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Utah drops statewide hotel tax from public funding plan for MLB stadium


Utah drops statewide hotel tax from public funding plan for MLB stadium

Feb 27, 2024 | 10:35 pm ET
By Alixel Cabrera
Utah drops statewide hotel tax from public funding plan for MLB stadium
View from Archuleta Bridge looking north in the Power District, a nearly 100-acre site adjacent to the Utah State Fairpark and the Jordan River. The planned, multi-function mixed-use development will feature abundant green space and trails, a beautified Jordan River walk, innovative residential options, majestic views, a focus on local dining and retail, a potential Major League ballpark, and will be walkable, bikeable, and transit connected. (Courtesy of Larry H. Miller Company)

Utah’s funding of a Major League Baseball stadium on the west side of Salt Lake City is quickly moving through the Legislature in the last week of the general session. But, amid criticism, the bill that would enable the state to pay for the arena has gone through substantial change.

The stadium would no longer be funded by an increase in hotel tax statewide, but by the state’s portion of the sales tax within the district where it would be located, Ogden Republican Rep. Ryan Wilcox said to the House on Tuesday. 

Wilcox is sponsoring HB562, titled Utah Fairpark Area Investment and Restoration District, which would create a district in the Fairpark neighborhood with a governing board providing guidance to collect taxes within the district to pay for up to $900 million of a stadium in the Power District.

The bill passed the House on Tuesday morning and is expected to be considered by the Senate sometime in the remaining three days of the session.

“What this does is it allows us to capitalize on the growth that will take place as a result of the investments from the qualified applicant,” Wilcox said in a Senate committee hearing Tuesday afternoon, referring to the Larry H. Miller Company, which is paying for half of the stadium and improvements in its surroundings.

An MLB franchise hasn’t agreed to bring a team to the state. If there’s not a deal by June 2032, the tax plan to pay for half of the stadium won’t kick in.

Wilcox said this plan is larger than the arena. Even if the state doesn’t attract a baseball team, the bill would be worth it, he said, as it involves improvements for the Jordan River, and would provide public safety services in the Fairpark area.

Before the changes went public, the bill faced scrutiny from groups like the Utah branch of the conservative organization Americans for Prosperity, which criticized the public funding of stadiums — including a similar proposal to fund about $1 billion for a National Hockey League arena and downtown improvements — while the cost of living in Utah increases.

“My tax money shouldn’t be used to subsidize the expenses of billionaire team owners. Not only is that inherently unfair to taxpayers — why should the residents in San Juan or Duschene or other rural counties be on the hook so families along the Wasatch Front can go to MLB games?” read a letter penned by the organization that Utahns could sign and forward to legislators.

Sen. Lincoln Fillmore, R-South Jordan, the bill sponsor in the Senate, said that statement was a misrepresentation of what the Legislature is proposing.

“They’re saying that taxpayer money is going to some private companies to do this. But the inverse is what is actually true. What the state is doing is collecting a $900 million direct donation in order to build a stadium that the state will own, and then lease back to the private organization,” he said. “That is the very opposite of taxpayer subsidy.”

Especially, Senate leaders said, because the Larry H. Miller Company has 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. 

The funding plan still includes a tax increase for rental cars. It also calls to direct to the Fairpark District enhanced property taxes generated within the district’s boundaries from 2025. Salt Lake City would receive 25% of the enhanced property tax revenue generated by property tax imposed by the city.

The bill also requires the potential MLB team the stadium would host to include “Utah” in its name.

Another change in the update specifies that the board should be composed of one member of the Fairpark Authority board, one representative from the Westside Coalition, in addition to one member appointed by the Senate president, another from the speaker of the House and someone selected by Salt Lake City.

The legislation also removes a section that would fund a restricted at-risk student account with funds collected by income taxes from baseball players and other legislative appropriations. 

House Minority Assistant Whip Rep. Sandra Hollins, D-Salt Lake City, who represents areas of Salt Lake City’s west side and is co-sponsoring the bill, praised the inclusion of a voting member of the west side community in the board and said this is something leaders in neighborhoods support.

“I’ve seen a lot of changes in this community. Some of them we agreed with, some of them we didn’t,” she said. “One of the things we have never seen was major economic development like this on the west side, it is something that we have wanted, it is something that we have supported.”

Some other lawmakers, such as Rep. Nelson Abbott, R-Orem, remained skeptical about increasing 1.5% in car rental taxes.

“I recognize a lot of those taxes incur in the Salt Lake airport, which is close in proximity to where this ballpark will likely be built. But the reality of it is people rent cars all over the state.” That includes, he said, people in the south of the state who may rent a car while their own car is being repaired and who may not be able to benefit from the ballpark. 

Abbott added that the $150,000 a month rental of the stadium is “far below market rate.”

During a Senate Economic Development and Workforce Services Committee meeting, different interested parties such as the director of Utah Tourism Industry Association and members of the Westside Coalition spoke in support of the bill’s new provisions.

“We think that having community input is absolutely crucial,” Nigel Swaby, former chair of the Fairpark Community Council said. “There are issues that continue to exist in the area, and concerns that I hear from the community, particularly about crime issues. And that’s something that needs to be dealt with as quickly as possible.” 

Meanwhile, the Utah League of Cities and Towns said it’s still reviewing the changes.

“As a league, we’re always concerned whenever there’s legislation that impacts our traditional land use authority or traditional tax authority within our cities,”said Cameron Diehl, director of the league. “At this point, we don’t have a position yet on the new substitute. Our leadership is standing in close communication with the stakeholders, particularly Salt Lake City, (which) is working through these potential changes.”