Software billionaire Ryan Smith has big plans for his sports empire. He wants the Utah Jazz of the National Basketball Association to play in a revamped arena, flanked by bustling plazas and in the shadow of a new skyscraper.
Local lawmakers have offered $900 million to make sure that happens in Salt Lake City.
Smith Entertainment Group — owner of the Jazz, two pro soccer teams and a yet-unnamed National Hockey League club — is proposing a makeover of the city’s downtown that includes a remodeled arena, new hotel and a residential tower that could become the city’s tallest. Residents and visitors would subsidize the development through a higher sales tax, the proceeds of which would mostly flow to Smith’s group.
Not everyone likes the idea. The longest-serving member of the city’s planning commission, Bree Scheer, believes it to be a sweetheart deal with no major benefit for the municipality’s more than 200,000 residents.
“My preference as an urban planner is that we have sports,” Scheer said. “But I don’t see giving away $900 million to the sports guy and giving the land and just rolling over. Because he’s going to make a ton of money.”
Most of the subsidy would be spent revamping the existing downtown sports arena, the Delta Center. But the development will also facilitate new business opportunities and cultural happenings and generally enliven the area, a spokesperson for Smith’s group wrote in an emailed statement.
“Smith Entertainment Group is committed to reimagining downtown Salt Lake City to help ensure a vibrant, thriving downtown urban core for generations to come,” the SEG spokesperson said.
Sports owners have long pit cities against one another in attempts to get public funding for stadiums. In April, voters in Missouri rejected a $2 billion subsidy for a stadium renovation for the Kansas City Chiefs of the National Football League and a new ballpark for the Royals of Major League Baseball. Lawmakers in neighboring Kansas then hurried to pass a bill allowing for their state to do what Missouri would not.
The deal that brought an NHL team to Salt Lake City came after voters in Arizona declined to help the Coyotes build a new arena there.
David Berri, a sports economist and professor at Southern Utah University, said $900 million is a hefty subsidy for something that will not be very lucrative for the taxpayers footing the bill. Deals like this don’t really generate economic growth for cities, he said, but are better thought of as something like a public park.
“Salt Lake City would desperately like to be thought of as a major city, so they need a basketball team,” Berri said. “It’s unfair because we’re shuffling taxpayer money to someone who’s fabulously wealthy.”
Dejan Eskic, a senior research fellow at the Kem C. Gardner Policy Institute at the University of Utah and a Salt Lake City resident, said he’s not put off by the tax increase because it carries exemptions for essentials like groceries. Eskic sees the project as a downtown revitalization that just happens to involve the city’s sports teams.
Qualtrics fortune
Smith, 46, made his fortune through the software company Qualtrics International Inc., which he co-founded with his brother Jared and father, Scott, in 2002. SAP SE acquired the company in 2019 for $8 billion and resold it to Silver Lake and the Canada Pension Plan Investment Board in 2023 at a valuation of $12.5 billion. Smith netted roughly $2 billion in cash from the sales, according to Bloomberg Billionaires Index data.
He’s still the executive chairman of Qualtrics but has lately turned his attention to sports. Smith bought a majority stake in the Utah Jazz in 2020, professional soccer’s Real Salt Lake in 2022 and completed the hockey team deal this year.
Now Smith has received permission to build as high as 600 feet (183 meters) in downtown Salt Lake City. A structure of that height would give him by far the state’s tallest building — the current titleholder, an apartment building called Astra Tower, stands at about 450 feet.
Salt Lake City’s planning commission is skeptical of the billionaire’s proposal, recommending unanimously that the City Council reject a rezoning plan in June. The council approved the proposal anyway, and Smith’s group asked that the planning commission be kept out of future proposals in favor of a staff level review. The City Council denied that request.
Scheer said she opposed the rezoning plan because SEG’s proposal was light on details. And while she’s not opposed to tall buildings, Scheer said, Smith’s group has so much land to build on that there isn’t a clear reason to make something taller.
“It’s not like it’s a real tight squeeze,” she said. “What’s gonna happen? We don’t know.”
Much of the public upset over Smith’s plans has centered on the fate of Abravanel Hall, which opened in 1979 and is home to the Utah Symphony. A change.org petition to “Save Abravanel Hall” has garnered more than 50,000 signatures since May. Last week, Mike Maughan, an executive at SEG, told a legislative committee that their goal is “preserving Abravanel Hall as is.”
If his plans don’t work out in Salt Lake City, Smith could move everything to the suburbs. In April, he told Bloomberg News that he’d simply build a new arena on land he already owns. Both of his family’s professional soccer teams play in a stadium in Sandy, a town about 19 miles south of Salt Lake City and closer to where Smith lives in Provo.
“It would be a lot easier for us,” Smith told KLS News in July. “However, it’s part of that mission of Utah. It’s part of the arts, it’s part of entertainment. It’s the right thing to do for our state.”