Teeples: Without convention center hotel, large-scale sporting events may not be in Utah's future
A study commissioned by Visit Salt Lake and shared with the Deseret News found Salt Lake City lost 27 citywide conventions in the last year. Beck indicated that convention planners for 23 of those lost conventions specifically pointed to the lack of a convention hotel. That translates to tens of millions of lost dollars to the Utah economy.
Salt Lake County has also commissioned studies to understand the economic impact of a convention hotel. Most recently, a report from Strategic Advisory Group, also shared with the Deseret News, found that such infrastructure would deliver $170 million in annual economic impact, 2,060 jobs and an estimated $600 million in new state and local tax revenue over a 30-year period.
According to that report, 40 other U.S. cities have invested in convention center hotels.
Why Salt Lake City does not have a convention center hotel
The problem with building a convention center hotel and the accompanying infrastructure is the price tag. While local developers desire to build the hotel itself, they have looked to the state to acquire the land and construct a parking structure, which alone would cost the state approximately $100 million up front. The cost of the entire project is apparently too much for private developers to handle by themselves.
Proponents for a hotel have advocated public-private partnerships to fund development. Such arrangements are not uncommon. Local and state governments generally are willing to subsidize development because the costs are paid off from new tax revenues these properties create and development creates jobs and stimulates the local economy.
“There are times when the greater good is served through a public/private venture,” Ryan Barker, development consultant to Royal Wood Properties, said. “In the case of this project, we have the opportunity to bring an additional 150,000 people to our state each year through new demand, which means $170 million to our economy.”
Visit Salt Lake and other proponents for a convention center hotel have worked for years with businessmen and lawmakers to arrange such tax benefits for entrepreneurs willing to build a hotel. Those efforts brought a bill to vote in the Utah State Legislature this year by which the state of Utah would acquire the land and build a parking garage. Private developers would cover the rest. The bill passed the State Senate but failed in the House.
One of the more notable skeptics is Utah Gov. Gary Herbert.
“I'm a free market guy," Herbert told reporters in March. "I'm a little concerned about subsidizing one entity against the private sector and others who are not getting help from government. It doesn't seem fair."
The Utah Constitution requires the state to maintain a balanced budget, which means that money for a hotel would come at the expense of other projects such as public education ($130 million), state employee health insurance ($35 million), state-funded retirement pensions ($45 million), state and local jails ($18 million) and improvement and maintenance for the Capitol building, ($55 million) among other needs.
“Me, personally, I'm not in favor of it. I'm not convinced it's a good use of taxpayer money to subsidize a hotel," House Speaker Becky Lockhart said in March.
Rock and a hard place
In the end, decision-makers face a tough road. Utah residents want to see tourism growth and economic development, but they also want to see fiscally responsible government.
For a majority in the Utah House, those two considerations are diametrically opposed for now. Regardless, the reality is Utah isn’t likely to see growth in big events — sports or otherwise — until lawmakers and developers get something figured out.
- BYU basketball: Cougars outlast San Francisco...
- Ranking the best NBA players to ever come out...
- WCC Championship game tale of the tape, BYU...
- San Francisco coach apologizes for postgame...
- BYU football: Bronson Kaufusi excited about...
- BYU basketball: Tyler Haws passes Russell...
- BYU report card vs. San Francisco: Cougars...
- Brad Rock: Ex-Jazz players skip the drama
- BYU basketball: Cougars outlast San... 85
- Utah basketball: Runnin' Utes come up... 74
- High school boys basketball: 5A/4A/1A... 57
- San Francisco coach apologizes for... 44
- BYU basketball: Despite dearth of... 34
- Utah basketball: Runnin' Utes eager to... 32
- BYU basketball: Bottom seed LMU knocks... 26
- Krystkowiak asks Runnin' Utes to stay... 24