The estimated price tag for a proposed new arena to house the Utah Jazz is now up to about $75 million, but no one is sure yet how the arena will be paid for.
While a number of funding options are being explored, the key element of any financing package is how much money the Jazz - or Jazz owner Larry Miller - are willing to put up toward construction, the finance committee of the Salt Palace feasibility Task Force agreed during a Monday meeting.The Jazz were not represented at the meeting, probably because they aren't ready to say how big the team's financial commitment will be, said committee chairman Kenneth Knight, who met with Jazz president and general manager Dave Checketts last week.
Estimates for costs of construction of the proposed 18,500-seat arena and an adjoining 1,500-vehicle parking structure range from $74 million, as determined by a task force costs committee, to $77 million, the figure submitted by consulting firm DMJM, which has a $183,000 contract to assist the task force.
Those figures include the price of land but do not include the cost of borrowing money. The Jazz will be expected to come up with about half the arena cost.
"The Jazz want to own part of the arena," said committee member Randall Mackey. "They may be willing to finance up to half, but they would expect some sort of ownership. So we may have a jointly owned arena."
One concept that would accommodate joint ownership is creation of an arena corporation, with Salt Lake City, Salt Lake County, the state and the Jazz each owning shares. A similar hybrid ownership controls the home arena of the Phoenix Suns.
The estimated arena price tag is just part of a $173 million wish list of projects passed along to the finance committee from two other task force committees.
The wish list includes an estimated $64 million for upgraded and expanded convention facilities, $20 million for a science center and $7 million for a performing arts center.
A locations committee has recommended building the arena on Block 79, between South Temple, First South, and Third and Fourth West streets, directly south of the Triad Center.
Salt Lake County commissioners have pledged they will not raise taxes to build a new arena, and the finance committee members are charged with finding creative financing that doesn't require a tax hike.
One option being considered is creation of a downtown taxing district, under which property owners within the district would be assessed an annual tax to help pay off the amount borrowed for construction costs.
Also being considered are tax increment financing _ which would allow the use of a portion of property taxes generated from within a special redevelopment area to be used to pay off construction debt _ and a general obligation bond issue.
Private investor financing is also being explored. It's likely a combination of several of the various options could be used. All the methods being considered have disadvantages, not the least of which is that voter or property owner approval is required for some of them.