Utah may pay $900 million to fund potential MLB stadium, increase hotel tax

The Power District, a nearly 100-acre site adjacent to the Utah State Fairpark and the Jordan River, features transportation access between the Salt Lake City International Airport and downtown. The project will serve as an economic and cultural catalyst for the state and the westside community, according to supporters of the proposed project. (Courtesy of the Larry H. Miller Company)

Plans to build a Major League Baseball stadium and an entertainment district may materialize on the west side of Salt Lake City with the help of taxpayer dollars.

House Bill 562 Utah Fairpark Area Investment and Restoration District, sponsored by Ogden Republican Rep. Ryan Wilcox, creates a political subdivision funded by a 1.5% increase in Transient Room Tax that would apply to hotel room stays and car rentals to help pay for the stadium.

Bringing an MLB team to the Beehive State is a feat that could cost over $4 billion. Just the franchise fee is about $2 billion, Wilcox said. Building the stadium is another $1.8 billion. The state would pay half of the stadium’s construction or up to $900 million, the legislation states.

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In exchange, Wilcox said, the state will own the stadium and the land underneath it. He called Larry H. Miller Company’s $1 billion investment an equity gain for Utah.

“It will be a state asset that we will pay less than half of the cost to build, that will immediately be turned over to us,” Wilcox said. “If for whatever reason we get the franchise, build the stadium and (the LHM Company) leaves, even if they leave that site, they immediately have to pay us back for everything. And we retain the asset.”

The bill also sets a deadline to get an MLB franchise deal. If it doesn’t happen before 2034, the deal is off. Though there are only eight working days left in the session, Senate President Stuart Adams, R-Layton, said there’s still time for the bill to reach the finish line.

“It’s an exciting day. The opportunity has been given to us, I think by people who want to do good in our community,” Adams said. “Yes, it will require some stretching, and it will require some increase in revenue from those that visit Utah. But what more appropriate slot to get the help from those that will come?”

Utah legislators say new district for MLB stadium would bring improvements to west-side neighborhood

The district would accelerate enhancements in the west-side neighborhood, Wilcox said.

“In other words, instead of a direct investment into the Fairpark itself, this allows us to leverage this opportunity to create and protect the area that we wanted to see there forever,” he said.

That includes cleaning up and maintaining the Jordan River, an asset that’s part of the Larry H. Miller Company’s plans for what it calls the Power District — the area that would surround the stadium. The company recently announced that it would invest $3.5 billion in the area.

“None of that, however, kicks in without a franchise agreement,” he said. “It doesn’t exist until we have the deal.”

The Fairpark District would lease the stadium to a major league sports team for $150,000 per month for 360 months, the bill reads.

Meanwhile, 0.10% of the tax increase would go into effect immediately to fund emergency medical services and search and rescue teams throughout the state, to assist rural communities.

Gov. Spencer Cox has said in the past that he’s “very uncomfortable with the state writing out a check to billionaires.” However, he said in his February PBS news conference that he would support a tax increment finance since he believes it would benefit communities by attracting businesses.

“We have some of the lowest taxes in the United States on hotels. Most states have higher taxes there,” Cox said. “So the argument is that there’s a little bit of room. Most of those taxes are actually paid by people outside the state of Utah.”

The bill also creates a Utah Fairpark Area Investment and Restoration District, a political subdivision governed by a board with members appointed by the governor, the Utah House and Senate, and the Salt Lake City Council.

The team that worked on this legislation has been in touch with Salt Lake City for over a year, Wilcox said. It has also worked with the Utah State Fairpark Corporation board, which also has a long-term master plan for the area. According to Wilcox, the bill would help accelerate those plans, as well.

“With the stadium, potentially there into the future, we’ll be able to leverage those existing assets, including the new rodeo arena, including the buildings and the other things that we’ve talked about with the Fairpark board,” he said. “So that agricultural asset that highlights rural Utah will stay long into the future and be able to be leveraged for further events.”

Though the city is excited and supportive of the possibility of bringing Major League Baseball to the city, there are some reservations, Andrew Wittenberg, a spokesperson for the city said in a statement.

“While we are excited about and supportive of the possibility of bringing Major League Baseball to Salt Lake City, this bill creates immediate concerns about the apparent diversion of tax revenue and land use away from city services, regardless of whether we ever see a MLB team in Utah,” he wrote.

Utah News Dispatch, like the Idaho Capital Sun, is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Utah News Dispatch maintains editorial independence. Contact Editor McKenzie Romero for questions: info@utahnewsdispatch.com. Follow Utah News Dispatch on Facebook and Twitter.

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