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Kristin Murphy, Deseret News
Site of the closed down Cottonwood Mall in Holladay on Monday, Sept. 10, 2018. Third District Court issued a split ruling on the pending legal challenges about the proposed redevelopment of the Cottonwood Mall site.

SALT LAKE CITY — Utah's Supreme Court heard arguments but didn't rule Friday on whether Holladay residents can vote down the Cottonwood Mall development in November, in a pressing case that both sides fear could set a harmful precedent for city land use.

On one hand, justices wondered whether a ruling for the developers would encourage city governments to create "anything goes" zones, in which voters would lose their right to challenge new land uses long before any of the particulars are known.

On the other hand, justices asked attorneys whether the approval of the development plan — which Ivory Homes and Woodbury Corporation submitted this spring under a loosely defined zone that won legislative approval in 2007 — differs from other land-use decisions that are commonly considered administrative, and thus not subject to referendum.

The court could rule anytime before Election Day, Nov. 6.

Afterward, Holladay Mayor Rob Dahle said he didn't have a feel for which way the five justices were leaning.

"Listening to it, I think you could tell why we're here," he said. "It's not a clear issue."

Laura Seitz, Deseret News
Paul Baker, a member of Unite for Holladay, stands outside the property of the former Cottonwood Mall site in Holladay on Thursday, Sept. 6, 2018.

The case stems from a proposal to build 775 high-rise apartments, more than 200 homes and dozens of shops and restaurants at the 57-acre site of the old mall, most of it dormant for more than a decade.

Holladay's City Council unanimously approved the plan in spring, but citizen organizers — primarily objecting to its density and the potential effect on traffic — collected about 6,500 certified signatures to put two questions on the ballot. In one, they would ask whether residents approve of the plan, and in the other, whether they approve of an agreement that would give the developers a tax increment subsidy.

City officials rejected the referendum, determining that the council's approval had been an administrative — not legislative — act. The legislative portion, city officials argued, came and went when the city zoned the mall acreage for an undefined blend of residential and commercial uses back in 2007.

After referendum organizers sued, 3rd District Judge Richard McKelvie ruled earlier this month that the first question should be on the ballot because the development plan involved the type of broad policy considerations that are the telltale signs of legislation. The second question was a "close call," McKelvie wrote, but amounted to an administrative act and was correctly rejected.

Various pro-development organizations wrote in court briefs that such referendums could stymie development and cost developers hundreds of millions of dollars, but McKelvie said that wasn't an argument for depriving voters of their rights.

The top court now has mere weeks to re-evaluate a case that has far-reaching implications for high-density developments in Utah, where the population is expected to balloon from 3.2 million to 5 million by 2050, according to an estimate from the University of Utah's Kem C. Gardner Policy Institute.

Earlier this year, the threat of referendum preceded Salt Lake County Mayor Ben McAdams' decision to veto an 8,800-unit development on unincorporated county land near Herriman, and Orem residents gathered enough signatures to challenge on November's ballot 1,600 units of student housing near Utah Valley University.

Before a packed courtroom Friday, justices lingered on questions of what constitutes legislative zoning and whether the development plan approved by the Holladay council would apply to any other land-use applicants — as zoning decisions would.

Chief Justice Matthew Durrant said the original 2007 zoning adopted by Holladay's council was "almost as broad as it can be."

"It seems to me, at least at this point … that this (additional development plan) really effectively functions as a zone," Durrant said.

Kristin Murphy, Deseret News
Site of the closed down Cottonwood Mall in Holladay on Monday, Sept. 10, 2018. Third District Court issued a split ruling on the pending legal challenges about the proposed redevelopment of the Cottonwood Mall site.

But attorney Alan Sullivan, representing the developers, said there's nothing in the law that says zones need to be especially detailed, and that many cities have mixed-use zones that are just as broadly defined. What's more, Sullivan said, the development plan is pursuant to a binding agreement between the developers and the city. That makes it contractual, he said, not legislative.

Justice John Pearce asked attorneys whether cities could create hypothetical free-for-all zones that they could then amend later, after the voters' opportunity for a referendum had passed. Durrant added that all Holladay's voters knew in 2007 was that a development at the Cottonwood Mall site would be at least 30 acres and involve some mix of uses.

"They have precious little information," Durrant said. "If that was their only opportunity, were they able to make an informed decision? Are they effectively cut out of the process, in terms of a referendum?"

Justice Constandinos Himonas said that under the 2007 agreement, a development could involve 1 percent commercial uses and 99 percent residential uses, or vice versa. "You've created this general vessel in which you get to pour all these decisions and mix it around."

Attorney J. Craig Smith, for the referendum organizers, agreed. After Sullivan distributed the development plan to the justices to show that the level of specificity went far beyond what most people would associate with zoning, Smith asked them to take another look. In his opinion, Smith said, that plan constitutes "the meat and potatoes of zoning."

But Smith faced hard questions, too. Justices seemed unconvinced that the development plan qualifies as legislation, given that it applies specifically to Ivory and Woodbury, even if it does involve momentous land-use decisions. The same ends could be achieved by clearly administrative acts, they pointed out, like conditional use permits.

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Justices didn't say when they would rule on the case. Holladay needs to send out ballots to voters in the military by Monday. The rest of the ballots will be mailed Oct. 8.

Smith suggested the justices could rule at any time before Election Day, and that it would do no harm to simply print the ballots with the referendum question and void the results if the court decides it isn't referable.

But Dahle said he was disappointed not to have more clarity.

"There had been some indications that maybe the court would make a decision tonight," he said.