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Salt Lake County warns proposed changes to tax‑exempt bond rules could jeopardize downtown redevelopment financing
Summary
County Mayor Jenny Wilson told the council a potential federal change affecting the tax‑exempt status of bonds used in redevelopment financing could raise project costs and threaten the financing model for downtown Salt Lake redevelopment, including a transaction involving Smith Entertainment Group.
Salt Lake County Mayor Jenny Wilson raised a concern at the March 27 WFRC meeting that proposed federal changes to the tax‑exempt status of certain bonds could jeopardize financing for downtown redevelopment projects.
Wilson said banking partners were communicating that if bonds lose tax‑exempt status or if financing costs increase materially, it could add roughly 33% to project costs and make previously authorized downtown deals infeasible. She urged WFRC and partner agencies to engage the congressional delegation and federal contacts to communicate the local consequences of such a change.
Context at the meeting
Mayor Wilson said the issue had immediate implications for a planned downtown transaction involving Smith Entertainment Group and other redevelopment elements, including arena and entertainment district financing that the county and city have pursued. She asked WFRC and partner staff to support outreach to the delegation to highlight the practical impact on projects already in negotiation and on broader downtown revitalization efforts.
Quotations
"This is of concern to the county… the banking community is now communicating back as we look at a very compressed tight series of things that have to happen to move on the downtown redevelopment," Mayor Jenny Wilson said. "If you add the 33% additional cost… we simply can't do the deal."
Council response
Council staff and several members said they would coordinate outreach and noted meetings with congressional staff were under way; WFRC staff and League of Cities representatives in the room indicated they would support communication to the delegation.
Ending
Wilson said county officials would continue direct outreach to the governor’s office and congressional staff and asked WFRC staff to assist in coalition communication to highlight how a change in tax treatment could affect ongoing redevelopment transactions.
