Downtown SLC stakeholders share their hopes and fears for a sports and entertainment district. 

• The Salt Palace and Delta Center could see significant change under a subsidized redevelopment proposal being negotiated between Salt Lake City, Salt Lake County and the Smith Entertainment Group (SEG).

"Salt Lake City is our urban core—it's our capital city and it belongs to all of Utah," Utah Senator Daniel McCay, R-Riverton, said on the 42nd day of the 2024 Utah legislative session. "History teaches us that when we fail to invest in our urban centers, the regional economy suffers."

McCay's comments were in favor of SB272, which he had brought to the Senate floor for debate. The bill is titled Capital City Revitalization Zone but is better known by what it appears likely to create—a new sports and entertainment district in west downtown, bookended by the Delta Center and a revamped Salt Palace Convention Center.

And since the legislative session ended, Salt Lake City has worked with the Smith Entertainment Group (SEG)—a Utah-based investment group that owns the Utah Jazz and a newly acquired NHL franchise—to realize this new district. 

The proposal has proven divisive, with some downtown stakeholders optimistic about the effect such a project could have on city vibrancy and tourism while others object to the public subsidies that would fund its construction and worry about the short-term impact of construction on small businesses.

"What has been proposed by elected leaders and initiated with Smith Entertainment Group is very specific to the entertainment district that they have proposed for sports, arts and culture," said Dee Brewer, executive director of the Downtown Alliance.

SEG pitched the construction of a new sports, entertainment, culture and convention district to the Salt Lake City Council on April 4 and, over the course of several months, the city and SEG have been negotiating a participation agreement that would allow SEG to redevelop three downtown blocks between 400 West and West Temple.

The City Council unanimously endorsed the agreement during their meeting on July 9, but additional legal and political hurdles remain before the project can formally advance.

Japantown and Taxes
"[SB272 is] a law passed this year by our state Legislature as a tool for the city to bring some funding to create an entertainment district in downtown, with the hope of keeping the Jazz and the hockey team in downtown Salt Lake City," City Councilmember Alejandro Puy explained. "But ultimately, it also allows the city to negotiate the terms of this agreement."

According to the law, Salt Lake City has until Sept. 1 to draft an agreement with SEG and send it to a state Revitalization Zone Committee for approval.

The proposed revitalization district centers around the Delta Center, but also includes redeveloping two blocks east of it. These two blocks house the Salt Palace Convention Center, the Utah Museum of Contemporary Art and Abravanel Hall.

To fund this redevelopment, SB272 permits the city to adopt a 0.5% sales tax increase, which is anticipated to generate $1.2 billion over 30 years, the maximum amount of time this tax can be active. The tax increase will not apply to motor vehicle sales, homes and other items.

"It is key to highlight this—that groceries are not included in the sales tax," Puy said.

The participation agreement also includes several provisions to which SEG must adhere. This involves imposing a ticket fee for all events at the Delta Center, which will take effect July 1, 2025.

Revenue from this fee will be used to develop affordable housing and "other public benefit initiatives as determined by the City."

Other public benefits outlined in the agreement include workforce development, which encompasses the establishment of internship and apprenticeship programs. SEG must also include free gathering spaces in their design and invest in public art for the district.

Of particular note in the agreement are the public benefits outlined for "the recognition, revitalization, and/or redevelopment of the Japantown community."

"[Japantown] was a thriving community with businesses and restaurants, retail, hotels," reported former state senator Jani Iwamoto, a member of the Japanese Community Preservation Committee. "Then in the late 60s, with the erection of the Salt Palace, we saw the community destroyed."

More than 90 Japanese-owned and -operated businesses were seized by eminent domain, Iwamoto explained, which allows a government to seize private property for public use. Governments must provide private property owners with compensation in order to enact this domain.

Japantown used to span several blocks. But in the aftermath of the Salt Palace's construction, it shrunk to just one block of 100 South between 300 and 200 West. The Salt Lake Buddhist Temple, the Japanese Church of Christ and a small Japanese garden are all that remain of the once expansive community.

"I think we're cautiously optimistic that this revitalization will bring additional revenue, additional interest and support into the area to keep Japantown and revitalize Japantown as much as everything else," said Rolen Yoshinaga, a board member with the Salt Lake Buddhist Temple.

The participation agreement outlines several commitments SEG must make to Japantown. This includes incorporating Japanese architecture into construction, developing historical markers and adding more street-facing, activated spaces.

It also requires minimizing the amount of loading docks that would be located on the street, by which both of the churches are currently surrounded. At least $5 million is set to be spent specifically on Japantown.

However, both Iwamoto and Yoshinaga emphasized the need to keep the churches open through the redevelopment.

"The danger, the dark side of it, is that the two main property owners here that remain are the two churches and we cannot allow this revitalization to interfere with church operations," Yoshinaga said. "We can't have a street that doesn't support that. That's what we're very nervous about."

Iwamoto agreed. "If you can't maintain those operations, what do you do?" she asked. "You know, do you close the doors and move to the city and just forget this whole thing? I mean, that's what you're faced with, is if we go, the street has nothing, right? There's nothing. There's nothing left here to hold it."

A Dynamic Downtown
The project will begin with a renovation of the Delta Center. Mike Maughan, a representative for SEG, shared in a City Council work session on June 11 that SEG hopes to begin these renovations in the spring of 2025.

The participation agreement outlines that the entire revitalization district must be operational within 10 years.

In that same meeting, Maughan presented conceptual plans for what this revitalization zone could look like. They included demolishing the west wing of the Salt Palace and replacing it with an outdoor plaza. The plaza would have space for a hotel, a residential tower and several entertainment or business spaces.

"The goal overall is to create a very family-friendly gathering space, many family-friendly gathering spaces downtown where people can shop, eat, gather and come together," Maughan shared. "That's why there are plazas so central to each of the blocks."

The plans also include rerouting 300 West underground, allowing for one plaza to join the Delta Center to the adjacent block without the disruption of vehicle traffic.

To facilitate this new district, the City Council is working on enacting zoning changes to the area. The changes they're considering would permit any building to reach 75 feet in height, and could be allowed unlimited height above that if a building's design is reviewed and approved. The Council will hold a public hearing on these changes during their meeting on Aug. 13.

A report from the D.A. Davidson financial planning group on the economic impacts of this district estimated that operations from the Utah Jazz, NHL team and arena would generate nearly $1 billion in annual revenue for the city.

It also estimated that construction would generate 1,500 temporary jobs and arena operations would create another 3,500.

Puy noted that events ocurring in and around the Delta Center have an outsize impact on city revenue.

"Our Downtown Alliance and our sales taxes report that the biggest days of sales taxes and attendance in our downtown are very much attached to activity in the Delta Center," Puy explained. "Losing the economic piece of that is very damaging for the city."

According to the Downtown Alliance's 2023 Economic Benchmark report, Salt Lake City's urban core is home to 140 retailers, 43 bars and 121 local restaurants. Brewer said they stand to benefit from increased economic activity in the heart of the city.

"Done right, [this district] will ripple out through the rest of downtown and through the rest of the community," Brewer said.

According to the Downtown Alliance, three million tickets were sold to downtown arts and entertainment events in 2022. Sixteen million visits were paid to downtown Salt Lake that same year.

Salt Lake City's economy made an impressive comeback in the aftermath of COVID-19. A 2022 economic report prepared by the state found that Salt Lake City added more than 72,000 jobs to the market, recovering the nearly 30,000 lost during the pandemic and then some. Salt Lake City also continued to see growth in population after the pandemic.

"Revitalizing downtown is a perpetual function, and that's what we do all the time," Brewer observed. "The very nature of downtowns is that they are dynamic. You see restaurants emerge and become a hot thing, and some of them go on to thrive for decades, and some of them flame out."

Brewer emphasized downtown's robust restaurant and bar scene. He attributed its success to a wide range of entertainment and events that are hosted downtown, from ballets to arts to conventions.

Some downtown businesses, like Uniquely Utah Souvenir Co, get almost all of their business from tourists.

"I get my business from the conventions, people traveling to Utah, just travelers," Martin Norman, owner of Uniquely Utah, said. "Those two are my main primary sources of people that come into the shop."

Other business owners say that they are primarily supported by locals. Jason LeCates, managing partner with The Bourbon Group, estimated that 50% to 60% of his customers are Salt Lakers.

"I'm all for it," LeCates said of revitalization. "We need to focus on downtown."

But LeCates acknowledged the risks that large-scale construction poses to existing retailers. He opened Whiskey Street (323 S. Main St) 11 years ago. Back then, he recalled, Main Street was "boarded up and very depressed."

"If you flashback 25 years ago, Main Street was pretty hot, pretty happening, and then in preparation for the Olympics, they put the train down Main Street," LeCates explained. "It ended up being a huge project that shut the street down from 4th South all the way up to South Temple. Yeah, put everybody out of business."

LeCates attributes Main Street's recovery to its smaller size and business owners who were willing to invest in Main Street.

"I think people love Main Street," he said. "It's the only quaint street in Salt Lake City."

Blank Walls and Empty Spaces
"Salt Lake City blocks are so big, and the streets are so wide, that they are not necessarily inviting to the pedestrian," said Ana Valdemoros, a former city councilwoman and owner of Argentina's Best Empanadas (357 S. 200 East).

Both Valdemoros and Puy discussed the benefits of a more walkable downtown

"We have grown into being a city that is very heavily reliant on cars," Puy said. "You basically want to create a whole area where people are encouraged to leave the car because they can do their shopping, they can grab their coffee, they can just go window shop, and at the same time, have their kids spend some of their energy so they can go home and kill all those birds with one stone."

Puy discussed the varying levels of economic activation that exist downtown.

"It wouldn't take a rocket scientist to realize that if you walk a block east of the Delta Center, you've found yourself in a place that is full of walls, full of empty space, sometimes scary docking doors and nothing to do," Puy observed.

By investing in walkable spaces, these pockets of empty, lifeless streets downtown might no longer exist because they would be easily accessible and connected to each other and the remaining parts of downtown.

Rheda Fouad, co-owner of The Ruin (159 S. Main St), pointed to issues he's had with office space he bought on 100 South.

"It used to be, in my mind it was great," Fouad recalled. "You know, the neighborhood there was safe, people maintained their properties. But something happened."

After the pandemic, Fouad noticed an increase in crime in the area. He's had to replace several windows and he says drug use seems to have increased in the area.

"I can't really keep it maintained. I mean, we've been redoing plantings. We've had to fix our drip lines multiple times—they just get ripped up," Fouad said. "We don't know why or how people are wanting to do that. They don't even want the area nice. So it's been a frustrating run a little bit over there, but that's kind of how we're feeling about most of the stuff that's happening in the city."

Fouad and his wife, Amy Leininger, first opened The Ruin in Sugar House. Two and a half years ago, they decided to move their business downtown to Main Street.

"We just felt there's more energy downtown, but that has not panned out yet," Fouad admitted. "We're kind of on our own island up there. There's not a consolidation of food and beverage, right? So, like you go down Main Street between Third and Fourth South, there's a lot of energy there, but I know even some of their numbers are off."

Fouad attributes some of the struggle he's faced as a business owner to inflation eating into people's disposable income. He also pointed to the population of unsheltered people living in downtown Salt Lake.

"The unsheltered element, I think, is keeping a lot of people away from downtown, just by stigma," Fouad said. "We've dismantled a lot of our unsheltered population. It's not because of housing costs, a lot of it's just mental health, and we're not investing in that aspect of it."

Construction is also a challenge several downtown businesses face.

"It kills you," LeCates related. "Go look at Bar X and Beer Bar, they've had construction right in front of their buildings. It's awful, you know, because people can't find a parking spot. Boom. They'll find somewhere you can find a parking spot."

Some businesses are also still trying to recoup from the lost business of decreased office workers downtown. "I've talked to so many people about the unpredictability of lunches. You know, there's still only [60%] of office employees back, and it's just kind of a different, changing market," Fouad said. "Some of these things the city, you know, the city can't force workers back into office buildings."

Previous city investments downtown, like the Gallivan Center or Eccles Broadway Theater, have helped surrounding local businesses, in LeCates' experience.

"Hands down the biggest positive impact has been the theater," LeCates asserted. "Like we have Hamilton there all next month, which we only get, like, one of those a year. But we'll have 30 days where all of downtown is going to be kicking ass."

But for Fouad, whose business is only about two blocks north of Whiskey Street, and almost directly next to the Eccles Theater, these investments haven't helped.

"So many people who come into the city to go see a show, they park on Regent Street," Fouad said. "They go through the back door. They don't even really touch Main Street."

Fouad is also a part owner of the Central 9th Market (161 W. 900 South), a location at which he has seen much more success.

"It's mixing different demographics, and it has an early dinner side, and it's got a lighter night crowd," he explained. "All the businesses down there do a really good job of building our community."

LeCates suggested the city should next focus on the Granary District and on West Temple, where a street improvement project is currently underway.

He said it's not enough to decide a new development—like the sports, entertainment, culture and convention district—is going to be the next cool spot without any real backing. That's something that happens on its own.

"There's ups and downs in this circle of life," LeCates observed. "As a business owner, you've got to realize that the city might say they care—they don't care. If you go out of business, someone else can take a shot."