Plan to dredge Utah Lake islands appears dead as developer dissolves business

A plan to dredge Utah’s largest freshwater lake and build islands with the spoils appears officially scrapped.

Lake Restoration Solutions LLC, a politically connected company that would have made a real estate project out of Utah Lake, voluntarily withdrew a lawsuit Tuesday it had filed challenging a Department of Natural Resources decision that blocked the development. Although the company left the door open to bring charges again, that appears unlikely — it also filed notice that it has dissolved its business.

The move leaves no viable developer willing to pursue a controversial public-private partnership Utah lawmakers once championed.

“We are relieved that the dissolution occurred before permanent damage to the lake was done,” Conserve Utah Valley, a nonprofit that raises awareness about threats to the area’s natural resources, said in a statement. “However, this underscores the importance of greater protections for the Lake.”

The division of state lands said they remain committed to protecting sovereign lands like the Utah lakebed for future generations.

“We are disappointed,” director and state forester Jamie Barnes said in a statement, “that Lake Restoration Solutions chose not to proceed in obtaining a final decision on this important issue.”

The dredging idea first became public in 2017 when Lake Restoration Solutions, LLC offered to deepen Utah Lake by 7 feet and build islands with the dredged muck — along with homes for up to 500,000 residents on top of them — in exchange for privatizing 16,000 acres of the lakebed.

The company claimed, without much proof, that its project would solve the lake’s immense water quality and environmental problems.

The following year, Utah lawmakers approved the Utah Lake Restoration Act, which would have sold the state’s lakebed trust lands to developers in exchange for cleaning it up. Toxic algal blooms, invasive species and pollution have long plagued the lake’s waters.

The legislation was sponsored by Sen. Mike McKell, R-Spanish Fork, and then-senator Diedre Henderson, who was elected as lieutenant governor in 2020.

But the Utah Department of Natural Resources and the Division of Forestry, Fire and State Lands determined in October that Lake Restoration Solutions’ proposal ran counter to the state’s interests. They also found it violated the state’s duty to manage the lakebed in the public trust, for the benefit of all Utahns, as required by law.

The would-be developers then hit the state agencies with their lawsuit in January, calling their decision “a misguided and legally incorrect understanding” of the public trust doctrine. They further claimed the agencies had violated the will of state lawmakers.

A judge with Provo’s 4th District Court dismissed some of the company’s claims on June 2.

On Tuesday, Lake Restoration Solutions notified the Provo court it was dropping its lawsuit. It asked the suit be dismissed “without prejudice,” which would mean the charges could be filed again.

The same day, company COO Jonathan Benson notified a judge in Salt Lake County’s 3rd District Court that Lake Restoration Solutions had dissolved.

“Utah Lake continues to face significant challenges and is in dire need of restoration,” Benson said in an emailed statement. “Unfortunately, Lake Restoration Solutions no longer has the financial resources to continue its effort to restore and enhance Utah Lake. Our team will now cheer from the sidelines for Utah Lake and hope that others will continue the important work of implementing the best restoration solutions for Utah Lake.”

The company is entangled in two different courts due to its case against the state, in Provo, and a separate defamation case brought against ecology professor Ben Abbott, in Salt Lake County.

Abbott countersued, claiming the developers are trying to silence legitimate criticism about the project and prevent him from participating in the public process. A judge tossed out the defamation case against Abbott in January and ordered Lake Restoration Solutions to pay his attorney fees. With the company dissolving, he is doubtful he will see those funds and it is unclear what will happen with his counterclaim.

“Is there going to be any accountability?” the Brigham Young University professor said in an interview. “Because we haven’t seen it so far. We’ve seen this same group come back again and again to the trough of public funding.”

Fake islands, actual fallout

Lake Restoration Solutions CEO Ryan Benson is affiliated with hunting groups that received millions in public funds for anti-wolf and sage grouse lobbying. In 2020, he was part of an effort to block disclosure of how those public dollars were spent.

Benson also has ties to Don Peay, who has also founded hunting special interest groups and worked on the same campaigns. The conservative activist has received $1 million from Utah lawmakers this year to lobby for forest thinning on federal lands with a questionable tree felling process involving a cable strung between two bulldozers. Peay claimed cutting down trees frees up “liquid gold” water and boosts streamflows, but the evidence is anecdotal at best. He pocketed state money for it anyway.

Other lawmakers have since run with the idea and claim forest thinning will save the Great Salt Lake, a notion that has been debunked by scientists.

Abbott said it all reflects a pattern of lawmakers backing dubious ideas without conducting due diligence and letting the public bear the burden while the private sector enjoys the windfall.

“This isn’t a time to let down our guard about this specific project,” Abbott said of the defunct Utah Lake artificial islands project. “But it’s more a time to reflect on, how did we get here?”

American Fork Mayor Brad Frost said he is doubtful the sunk islands idea will ever get revived.

“The public is wildly against this whole thing,” Frost said. “I told lawmakers to close the door on it.”

Frost has opposed the dredging project due to it spoiling the lake’s viewshed, the impacts of adding half a million people to Utah Valley and its implications for the state’s sovereign land.

“The property of that lakebed,” he said, “belongs to every resident of Utah.”

Lake Restoration Solutions had raised millions from private investors for the project, which it estimated would have a final price tag of more than $6 billion. The city of Vineyard pledged $5 million for the project. The developers pursued more than $1 billion in state and federal funds as well.

Vineyard never ratified anything with Lake Restoration Solutions, Mayor Julie Fullmer said in an emailed statement.

“Additionally,” the mayor wrote, “no presentations for planning ever moved past a state and federal level so we have little to remark on.”

Representatives with Sandy-based Prospera Growth, one of the private investors in the project, were not immediately available for comment. Draper-based Foresight Wealth Management, a second private Utah investor, does not have a working website or phone number. The Securities and Exchange Commission settled fraud charges with the company in February.

McKell, who sponsored the 2018 Utah Lake Restoration Act, also did not respond to a request for comment. A spokesperson for Henderson said she didn’t have anything to add.

Gov. Spencer Cox’s office emphasized the need to find solutions for the lake’s ongoing environmental woes.

“There is a lot of momentum to improve Utah Lake since it provides critical water storage, recreation opportunities, wildlife habitat and other public benefits,” a spokesperson for the governor said. “It’s important we continue working collaboratively with all those who care about the lake.”