The Election Day vote by Holladay residents to reject zoning for a high-density development at the old Cottonwood Mall site was legally valid, the Utah Supreme Court ruled Wednesday.

In a much-awaited decision, the five-member high court found unanimously that the City Council acted in a lawmaking fashion in May when it approved a development master plan for the $560 million project known as Holladay Quarter, on land near 4800 S. Highland Drive.

Enacting that "broad zoning ordinance,” justices ruled in a 17-page decision, was a legislative act, not an administrative one as the city and developers had argued — leaving the city’s approval open to challenge at the polls through a grass-roots referendum.

Holladay’s mixed-use zoning plan for the 57-acre site, justices said, was “generally applicable” and “involved the weighing of broad, competing policy considerations,” making it legislative. The case, Baker vs. Carlson, is being closely watched by other cities facing similar opposition from residents over high-density development.

Wednesday’s decision, which upholds the findings in September of 3rd District Judge Richard McKelvie, effectively lets stand the Nov. 6 election result in which Holladay residents rejected the housing, office and retail development by a handy margin of 58 percent to 42 percent.

The Utah Supreme Court had come under criticism for not clarifying the issue before the citywide vote, even after both sides had expedited the case in hopes of getting a ruling before Election Day. And, in a rare move, the justices sought to explain their reasons for not issuing an opinion sooner, saying they could not reach a consensus quickly enough for a detailed ruling before the polling.

"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,” said the opinion, written on the court’s behalf by Justice Deno Himonas. “We regret any uncertainty that this course of action has created and reaffirm our ongoing commitment to resolving these matters as quickly as possible.”

The ruling was welcomed by members of Unite for Holladay, the group that had gathered signatures over the summer to put Holladay Quarter on the November ballot. Its members contend the development was too dense and too focused on residential units for Holladay’s needs.

The plan by developers Ivory Homes and Woodbury Corp. had proposed a spread of retail outlets, restaurants and office towers combined with a 775-unit high-rise apartment complex and 210 single-family homes.

Brett Stohlton, a Unite for Holladay organizer, said in a statement that his group was pleased with the court’s findings in upholding the ballot result.

“On November 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 of Holladay.”

Holladay Mayor Rob Dahle said late Wednesday he was “obviously incredibly disappointed” by the court’s decision, on behalf of both the city and the developers.

"We spent hundreds of hours, and they’ve spent millions of dollars, to put a compromise development together that works for the property owner, the developers and the citizens,” Dahle said. “We felt we reached the best compromise we could, but obviously the citizens disagreed with that.”

Dahle said the court’s delay in ruling until after Election Day had itself effectively killed the project. City officials had argued that their approval of Holladay Quarter was an administrative act and not subject to referendum.

“We were all shocked there was no decision prior to the vote,” the mayor said.

But developers were not ready Wednesday to say the prospect of developing the site was dead. Officials with the Utah-based companies had slogged through nearly 18 months of public hearings and negotiations on zoning before the council’s final approval, only to see that reversed by a referendum.

In a joint statement, Clark Ivory, CEO of Ivory Homes, and Jeff Woodbury, executive vice president for Woodbury Corp., said that while they were disappointed with the ruling, “we understand that this was a complicated issue.”

“Good planning requires a partnership with property owners and cities,” they said in their statement. “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.”

The statement said Ivory, Woodbury and the site’s owner, Howard Hughes Corp., “will take some time to assess our future plans with the property.”

“We are grateful,” the statement continued, “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.”

In its ruling, the Supreme Court reacted to the idea of “zoning by referendum,” playing down fears its findings could “wreak widespread havoc with respect to other large, master-planned communities,” as attorneys for the city and Ivory had warned.

“We are sensitive to these concerns,” the court wrote, adding that instead, it was the specific nature of Holladay’s mixed-use zoning plan and policy decisions leading up to its adoption that led to it being deemed a legislative act.

“In so holding, we do not mean to suggest that every site development plan approved pursuant to a zoning ordinance will be legislative in nature," the justices wrote. “Indeed, it is entirely possible that many site development plan approvals (and, more generally, land use application approvals) will constitute administrative acts.”