SLC leases land beneath Delta Center to Jazz owners for $1 a year

New pact includes a 30-year home-game covenant for NBA, NHL teams and could extend for 100 years.

(Francisco Kjolseth | The Salt Lake Tribune) The Delta Center is pictured in 2024. Salt Lake City renewed its lease of the land under the stadium, ensuring a Smith Entertainment Group subsidiary will be able to continue leasing the property for a buck a year.

Along with Salt Lake City’s $900 million in taxpayer support to Smith Entertainment Group’s new sports and entertainment district downtown, the city will continue to lease the Delta Center property to SEG for $1 a year.

The underlying land at 300 West and South Temple has long belonged to what’s now called the city’s Community Reinvestment Agency. In a major overhaul Tuesday to its existing 50-year ground lease with prior Utah Jazz owners, signed in 1990, that arrangement could now last another 100 years.

The overhauled buck-a-year ground lease with SEG affiliate Jazz Arena Investors includes major conditions, including guarantees for the stadium’s longterm maintenance and an initial 30-year covenant that the Jazz NBA franchise, the new Utah Mammoth NHL franchise — or both — will use it as their primary venue for home games.

After those 30 years, if no NBA or NHL team is using the arena that way, rent on the land could leap substantially, to market value for that prime downtown real estate.

(Ryan Smith via X) Utah Jazz owner Ryan Smith posted this rendering of the proposed downtown sports and entertainment district on X on Tuesday, Feb. 27, 2024.

In that scenario, Jazz Arena Investors would have the ability to renew the lease for up to seven additional 10-year terms. It would also still be required to use commercially reasonable efforts to keep the arena “open, operational, and activated throughout the year” — though not necessarily with a professional or other sports team using it.

Bigger picture, according to Mayor Erin Mendenhall, the new lease is a key piece of the city’s nearly billion-dollar deal with SEG to create a transformative Sports, Entertainment, Culture and Convention District downtown — because it ensures the sports arena site “remains in public hands for generations to come.”

“From the very beginning in 1990 and even today, the dollar amount has never been the purpose of this lease,” the mayor told the City Council Tuesday, before it voted to approve the new contract. “It’s about long-term value that we see in the arena and in our downtown core.”

“It’s about ensuring that this iconic venue — with its appropriate name of the Delta Center now back on it — remains a benefit to our community in new and in meaningful ways,” she said.

The city’s participation agreement with SEG to create the district was approved late last year, along with a supporting half-cent sales tax hike worth $1.2 billion over three decades.

There was no opposition from the City Council to the ground lease provisions, although council member Alejandro Puy sought assurances that the city would negotiate separately with SEG on relocating or otherwise protecting several public art installations on the north side of the arena.

(Trent Nelson | The Salt Lake Tribune) Construction in progress to renovate the Delta Center in Salt Lake City on Wednesday, April 30, 2025.

SEG has already embarked on its multibillion-dollar plans to remake a multi-block area that includes the arena parcel and the Salt Palace Convention Center. An overhaul of the Delta Center’s interior to better serve the Jazz’s basketball season and the new hockey team got underway this year.

City Attorney Mark Kittrell said extending the ground lease potentially to 2125 “will foster activation and higher quality development of the area” while bringing greater economic and public benefits to the city.

The new lease gives Jazz Arena Investors exclusive control over naming rights at the stadium, as well as rights to 100% of any royalties or revenues from such a naming partnership.

(Trent Nelson | The Salt Lake Tribune) A banner is raised with the new name for Salt Lake City’s NHL team, Utah Mammoth, in Salt Lake City on Wednesday, May 7, 2025.

The pact also permits Jazz Arena Investors to sublet the entire Delta Center property to someone else — subject to the Community Reinvestment Agency’s prior written approval.

The SEG subsidiary can sublease portions of the stadium as well, but only for uses the city approves, including bars, restaurants, retail, entertainment and hospitality, as well as financial institutions and other professional services such as health and wellness businesses.

Many of those subleases would also be subject to city review, depending on when they’re proposed during those initial 30 years.

Jazz Arena Investors will be required to maintain and repair the stadium to keep in a “first-class condition” — suitable for NBA or NHL play as long as one of the teams is using it as its main home-game venue. If not, it would be maintained to a standard comparable to other similar multipurpose venues without professional sports teams.

The lease also significantly boosts various kinds of insurance on the site, including a requirement that the company keep umbrella liability coverage of up to $50 million.

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