickets sold for more than $200, the fee is $3. The fee will go to a public benefit account for family-sized and affordable housing and other public benefits.

The Smith Entertainment Group will also support community and workforce development initiatives with apprenticeships, college internships, high school shadowing programs, annual lectures at Salt Lake City high schools and middle schools, youth programming for basketball and hockey, and free and subsidized tickets.

Under the proposal, Salt Lake City will receive up to 1% of the tax over 30 years to reimburse it for district-related costs.

A rendering of a proposed “sports, entertainment, culture and convention center” surrounding a renovated Delta Center. (Smith Entertainment Group)

Gathering spaces

The agreement also states the Smith Entertainment Group will design “gathering/event/plaza spaces that will welcome members of the community to downtown Salt Lake City.” These will include an outdoor event space, walking connecting public streets to the district, landscape features and “other elements consistent with a place of gathering.”

The spaces will be owned and managed by the entertainment group and include a statement of non-discriminatory behavior. The group and the city will also identify two annual periods of three days each, between May 1 and Sept. 15, where the gathering spaces can be used free of cost for festivals and events.

Japantown

The district development will coordinate with the city on efforts to facilitate “recognition, revitalization and/or redevelopment of the Japantown community,” which is part of the blocks specified by the agreement. That will require activating the north side of 100 South and creating a pedestrian connection. The city will use $5 million of the ticket fees generated toward this effort.

Downtown SLC revitalization talks fuel questions over Japantown future

Public Safety

The group will also provide a space in the district for the Salt Lake City Police Department and security for the processing and holding of people arrested.

Public art

The city will spend an additional minimum of $5 million from the public benefits account for public art in the district. It will be provided by the city’s arts council and Smith Entertainment Group. It will also include “a process for notifying and engaging with local artists” to compete for the chance to create public art.

What about Abravanel Hall, Salt Palace?

Salt Lake County owns Abravanel Hall, home of the Utah Symphony and the Salt Palace Convention Center. The contract between SEG and Salt Lake City requires that SEG “negotiate and endeavor to execute a lease” with the county for property necessary for the development before July 1, 2025.

That is a condition for the project to continue.

Salt Lake County Mayor Jenny Wilson previously said she is working to keep the music hall in its present form.

‘It needs to stand’: Abravanel Hall is full of major milestones for one woman

What’s next?

The participation agreement will be discussed and a vote to approve it is anticipated in the July 9 Salt Lake City Council meeting. After that, a legislative committee will need to approve its terms. If approved, a vote on the sales tax increase is anticipated for August.

The document:

Salt Lake City Council transmittal regarding major terms in SLC revitalization agreement by LarryDCurtis on Scribd