From Deseret News archives:

Salt Lake County Council assails Palace plan

Measure to fund expansion is called a 'really bad deal'

Published: Wednesday, March 2, 2005 9:54 a.m. MST
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Salt Lake County Mayor Peter Corroon has gone back and forth on whether he supports the current Salt Palace expansion funding plan, but members of the County Council made themselves perfectly clear Tuesday: They hate it.

"This is a really bad deal for the county," Councilman Mark Crockett said. "We've got a longer term and higher interest payments — we are millions more than what this council originally anticipated."

Last week, Corroon approved of an amended state Senate bill wherein $7.5 million in costs were shifted from Salt Lake City and Sandy to Salt Lake County, saying he wanted to save city residents from a tax increase. On Tuesday, however, he said he opposed the funding package as a whole — a statement council members jumped on.

"The mayor has said he opposes it as it is, and I think a number of us do, and it's not clear that we would go forward" with Salt Palace expansion under the current financing scheme, Crockett said.

The plan, which has passed the Senate, calls for $11.4 million to be taken from Salt Lake City's innkeeper tax over six years, down from the original proposal of $19 million over 10 years. An increase to the county's hotel room tax, a shift in collection methods for the state car rental tax and money from Salt Lake County's coffers would fund the rest.

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So far, the state has been unwilling to pay for any of the cost, even though projections show it earning $2.2 million in extra yearly tax revenues from the expansion. Salt Lake City would gain $600,000 a year with the county getting $1.2 million.

Having the most to gain, the county has always assumed the lion's share of financing, but the amended bill may be more than even that leonine government can swallow.

"There simply won't be enough revenue in this bill to support a 15-year bond," county budget director Lance Brown said. "There's a substantial likelihood that we would have a negative outlook by the bond rating agencies," a first step toward downgrading the county's jealously guarded AAA bond rating.

"The state in my mind just dropped the ball on this," Councilwoman Jenny Wilson said. "It's worse than disappointing."

Part of the problem, however, may be that the county did not communicate a clear message to the Legislature.

"I don't know if anyone knows the precipice this thing is sitting on right now," Councilman Randy Horiuchi said. "I'm nervous, we're all nervous — it's erupted here today. We need more money."

For the bill to change, the county is going to have to do some fast persuading, since the Legislature adjourns today.

If the bill passes as it currently stands, several council members said they would have to think hard on whether to go forward with expansion — a drastic step that would mean withdrawal of the cash-cow Outdoor Retailers and other conventions. It's unlikely the council would go that far (apart from Crockett, whose skeptical view of the convention business is well known), but the heated rhetoric Tuesday spoke to members' depth of feeling on the subject.

"I like the Salt Palace, but I'm not sure it's worth this," Horiuchi said.

Salt Lake City Councilman Eric Jergensen, who has been working with county and state officials on the Salt Palace deal, said the current legislation allows the county and city to work out a reasonable funding deal.

Jergensen said the city is willing to spend up to $10 million on the project. City leaders have noted they see the least amount of increased tax revenue from the project with the state gaining the most and the county receiving the next highest amount.


Contributing: Brady Snyder.

E-mail: aedwards@desnews.com

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