A Salt Lake County task force appears to have ruled out an expanded Salt Palace as a future home for the Utah Jazz.
A study commissioned by the task force, and paid for by the Jazz, says the Salt Palace arena cannot be expanded economically to add the 6,000 more seats the team needs to boost ticket revenues.Instead, the $15,000 study recommends a new 18,500-seat arena be built, with a price tag estimated by consultant Mike Hallmark to be in the range of $40 million to $50 million.
Hallmark, senior vice president of Kansas City-based Ellerbe Becket Sports Architects, delivered the study findings during a briefing for task force members Friday afternoon that was staged for the benefit of the news media.
Many, if not all, task force members had been given an advance look at the results.
Because the briefing was not an official task force meeting, members could not take official votes. But they appeared to be in unanimous agreement with Deseret News publisher Wm. James Mortimer, a member of the task force, who said the group should confine its future efforts to studying the feasibility of a new arena.
In his report, Hallmark said the Salt Palace "is an excellent facility for events requiring a seating capacity of 12,000 to 16,000 seats, depending on the nature of the event. (But a) new arena having a minimum seating capacity of 18,500 seats, expandable to 20,000 to 22,000 seats, should be built."
The expansion feasibility study was done under the premise that the Jazz cannot continue to play in the current 12,444-seat Salt Palace _ which by next basketball season will be the smallest NBA arena - past the 1990-91 season.
Jazz president and general manager Dave Checketts said the team needs more seats _ and especially more top-dollar courtside seats _ so it can continue to meet its annual payroll, expected to double over the next five years to more than $10 million because of a new labor contract between the NBA and its players union.
Hallmark's study presented six expansion scenarios that would add up to 6,400 more seats to the Salt Palace. Only three of the scenarios were considered feasible, Hallmark said, and none was considered economical.
The expansion options ranged in cost from $26 million to $34 million and would have involved replacing the existing roof, and in one case, tearing out the arena's existing upper deck and rebuilding it.
All the expansion scenarios would add seats to the Salt Palace but would not add any additional courtside seats that can bring the Jazz $25 to $100 per game per ticket, Checketts said.
Only 30 percent of existing Salt Palace seats bring top-dollar revenues because the arena wasn't built with basketball in mind. But more than half the seats in a new arena would be premium-price tickets.
Checketts estimated the Jazz lose more than $1 million annually in potential season ticket revenues because the Salt Palace doesn't have as many premium seats as the team could sell to would-be season ticket purchasers, who refuse to buy tickets for available poorer-quality seats.
"There is a substantial difference in the (ticket sales) dollars that can be generated each night when you look at a new arena as opposed to an expanded Salt Palace," the Jazz president said.
Hallmark's estimate of $40 million for what he called "a bare-bones model" of a new 18,500-seat arena, and the more realistic $50 million estimate for a version with the usual amenities do not include the cost of purchasing land or building needed parking facilities.
Although land could be donated, the cost of parking facilities alone would undoubtedly add millions more to the final cost of a new arena.
But expanding the Salt Palace would have additional costs as well. There would be a $6 million loss of direct Salt Palace revenue because events and conventions could not be booked during the 18-24 months needed to complete the expansion project.
Regular Salt Palace tenants like the Jazz and the Golden Eagles hockey club would lose revenue, as would downtown merchants, and state and local governments would lose sales tax revenue.
"That would be the end of my hockey club," said Golden Eagles owner Art Teece, referring to the possibility of being displaced from home ice for two seasons by an expansion project.