Legislature passes bill to pave way for Salt Lake City to fund $1B downtown revitalization plan
A plan to drastically alter downtown Salt Lake City took a major step toward becoming a reality on the final day of the legislative session.
SB26 cleared the Utah Senate and House of Representatives on Friday, paving the way for a 'convention center reinvestment zone' by the Salt Palace Convention Center. It would also help Salt Lake County and Salt Lake City pay for the convention center's redevelopment along other buildings east of the Delta Center, a large chunk of the proposed 'sports, entertainment, culture and convention center.'
Salt Lake County Mayor Jenny Wilson and Salt Lake City Mayor Erin Mendenhall said in statements to KSL.com they're elated it passed.
'Salt Lake County is pleased with the passage of SB26,' Wilson said on Monday.
SB26 is about a year in the making. Utah lawmakers approved another bill last year that opened the door for Salt Lake City and Smith Entertainment Group to partner on a 'revitalization zone' near the Delta Center as part of the company's plans to bring in an NHL team.
With a team in hand, Smith proposed a plan in April 2024 that included a land lease with Salt Lake County over two blocks east of the arena. Since then, plans have called for the Salt Palace to be cut in half, as a plaza would exist where 100 South is currently covered up by the convention center. The center would then be rebuilt more vertically, per the renderings made public since.
Getting there is expected to be costly, though. Wilson estimated last month that the cost of renovating the Salt Palace could exceed $1 billion, while the cost to preserve Abravanel Hall could be about $200 million. That's why the county lobbied the state for funding help during the legislative session.
While another bill, SB306, fell by the wayside this year, SB26 aims to do help with funding. It allows for the city and county to pool 'existing tax authorizations' to help repay any bonds that finance the reconstruction of the convention center, along with upgrades to other buildings like Abravanel Hall and Utah Museum of Contemporary Art, said Rep. Jim Dunnigan, R-Taylorsville, on Friday, as he discussed the final substitute that he authored.
These include property, sales, use and other tax increments, which allow for any increases to tax funds created by the enhancement of facilities within an established zone to be used to pay off any project bonds. The bill allows for 100% of local and county tax increments to go toward the project, as well as half of the state's sales tax increment over 30 years.
'This bill self-funds the project through existing taxes and creates an improvement district that will finance the project,' Dunnigan explained, adding that it wouldn't raise city, county or state taxes.
Salt Lake County, which manages the Salt Palace, will be tasked with overseeing all project construction and expenditures but will also work with the Utah Governor's Office of Economic Opportunity. Dunnigan said the state office would offer additional oversight by creating an 'established budget.'
All of the generated money can only go toward the Salt Palace and other public infrastructure within the zone, including a satellite police station, and not the Delta Center or other private properties. The bill also allows the city to maintain zoning control in the area. The convention center and other affected buildings are zoned D-4 by the city, which is a zone the city amended last year to fit revitalization plans.
The bill won over legislators on Friday.
'We do want to make sure that we do put our best foot forward, but we don't want to have a hefty bill for it,' said Rep. Jon Hawkins, R-Pleasant Grove, before voting for it. 'I think this is a great solution to a great idea.'
Barring a veto, some of the bill would go into effect on May 7, although it says the Governor's Office of Economic Opportunity 'shall propose' a zone of up to 50 acres by April 15. Some portions of the bill, largely tied to property tax, would begin on Jan. 1, 2026.
While Salt Lake City clashed often during the session with the Utah Legislature, Mendenhall said she's thrilled SB26 passed. Salt Lake City reached an agreement with Smith Entertainment Group in October, which included a 0.5% sales tax increase toward $900 million in bonds Smith was allowed to seek.
Those plans required help from the county that hinged on funding opportunities, which might now be settled.
'The renovation of the Salt Palace will unlock the potential of the downtown district,' Mendenhall said, adding that the bill should help ensure the Utah Jazz and Utah Hockey Club remain downtown as the 'anchor of our downtown sports, entertainment, culture and convention district.'
County and state leaders also see the bill as a major investment in the Salt Palace, which Dunnigan called Utah's 'top tourism asset.' Conventions are a major driver for the $4 billion in direct visitor spending that Salt Lake County generated in 2023, according to the University of Utah Kem C. Gardner Policy Institute.
He said the Salt Palace is active about 65% of the year, but some projections have it closer to 90% with the right changes. Wilson explained last month that adding a second ballroom could potentially double the revenue that the Salt Palace generates, something that could go toward the tax increment.
'The renovation of the Salt Palace is a top priority for Salt Lake County as it will increase our capacity to host more events and conventions, strengthen preparations for the 2034 Olympics, and enhance the downtown experience,' she said on Monday. '(It) generates significant tourism revenue, which is reinvested into local communities, parks, trails, recreation, arts and public spaces.'
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