Utah baits bids for MLB and NHL teams with bonds

Bonds

Professional sports-hungry Utah is hoping to entice baseball and hockey to come to Salt Lake City with bills state lawmakers passed last week that authorize bond issuance for stadiums.

House Bill 562 allows up to $900 million in financing to cover half the cost of a Major League Baseball stadium within a Fairpark Area Investment and Restoration District if a team franchise is secured by 2032.

Senate Bill 272 creates a Capital City Revitalization Zone in the downtown area and authorizes bond issuance for arena construction or remodeling to accommodate a National Hockey League team.

Rendering of a Major League Baseball stadium within the 100-acre Power District development on Salt Lake City’s west side.

Larry H. Miller Company

That measure gives Salt Lake City the option to add up to 0.5% to its 7.75% sales tax for no more than 30 years to fund an arena project and infrastructure within the zone and provides oversight through a Revitalization Zone Committee made up of four state lawmakers and an appointee by the governor.

The ballpark-related bill creates a five-member district board with the ability to issue bonds and enter into a 30-year, $150,000 per month lease agreement with a MLB team for a state-owned stadium. Revenue sources include a 1.5% increase in the state rental car tax and incremental increases in property and sales taxes generated in the district.

State officials said the legislation will give an economic boost to areas of Salt Lake City that need it, including funding improvements to the state fair venue and the adjacent Jordan River.

“This is bigger than an arena or a stadium,” Gov. Spencer Cox told reporters Friday. “Let’s assume that neither of (the teams) come – these projects both will be worth it.” 

The legislation supports efforts to entice more professional sports teams to the state, which is currently home to the National Basketball Association’s Utah Jazz and Major League Soccer’s Real Salt Lake. 

Jazz owner Ryan Smith has his eye on bringing a NHL team to Salt Lake City. 

Smith Entertainment Group announced in January that it asked the NHL to initiate an expansion process that would bring a team to Utah where it could play at the Jazz’s home — Delta Center — on an interim basis or in “a new, state-of-the-art hockey arena.”

Delta Center, which was acquired by Smith when he bought the Jazz in 2020, opened in 1991 and has a seating capacity of 18,206 for basketball games.

“This is bigger than an arena or a stadium,” Utah Gov. Spencer Cox told reporters Friday. “Let’s assume that neither of (the teams) come – these projects both will be worth it.”

Utah Governor’s Office

Larry H. Miller Company, the owner of triple-A baseball team Salt Lake Bees, and previous owner of the Jazz, aims to bring a major league team to a ballpark that would be part of a nearly 100-acre, $3.5 billion mixed-use Power District project the company is developing on the city’s west side. Community coalition Big League Utah is leading the charge to get a team. 

Several much larger cities are potential candidates for when MLB expands to 32 teams from the current 30, according to a recent ESPN report.

John C. Mozena, president of The Center for Economic Accountability, said research has found new stadiums, which tend to compete for existing entertainment spending, do not measurably improve state or local economies.

“The fundamental question for a bond buyer would become whether the bonding authority’s projections are counting on any such broad economic growth to be able to meet its debt service commitments,” he said in an email. “If so, that should reasonably raise some red flags among buyers — as it has at times in the past.”

Any market can afford professional sports if you pay enough, according to Geoffrey Propheter, an associate professor at the University of Colorado Denver’s School of Public Affairs. 

“The more important question is whether lawmakers are overpaying relative to the benefits sports provide residents,” he said in an email. “And the answer to that question is almost always, yes, lawmakers tend to over subsidize sports by a lot.”

Americans for Prosperity — Utah organized a campaign against the legislation.

“While every Utahn would be excited for new sports teams, the wealthy sports franchises who want new stadiums should foot the bill themselves,” said Kevin Greene, the group’s state director in a statement. “If a billion dollars of hardworking families’ money is the price to play ball, Utah shouldn’t play the game at all.”

The 2034 Winter Olympics were on some state lawmakers’ minds as they took up the bills. 

“The aim of this bill is to revitalize downtown,” State Rep. Jon Hawkins said, referring to the hockey-related measure. “With the Olympics coming in 10 years, we want our capital city to be vibrant, to be a great place for families to come and enjoy what we have to offer.” 

In November, the International Olympic Committee chose Salt Lake City as the preferred host for the 2034 Olympic and Paralympic Games. The official bid for the city, which hosted the 2002 Winter games, was submitted Thursday. 

“New stadiums would mean venues for the 2034 Olympics!!,”  Salt Lake 2034 posted on the X platform, formerly Twitter, last week.

A joint statement from Salt Lake City and County officials, as well as Smith, said they are “working hard together to keep the Utah Jazz in downtown Salt Lake City long term and attract the NHL to the core of the city.” 

“A lot of work needs to be done through investment to develop new infrastructure, enhance connectivity, attract impactful activations, and create a safe, welcoming environment for everyone in downtown,” the statement said. 

Recent proposals for major league sports stadiums in the Southwest had mixed results.

The NHL’s Arizona Coyotes were dealt a blow in the team’s temporary home in Tempe, where voters last May rejected a proposed $2.1 billion entertainment district that included a 16,000-seat hockey arena. The financing plan called for as much as $230 million of 30-year bonds to pay for a landfill cleanup.
The failure of that vote, and the NHL push by Salt Lake City, have spurred rounds of published speculation that the Coyotes could simply relocate north to Utah.

Oklahoma City voters in December approved a sales tax extension to fund an at least $900 million replacement arena for the NBA’s Thunder, which has been playing in the city-owned Paycom Center since 2008. The team committed only $50 million for the project.

While the city initially envisioned short-term financing for the project, it is currently looking at multiple approaches or combinations with an eye toward finalizing a plan next year, Oklahoma City Chief Financial Officer M. Brent Bryant said in February.

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