Kristin Murphy, Deseret News
FILE - The site of the closed down Cottonwood Mall in Holladay on Monday, Sept. 10, 2018. Holladay voters' decision to shoot down the controversial development on the site of the old Cottonwood Mall will stand, the Utah Supreme Court has ruled.

SALT LAKE CITY — Holladay voters' decision to shoot down the controversial development on the site of the old Cottonwood Mall will stand, the Utah Supreme Court has ruled.

After frustrations from residents, developers and city leaders that a ruling had not come before the November election, the Utah Supreme Court issued its opinion Wednesday afternoon affirming a 3rd District judge's opinion that the voter referendum to block the development was valid.

"We agree with the district court that the city was exercising its legislative powers when it approved (the development)," Utah Supreme Court judges wrote in the opinion, determining it was "therefore referable" to a referendum.

City officials and developers from Ivory Homes and its partners at Woodbury Corp. had previously argued the approval of the project was administrative, rather than legislative. The city rejected the referendum but still printed the issue on the Nov. 6 ballot in case it was challenged in court.

Sure enough, referendum organizers sued, and a 3rd District judge ruled in favor of the referendum. City officials then appealed to the Utah Supreme Court in September, but the court affirmed the district judge's decision Wednesday.

The opinion was forwarded Wednesday to the Deseret News by organizers of Unite for Holladay, the citizen-led group that gathered enough signatures earlier this year to put the referendum on the ballot, concerned by the new level of density the project would bring to Holladay.

The decision holds up Holladay voters' rejection — with 58 percent against — of the plan to build 775 high-rise apartments, more than 200 homes and dozens of shops and restaurants on the 57-acre site of the former Cottonwood Mall.

Brett Stohlton, one of the organizers of Unite for Holladay, said in a prepared statement his group was "pleased" with the court's decision.

"On Nov. 6, the people voted definitely against this project. It's fundamental to our way of governing that the people are heard and their will respected," Stohlton said. "We want to see the Cottonwood Mall site developed in a way that creates enduring economic and community value and hope our elected officials will lead from the front in representing the interests and voice of the people in Holladay."

In the court's written opinion, judges acknowledged the "time-sensitive nature" of the case and expressed "regret" for "any uncertainty" that the delay created. However, judges explained why the court did not issue a ruling prior to the election, even though "the court endeavors to resolve election matters in a way that provides clarity to those involved in the timeliest manner possible."

"Unfortunately, there was not sufficient consensus among us regarding the correct outcome to issue such an order," judges wrote. "And we determined that a perceived delay in issuing this decision was less objectionable than issuing a premature order that might not reflect the ultimate disposition of the case."

Ultimately, however, the court issued a unanimous opinion based on interpretation of previous cases related to land use decisions and also stated developers and city officials' failure to address certain case-law issues was "fatal."

"We wish to emphasize, however, that we are not opposed to revisiting the issue should it properly come before us," the court opinion states.

The court's ruling, paired with Holladay's vote, now scraps the current plans to develop the 57 acres of dirt and asphalt, and forces property owners and developers back to the drawing board.

In a joint statement issued Wednesday, developers Clark Ivory, CEO of Ivory Homes, and Jeff Woodbury, senior vice president of Woodbury, said that while they were "disappointed" by the court's decision, "we understand that this was a complicated issue" and it was difficult for the court to reach "sufficient consensus," which led to the ruling's delay after Election Day.

Ivory and others, including Abby Osborne, vice president of government affairs for the Salt Lake Chamber, have previously expressed concerns about the implications of a ruling in favor of the referendum and how it could impact Utah's future development and creeping housing crisis.

A ruling in favor of the referendum, Ivory has said, could have far-reaching impacts on development issues across Utah and create new hurdles for developers aiming to increase the state's housing stock.

Osborne has said the attitude of "not in my back yard" tied to high-density is becoming increasingly problematic in a time when more housing stock is needed to keep up with demand‚ or else Utah's housing prices will continue to skyrocket.

"Good planning requires a partnership with property owners and cities," Ivory and Woodbury said. "Utah must avoid becoming a state where zoning by referendum is commonplace. This simply does not serve the long-term public interest and places property rights at risk."

As for the future of the property? That remains in limbo.

Ivory and Woodbury said their companies and the landowner will "take some time to assess our future plans with the property."

"We are grateful to the people of Holladay who understand the importance of redeveloping the old Cottonwood Mall site into a vibrant part of the city’s future," Ivory and Woodbury said.

Holladay Mayor Rob Dahle said he was "disappointed" in the ruling and what it means for not only the former mall's property but also what it could mean for development across Utah.

"You've got this Catch-22, where (cities) have got this pressure to provide more affordable options in a real estate market that is escalating … and you try to deal with the problem, but you get major pushback from residents," Dahle said. "It's going to create a difficult environment in some if not most of the municipalities along the Wasatch Front."

The court in its opinion said it was "sensitive" to concerns that the decision could "wreak widespread havoc with respect to other large, master-planned communities that have been built across Utah" and that such projects could become "targets of citizen referenda." However, judges wrote their opinion does not suggest all site development plan approvals are legislative and not administrative, and that is "entirely dependent on how the municipality reaches its decision."

Dahle said the city spent more than two years and the developers spent "millions of dollars to finally come up with something that we thought was going to be a productive development on that site."

"And to have it basically scuttled and returned to basically an empty piece of dirt is obviously very disappointing," Dahle said.

However, Dahle said city officials "respect the role the court plays in the process."

"I'm hoping we can keep the conversation going to see if there's any opportunity to re-engage (with developers) … in terms of coming up with an amended plan," Dahle said. "Because if they don't, I think we're looking at sitting on that dirt for quite some time."

However, some might push for changes to Utah's referendum laws. Derek Miller, president and CEO of the Salt Lake Chamber, issued a statement indicating the chamber will lobby the 2019 Utah Legislature for changes.

While Utah's growing population is "great for our state," it "brings its own challenges," Miller said.

31 comments on this story

"We must grow smart. One symptom of growth is the housing affordability challenge that, if left unaddressed, will become a crisis," Miller said. "The impacts go far beyond simply finding an affordable place to live, to potentially eroding the very foundation of our economic prosperity."

So as the 2019 session approaches, Miller said the chamber "will lead the charge for smart growth policies that provide clarity and certainty for developers, cities and residents on Utah's referendum laws."

"This certainty is essential to our continued economic success," Miller said.