Salt Lake City’s $22.7 million tax break for renovations to the Utah Jazz‘s privately owned arena is all over but the shouting, and there’s plenty of that:
- Deseret News sports columnist Brad Rock writes that “the tradition of coercing cities into building sports arenas at public expense, under threat of relocation, is tried and true,” but then adds that he’s fine with being threatened if the price is right: “If Utah loses the Jazz, for lack of an updated arena, Salt Lake will return to the college town it was when the team arrived.” Not that the Jazz have threatened to leave town, mind you, or that it would make any sense for them to do so when they’d be abandoning an arena they themselves own, or even that this deal does anything to stop them from threatening to leave again later. But, you know, cold Omaha.
- Salt Lake City Redevelopment Agency chair Lisa Adams says it was a “rookie mistake” to schedule the arena subsidy vote only one day in advance, and that if she had it to do over again she’d give a month of lead time so people could actually discuss the plan first. Not that she’s offering to go back and change her vote now, but, you know, next time.
Once again, $22.7 million isn’t a huge subsidy for the year 2016, but on the other hand Salt Lake got exactly zero in exchange: no added arena revenues, no signed commitment to stay in Utah for a longer term, just 60% of the additional property tax revenues from the increased value of the arena — where if they hadn’t approved the subsidy, they’d be getting 100% of those. If this is the last time the Jazz ask for public money for the next couple of decades, it’s at least a fairly modest sum; if it turns out to be the camel’s nose, that’ll be a different story.
The Salt Lake City Redevelopment Agency unanimously approved $22.7 million in tax-increment financing kickbacks for the Utah Jazz‘s $120 million in arena renovations yesterday, because renovations iz gud:
“The improvements they will be making … will be significant and will really add value to the venue and to the neighborhood,” said RDA Vice Chairman Derek Kitchen, one of six board members who voted for the tax break.
As discussed yesterday, there is really no reason for Salt Lake City to be cutting the Jazz a tax break, given that the team owns its arena and isn’t really a danger to go anywhere (or cancel the renovations) if it didn’t get the money. At the same time, it’s only 40% of future increases in property taxes, from both the arena and the rest of the TIF district, and if property tax receipts don’t rise, the city is off the hook for it, and it’s only $23 million on a $120 million project, and $23 million is practically nothing these days, right?
We’re ultimately down to asking whether throwing a relatively small (but still large in normal human terms) amount of money down a hole for no good reason is something to complain about, or something to be glad isn’t so much worse. And the obvious answer is “yes.”
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.
The Utah Jazz on Monday will make a “major facility announcement,” and are expected to unveil plans to update EnergySolutions Arena…
The downtown arena seats 19,911 but has been has surpassed by newer, flashier arenas with more premium amenities since its construction in 1991. In recent years, the Jazz have made minor improvements, such as adding restaurants and clubs. However, by NBA standards the arena boasts relatively few suites (50) and even less luxury seating near the court.
There’s definitely going to be a new scoreboard involved, but as for whether a more extensive renovation is in the works, and whether public money will be requested, we’ll have to wait another few hours.
UPDATE: Turns out it was $15 million worth of new video screens and new kitchens in the luxury suites. That’s a major arena announcement? Utah Jazz p.r. department, I will never believe your hyperbole again.