With owner Larry H. Miller chipping in $45 million and local governments adding another $25 million, the Utah Jazz may have a new 18,500-seat downtown home to start the 1991-92 season.
If finalized by the parties involved, and if Utah lawmakers pass enabling legislation now under consideration, the tentative arena deal announced Tuesday morning would apparently commit the Jazz to staying in Salt Lake City for the foreseeable future and would assure construction of the needed new arena without raising taxes.While a number of details remain to be worked out - including on which of two sites the arena will be built - members of a Salt Lake County task force created to consider arena alternatives recommended the tentative deal to county commissioners and then voted to disband the task force.
Under the proposal hammered out over the past month in a series of almost daily behind-the-scenes meetings, Miller will spend $45 million to construct the arena building. The Salt Lake City Redevelopment Agency will bond for another $20 million to $25 million to purchase land and build a 7,500-vehicle parking facility.
The land would be leased to Miller and the Jazz for a nominal fee to build the arena. The redevelopment agency would repay its bond issue with revenues from taxes paid on properties within the agency's redevelopment areas, including the arena when completed.
Other local taxing entities, with the exception of Salt Lake City School District, also would give up their portions of redevelopment area property taxes to help pay off the bonds.
For the county, that tax revenue contribution will be about $7.6 million over the expected 12-year bond repayment period. The city's portion of bond repayment would be about $8.5 million.
The deal is conditional upon the Legislature's passage of HB390, which enables the redevelopment agency to participate in the tax revenue financing mechanism.
The bill has been passed out of House committee and has received tentative Senate approval, although it still faces final votes in both houses.
When the new arena is completed and after the Jazz and the Golden Eagles hockey club move in, the plan calls for the current Salt Palace arena to undergo a $40 million remodeling into new convention facilities, including 100,000 square feet of addition exhibition space, banquet facilities for 3,000 and additional meeting rooms.
The county will foot the remodeling bill, if financial help is forthcoming from the Legislature. However, the convention recommendation is separate from the arena deal and will be worked out over the next 12 months, said Commissioner Bart Barker. The county will not ask lawmakers for convention facilities funding until next year's legislative session.
Miller's financial commitment to build the arena makes it even less likely that he may decide to sell the Jazz franchise - which is thought to be worth at least three times more than the $20 million he paid for it in 1985 - to an out-of-state owner who would move the team.
The two sites considered most likely for the new arena are Block 79 south of the Triad center - bounded by South Temple and First South between Third and Fourth West - and the block bounded by West Temple, Second West, and Third and Fourth South. Both the city and the Jazz, whose votes will likely carry the most weight in the decision, have indicated preference for the Block 79 site.
Backed by Chamber
The Salt Lake Area Chamber of Commerce board of governors supports HB390, which enables the Salt Lake City Redevelopment Agency to bond for $20 million to $25 million to purchase land and build a parking area for the arena.