Jazz propose $125m arena renovation, get blasted by Koch group over $23m in tax breaks

Utah Jazz owners the Larry H. Miller Group are planning a $125 million “major renovation” of their arena, and they’re actually going to pay for it with their own money! Except the part that won’t be paid for with their own money:

The price tag for the renovation has been set at $125 million, with the vast majority ($102.3 million or 82 percent) being funded by Larry H. Miller Sports & Entertainment.

The remaining $22.7 million (18 percent) will come from public funding if the organization’s proposal to Salt Lake City’s Redevelopment Agency next Tuesday is approved in that group’s monthly meeting…

If given the thumbs-up, the public finding would be delivered via intermittent payments over the course of the next 25 years, perhaps sooner, through the city’s Tax Increment Reimbursement mechanism.

Yep, that’s a TIF, or at least a variant on one, since only 40% of the added tax revenue (some of which would come from property taxes on properties other than the arena) would get kicked back to the team. It’s not a huge subsidy, to be honest — though it would be nice to know if the city still has to pay the $22.7 million if property tax receipts do not, in fact, go up — but the Koch Brothers–funded Americans for Prosperity is still opposing it, asking, “Why are we giving multi-billion dollar corporations tax dollars to build or renovate arenas?” (The Kochs themselves have only gotten multi-hundred-million-dollar tax breaks.)

Holding the line on any tax breaks isn’t a terrible idea, especially since there’s no indication that the Jazz would skip out on the renovations or move or set off a thermonuclear device or anything if they were denied the TIF funding. The Salt Lake City Redevelopment Agency is set to hold a hearing on the proposal at 1 pm today; at least take solace in the fact that unless there are other hidden subsidies here we don’t know about — always possible! — at worst the Miller family is going to be paying for 80% of a fairly cheap renovation, which as these things go isn’t too bad at all.

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8 comments on “Jazz propose $125m arena renovation, get blasted by Koch group over $23m in tax breaks

  1. So here’s a legitimate “arena/stadium vs. alternative public benefit” situation:

    Is Salt Lake better to dedicate that $23M to help millionaire Larry Miller improve his palace or is that $23M better spent helping to fix the chronic homeless situation in and around Pioneer Park, a mere 2 blocks away that is negatively affecting businesses around the park?


    Article quote:

    “Pete Henderson, who owns and operates the Rio Grande Cafe, less than a block away from The Road Home shelter, said he is at his wits’ end.

    “It’s at least as bad as last year,” he said. “Probably worse.”

    This past year, the cafe served 35,000 fewer meals than it did in 2010, Henderson said.

    “I’m very discouraged. That’s the kindest word I can use,” he said. “I really think this is going south.”

    $23M spent on the arena will in no way will “spur development” or be a return on investment for Salt Lake that would then in turn help this situation. It will only benefit Miller, and anyone who can afford to go to games, not these small businesses.

  2. Larry Miller died in 2009, so he’s beyond benefiting. The rest of the question is a decent one, though.

    1. Exact same thing I was going to say, I had to wiki to see if one of his kids was named Larry so I didn’t look like a sphincter.

  3. Whatever it takes to liberate the Jazz name so that it can go back to the New Orleans basketball team so that they can rename the minor league baseball team the Pelicans, I’m all for.

    Wait, were we not talking about that? Shoot.

  4. “Why are we giving multi-billion dollar corporations tax dollars to build or renovate arenas?” Why, indeed?

  5. Hmmph.

    The devil is always in the details, but if this company is legitimately paying 80% of the cost of the upgrade (to it’s own ‘factory’, it must be said) I can accept it.

    They should pay the whole cost, of course, but it’s way less offensive than most of these deals.

    Still, if you are a business owner in the district to which the TIF/CRL applies, you may end up paying more so that some of your competitors (possibly – likely in the case of businesses targetted to sports fans etc) can pay less.

    1. I thought TIF’s generally redirected taxes that would otherwise go to the general fund to pay off construction bonds, rather than creating new or increased taxes. If that’s the case, there is no difference to businesses inside and outside the TIF zone, as it is only a matter of where their taxes go rather than how much they pay.

    2. True, but as noted on another thread Brian, the “increased development” within the district still needs it’s infrastructure to be serviced and maintained, and all the other things property taxes (and sometimes surtaxes) are supposed to cover.

      So whether your existing taxes (or, as in this case, increases in taxes in the defined zone) are redirected to fund that development or not, the things those funds should have paid for still have to be paid for.

      One of the analogies I used years ago was this: Imagine you do what people used to do in the 30’s and 40’s and label jars for “property tax”, “Gas bill”, “electric bill” etc. Then, each month you take a portion of your pay and put it into these jars to cover that month’s bill.

      If you take half the money from the jar marked “gas bill” to pay your electric bill or property taxes (which were higher than expected), you haven’t addressed the fundamental problem. You still have to pay your gas bill.

      Property and development taxes are not windfall profits for municipalities. They represent the marginal cost to run the government and public services that the community needs attributable to each property or development within that community.

      If a local government waives or redirects part of my taxes payable, they generally aren’t forgoing that revenue (unless they directly close a school or library because they can’t afford to fund it anymore). What they are doing is increasing the mill rate on all (or some, in certain cases) other properties to make up for that waiver/redirection.

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