A judge refused on Tuesday to temporarily block Salt Lake City from issuing demolition permits to developers wanting to tear down the historic Utah Theater on Main Street.
Third District Judge Robert Faust denied a motion by historic preservationists for a temporary restraining order against the city and its Redevelopment Agency, noting “glaring” legal problems with their approach, including suing city officials over the matter but not the property’s current owner.
Faust left open the option for Friends of the Utah Pantages Cinematic Theatre to revise and refile their request, which seeks to put demolition on hold while the group pursues a lawsuit to invalidate the city’s sale of the run-down property to developer Hines for construction of a luxury residential tower on the site.
“Once it’s destroyed, it’s destroyed. I get that,” Faust told lawyer Karthik Nadesan, representing theater supporters. “But you’re asking for a restraining order against the wrong people.”
The theater group, two business owners and other residents sued the city and its RDA in late February, alleging public officials had failed to comply with a Utah law requiring more thorough study and reports to state officials before they sold the site at 144 S. Main to Texas-based Hines last fall.
They argue that because of the theater’s eligibility for listing on the National Register of Historic Places and the city’s expenditure of funds on razing or rehabilitating it, state code required officials to assess and disclose potential negative effects of their plans to the State Historic Preservation Office.
They also want to halt demolition of the deteriorated neoclassical theater, at least until their latest case is decided.
Co-plaintiffs with the theater backers’ group are Salt Lake City residents Casey McDonough and Michael Patton, as well as Ibrahim Fall, owner of Twist Roots, and Derek Bleazard, owner of Beckett & Robb. The two shop owners rented space in properties adjacent to the theater but had their leases terminated by Hines and forced to relocate.
In reviewing the restraining order request, Faust questioned whether the plaintiffs had legal standing to sue the city and called elements of their legal arguments “weak” and unlikely to prevail in a trial. The judge and attorneys for the RDA and Hines also raised questions regarding the timing of the site’s historic registry eligibility as well as arguments that the city had devoted funds to the project in its deal with Hines.
The RDA transferred ownership of the property, which the city bought in 2010, to Hines last fall for zero dollars, in exchange for including rent-subsidized apartments in the new 400-unit tower, creating a pocket park nearby, and salvaging and reusing portions of the theater.
As per its exchange with the city, Hines is pursuing plans to build a 31-story luxury tower dubbed 150 Main Street Apartments at that spot.
Katherine Nichols, lawyer for the RDA, said the exchange did not constitute a city contribution to the project. “What we got back had real financial value,” she told Faust. “It was different in kind, but that doesn’t mean it was funding.”
Meanwhile, the judge said, Salt Lake City had done nothing incorrect or improper in reviewing permit applications from a Hines subcontractor for permits to raze the century-old theater and several adjoining buildings.
The city, Faust said, was being targeted for merely performing a governmental function, when the plaintiffs had “the main focus and intent to restrict and tie the hands of the landowner, who hasn’t been made a party to the suit.”
“If you want to restrain somebody from doing something, you can’t do it through the back door in an inverse way,” Faust said of seeking a restraining order against the city.
Bruce Baird, attorney representing Hines, said omitting the developer from the lawsuit had been “a bad-faith tactical” move by the plaintiffs to avoid having to secure a legally required bond to cover potential financial losses by Hines over any delay of their skyscraper.
“This is a $200 million project,” Baird of the skyscraper project, estimating Hines’ possible damages from delays at “$100,000 a day.”
“There’s not a chance in heck they can raise the amount of money for any delay here,” Baird told the judge.
McDonough said after Faust’s ruling, he had “no doubt” that Friends of Utah Pantages Cinematic Theatre would refile the request to legally block the demolition permits, which remain pending at City Hall.
“We continue to believe we have the strongest case,” McDonough said, “and that the RDA, working with Hines, purposely avoided Utah state code to make this rotten deal happen.”