On Friday the City released complete terms for SEG’s sports and entertainment district. Tuesday the City Council votes. Here’s our report card.

After dropping its 136-page “participation agreement” with Smith Entertainment Group (SEG) on a Friday afternoon of a summer holiday weekend, City Hall is poised to approve this Tuesday the terms of a $900 million sales tax transfer to SEG after receiving the enabling legislation from Capitol Hill this past March.

It’s been a frenetic rush to meet the deadlines set by SB 272. Staff on both ends of the third floor of City Hall–the City Council and Mayor’s offices–seem to have the meal prepared and the table fully set for a council vote at Tuesday’s meeting on July 9.

An approval vote would send the agreement to a five-member ad hoc state committee for consideration, after which a final council vote will be taken. 

Members of the public who wish to speak to the City Council on the matter have already had their opportunities at past council meetings. While Tuesday’s agenda provides public hearings on other issues, no comments on the sports and entertainment district will be welcome until after the vote Tuesday at the Council’s Formal Meeting.

Let’s take a look at some of the most salient points in the agreement –and consider whether they’re wins or losses for the city from a public interest perspective.

Japantown

The Japanese Church of Christ (UCC), at 268 West 100 South. Photo Luke Garrott | Building Salt Lake

Will the Japanese-American community in Salt Lake City see “true, genuine reparations” in the words of Council Member Darin Mano, who has led the council in advocating to “undo the racism-fueled urban renewal project that led to the eminent domain and seizure of Salt Lake City’s historic Japantown to make way for the Salt Palace in the 1960s”?

The participation agreement requires SEG to “use commercially reasonable efforts to coordinate the District Redevelopment Project with the City’s efforts to facilitate the recognition, revitalization, and/or redevelopment of the Japantown community located at 100 South and 300 West.”

The Salt Lake Buddhist Temple at 211 West 100 South. Photo by Luke Garrott | Building Salt Lake

“Recognition, revitalization, and/or redevelopment” leaves a lot to be determined. The elements called out as SEG responsibilities consist of design guidelines in relation to the two existing cultural buildings in Japantown, and a requirement to meet with community groups.

Design guidelines:

  • ”Use commercially reasonable efforts to incorporate Japanese architectural or landscaping elements in the 100 South ground level facades facing Japantown when consistent with SEG’s tenant mix in such buildings.”
  • Activate 100 South on the north side while minimizing truck loading
  • Create a pedestrian connection from the heart of the District to Japantown 
  • Establish markers recognizing Japantown’s history
  • Incorporate important cultural sites into the district, by a) using “appropriate landscaping and fences to demark and transition between private cultural spaces and public spaces”; b) establishing “appropriate setbacks and lower buildings to reduce the impact building heights have on key cultural sites”; and c) locating “illuminated signs so they are screened from important religious buildings and residential uses.”

In addition, SEG is required to hold regular meetings with the Japanese-American community for three years after the agreement becomes effective.

SEG is not committed to spend any funds on capital projects besides the historical markers. The city, on the other hand, is required to spend at least $5 million on Japantown capital improvements.

District 5’s Mano, a Japanese-American with family history in the diaspora and dispossession of Japanese Americans during and after WWII, told his colleagues at last week’s council meeting that “the community didn’t get all they wanted in these negotiations, and I want to hear more about that.”

Win or loss?

A draw. Given what Japantown’s been through, the >$5 million committed by the city to carve out festival and ceremonial space for the physically-decimated community should be seen as a win. 

But 100 south is likely to be again the backside of a new development. The Salt Palace and The West Quarter mostly “turn their back” to the street, and it’s hard to see how SEG’s plans for buildings facing the middle of Block 78, on the north side of 100 South, can avoid doing the same.

It’s not hard to imagine the Buddhist Temple and the Japanese Church of Christ becoming further marginalized as SEG redevelops space to the west, north and east.

Plaza and public space

Designers for SEG have provided conceptual renderings that show gathering space in the shape of a pedestrian mall on block 78 to the east of the Delta Center. This space would be privately designed, constructed, owned, and operated by SEG.

The drawings dramatically expand the area for outdoor gathering over what currently exists at the Delta Center. To do so, 300 West is proposed to be undergrounded from 200 South to North Temple.

The traffic engineering firm hired by SEG, Hales Engineering based in Lehi, produced a 69-page traffic study that also stated the intention “that South Temple between 300 West and 400 West be closed to vehicular traffic to facilitate access to the UTA TRAX Arena station.” This may occur only during events, however.

The plan does not anticipate the city to vacate any rights-of-way.

Win or loss?

A draw. Putting a state highway underground should turn out to be a huge win for walkability, a fundamental city planning goal. The cost of a tunnel will likely be borne by UDOT and/or SEG, but the city is heavily invested in how the design is done. 

Will it increase public space, or just private? Will it increase walkability for people outside of cars? Very much to be determined.

Human capital investment

The concept of investing in “human capital”–education and training opportunities for youth–is reflected clearly in the city’s priorities for the agreement.

City negotiators are likely satisfied with their efforts in what they call “community support and workforce development.”  SEG has committed to significant monetary investment in community initiatives, many of which are designed to benefit income-qualifying individuals. 

The commitments from SEG seem substantial, including annual financial commitments for 15 paid interships for college students and $2 million for youth basketball and hockey sports programming. In addition, a youth “shadowing” program, four community outreach events annually, and a program for free and subsidized tickets for income qualifying individuals. 

Win or loss?

A win, no question.

No TIF reimbursement to SEG

While including in SB 272 the possibility that a tax increment financing (TIF) zone be created for the District, none is included in the agreement.

A TIF district would have enabled SEG to collect the increase in property tax collected by the city as a result of the new development. A reimbursement for 10 or more years of tax increment is not an uncommon deal between the city and developers. 

Instead, the city apparently successfully pushed back on SEG’s desire, and will collect, along with other recipients of property tax like Salt Lake County, the full amount of increased tax due to rising assessed values.

Win or loss?

A win, little doubt.

Big signage, coming atcha

SEG requested that the city’s broadest allowance in signage be extended to the two blocks east of the arena, and are set up to receive it. There currently exists a signage overlay for the Delta Center that allows very large flat signs, roof signs, digital signs, special event signs, and window signs.

As stated above, design guidelines for Japantown include “locating illuminated signs so they are screened from important religious buildings and residential uses.”

The zoning changes for the District recommended by the Planning Division do not include waving the city’s ban on off-site advertising for signs in the Delta Center overlay. Thus, SEG’s liberal sign allowance won’t allow de facto billboards in the city’s center.

Win or loss?

Hard to call a win. The new signs are likely to be very large, with some very bright and very active. The Gateway’s vertical digital sign at the mall’s north end, as well as Wasatch Properties 300 South parking parking garage between Main and State, are examples of what will be allowed on SEG’s three blocks. Also expect huge banners, logos and lettering on the sides and top of buildings. 

If they don’t detract from the experience of being in a public space together with others, super big signs can add to the locations’s ambience. If overdone, visitors may become mere screenwatchers, zombie consumers shuffling toward their next meal.

Would any urban designer put giant digital signs at the top of their list of essential public space elements?

Height allowances and other zoning changes

The Planning Division’s latest recommendations for changes to the D-4 zone embrace some of SEG’s requests, and reject others. The most salient features:

  • Height limit: 600 feet, and design review required over 75 feet. In D-1, heights are unlimited with design review.
  • Heliports as conditional use, and stadiums/arenas as permitted.
  • Setback maximums removed for the creation of pedestrian zones.
  • Allow larger signs than are currently allowed in the D-4 zone throughout the three-block district, like those currently allowed at the Delta Center sign overlay, at the Leonardo, and at LA LIVE.
  • Those signs, which can be digital, can’t advertise ”off-site” products/events. In other words, they can’t become what the city calls billboards.

Win or loss?

Win. The city has been able to re-assert some of its Downtown zone priorities, while relenting on several less important ones. With the exception of the sign allowances, the city should consider the zoning agreement a win.

New income to city coffers

All of the $.005 sales tax over 30 years will go to SEG, the total amount not to exceed $900 million.

The city, for its part, negotiated a ticket tax for every ticketed event at the Delta Center over that period, to be deposited into the city’s new “Public Benefit Account.”

While the Delta Center claims to host “over 320 days of events” annually, the number of events ticketed by SEG may only include home games for the NBA and NHL teams (totaling 82), plus concerts and other events like fights and motorsports. By our best guess, that’s about 100 events per year.

In all, BSL estimates that non-NBA/NHL events may bring the total number of events subject to the ticket tax to 100. The fee varies from $1-3, depending on the value of the ticket.

The Mayor’s office and the City Council haven’t responded with answers to how much they expect the city to receive annually from the ticket tax. So we’re left doing our own calculations:

100 events x 10,000 average attendance x $2 average fee per ticket = $2,000,000 new revenue per year.

Is that a lot of money? It depends what one’s expectations for the funds are. The city has already committed $10 million of the Public Benefit account to Japantown infrastructure and public art on SEG property. It also mentions affordable and family-size housing as likely recipients of the new income.

Win or loss?

Draw. New income is always welcome to city accounts. $2 million a year is more than a drip, but given that five years ($10 million) of it is already committed, its impact is already limited. Why isn’t SEG money going toward Japantown infrastructure and public art on their property?

Abravanel Hall

Since the Salt Palace building and land is owned and operated by Salt Lake County, the fate of the historic and iconic concert hall is in the hands of Mayor Jenny Wilson.

The Salt Lake City Planning Commision, in its recommendation to the City Council on SEG’s zoning change requests, endorsed renovating the hall in situ. 

The city’s agreement with SEG is mute on the issue.

The agreement sets a deadline of July 1, 2025 for SEG to reach a lease agreement with Salt Lake County for the two blocks east of the Delta Center currently occupied by part of the Salt Palace Convention Center.

Win or loss?

Loss. If the County signs off on the removal and relocation of Abravanel Hall, it will be a huge loss in value for the city historically, culturally, architecturally, and spiritually.

Construction timeline

SEG is not bound by any hard deadline to complete any stage of the District. The agreement states “SEG intends to commence renovation of the Delta Center in 2025 and anticipates completing the renovation in three phases over the subsequent three (3) years.”

The two blocks to the east? “The balance of the District Redevelopment Project is intended as a mixed-use development that may be comprised of such things as lodging, multi-family housing and various commercial, retail, office, cultural and convention uses and related improvements and facilities.”

If “commercially reasonable,” the three-block district will be completed by 2034. However, no penalties exist in the agreement if that goal is not met.

Win or loss?

Loss. The city has no mechanism to enforce any part of SEG’s plans beyond the specifics listed for the Delta Center’s renovation. All details for the two blocks to the east are up to the discretion of SEG, as long as they follow the new zoning rules for the D-4 zone teed up for approval next month.

The $900 million of new sales tax–$575 million for the Delta Center and $375 million for the eastern two blocks of the District–will flow to SEG regardless of what they end up building. The specifics in the plan are few, and discretion given to the developer is wide.

Editor’s note: This post has been updated to clarify that the recommendation to close S. Temple between 300 and 400 West to vehicular traffic is likely only during events.

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Posted by Luke Garrott

Luke Garrott, PhD, has published in The Salt Lake Tribune and the Deseret News, and written features for the Salt Lake City Weekly City Guide and The West View. A former two-term councilman in Salt Lake City's District 4, he lives in Downtown Salt Lake City and grew up in the Chicago area.