Utah developer seeks to block public vote on former Cottonwood Mall site, threatens to abandon residential and retail project

(Rendering by Woodbury Corp.) An aerial rendering of Holladay Quarter, a proposed development on the former site of the Cottonwood Mall in Holladay.

Utah’s largest homebuilder has gone to court in hope of blocking any public vote this fall on its proposed high-density residential and retail development at the former Cottonwood Mall site in Holladay.

A subsidiary of Ivory Homes Ltd. says the company’s legal and financial stakes in the $560 million project are substantial enough to justify it intervening in an emerging court fight between the city and residents opposed to the development dubbed Holladay Quarter.

Lawyers for Ivory Development have filed to dismiss or expedite to the Utah Supreme Court a lawsuit brought against the city by residents Paul Baker and Stephen Stuart. The company also sued to prevent Holladay Recorder Stephanie Carlson from certifying or permitting any ballot measure.

Without a resolution in the company’s favor before Election Day, its lawyers said, “Ivory will have no choice but to abandon the project, at a significant loss.”

“In developing this project and participating in the lengthy and comprehensive public process, Ivory has invested hundreds of thousands of dollars and countless hours,” its lawyers said Friday in near-simultaneous Utah Supreme Court and 3rd District Court filings. “If voters are allowed to undo the public process that has taken place over the last 18 months, Ivory will have wasted those valuable resources.”

A community group fighting the project, Unite for Holladay, said this week in a statement that Ivory’s lawyers were trying to dismiss its case “to prevent a vote on this important issue.”

Ivory and partner Woodbury Corp. won city approval in May to build the mixed-use complex of retail outlets, eateries and office space combined with 775 apartments and 210 single-family homes at the former mall site, which has sat vacant since 2008.

Residents objected to the plan they say is too dense for the area and was approved through a faulty city process. Members of Unite for Holladay circulated petitions pressing for a citywide vote on the City Council decisions that cleared the 57-acre project.

Baker and Stuart, both members of Unite for Holladay, filed a complaint in 3rd District Court last week, after the city turned away their petition. Although it probably had enough valid signatures to win a ballot spot, city officials rejected the petition on legal grounds — but they also scheduled a special election for Nov. 6 in case their arguments don’t hold up before a judge.

The main legal dispute between the city and Unite for Holladay focuses on whether those key City Council zoning decisions amounted to crafting new city policy at the time or simply interpreting rules already on the books.

Unite for Holladay says the city’s votes on zoning and a site development master plan were “legislative” in nature — and subject to public review at the ballot box under Utah law.

City officials say their approval was “administrative” and based on existing zoning and other city ordinances, thus ineligible to be second-guessed in a referendum.

While weighing in on the city’s side, Ivory Development also argues that any delay in resolving the legal question puts the entire project in financial jeopardy. To speed the case, it has asked that it be moved immediately to the Utah Supreme Court, which, the company says, "is better positioned to make a speedy and final decision.”

Ivory Development is at a “crucial stage of seeking tenants and commercial commitments for the project,” its attorneys wrote. “If the viability of the project is in doubt, such commitments cannot be secured, and Ivory would likely be forced to abandon the project, resulting in significant economic loss to Ivory and the city.”

Court documents also say Ivory and Woodbury Corp. have spent more than $1 million on engineering, design, marketing and legal services, including nearly $600,000 “to address public and official concerns at a series of nearly 30 public meetings on the project.”

That, the company said in filings, does not include $250,000 Ivory has paid to the Cottonwood Mall site owners as a nonrefundable deposit to secure Ivory’s right to buy the land, nor $270,000 in other expenses for Woodbury.

Ivory Development needs to join the lawsuit, it argues, to adequately defend those and other financial interests — and can’t expect city officials to do that job for the company. While Holladay has its own financial stake in the project through its tax base, the company said in court briefs, it “is a government entity that does not face business pressures to realize a profit.”