After Holladay voters torpedoed a high-density development on the old Cottonwood Mall site last year, a new luxury proposal is beginning to advance through the city’s approval process.

It is billed as a top-of-the line commercial and residential development that may include some very expensive housing — such as $2.5 million penthouse condos that would be only 2,500 square feet in size.

That latest proposal, now called Holladay Hills, seeks to abide by old-but-still-existing terms approved by city leaders back in 2007 for a proposal that was abandoned when that developer went bankrupt. The new proposal has lower density, smaller buildings farther from streets and more open space than the last controversial plan.

So far, the new effort pleases at least one leader who led the charge against the defeated high-density plan — and has Holladay’s mayor predicting this proposal will finally reach the finish line after others fizzled.

“We would support a project that fits within the existing entitlements,” said Paul Baker, one of the founders of Unite for Holladay, the group that led the ballot challenge. “We knew what was coming in 2007, and it was pretty well accepted.” Voters blocked later changes attempted by the City Council.

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While Baker says it is too early to formally endorse the new proposal, he said members of his group have met several times with the new developer and generally like the direction of the project.

Holladay Mayor Rob Dahle said the new proposal “certainly has gotten off on a different footing than the last application because it has applied to stay under the current property entitlements. ... This probably is a plan that is going to be much more acceptable to the general public.”

Last year, voters killed a proposal by Ivory Homes and Woodbury Corp. for a massive housing, office tower and retail development on the mall site near 4800 S. Highland Drive — including a 775-unit high-rise apartment complex and 210 single-family homes on 57 acres. Afterward, Ivory Homes abandoned the effort, but Woodbury Corp. decided to regroup and try again.

The new proposal calls for 614 residential units and up to 750,000 square feet of shops, restaurants and office space, and potentially a hotel and theater. The new developer is Holladay Hills LLC, a partnership involving Woodbury Corp., Millrock Capital and KBS Commercial Advisors.

“Our vision for this property is to create a high quality, best of class project,” Millrock developer Steve Peterson said at a public hearing before the Holladay Planning Commission this week.

He said Holladay Hills is willing to live within the 2007 entitlements, and maybe less. For example, he is looking at building 715,000 square feet of residential development, fewer than the allowed 775,000. The tallest proposed building would be 80 feet high, or lower than the 90-foot maximum allowed in 2007 (and much lower than the 136-foot-high tower originally proposed by Ivory).

Peterson said he is willing to discuss with Holladay residents raising building heights a bit to provide more open space.

By living within the existing rules, the developer would avoid any votes by the City Council on new zoning requirements — which the Utah Supreme Court ruled amounts to new laws that can be challenged by voter initiative, which happened last year.

Still, the city planning commission must sign off on overall conceptual plans, preliminary drawings for each phase, and final plans — each in separate steps — to ensure they follow the earlier entitlements.

The planning commission this week approved the conceptual drawing for the whole project and preliminary drawings for an early phase. Peterson said it will now move to more detailed preliminary drawings.

(Photo courtesy of Holladayhills.com) This conceptual drawing received the approval of the Holladay city planning commission in July 2019, an early step toward gaining approval to develop the old Cottonwood Mall site.

“There is overwhelming interest in this site,” Peterson said. For example, he said one potential tenant wants to repurpose the old Macy’s building and perhaps build an adjacent hotel. He said he could be back soon with preliminary drawings for that phase if deals are reached.

“There’s a lot of people who want to live here,” he added, but warned “it’s not going to be cheap.”

He predicted a 2,500-square-foot penthouse condo will cost $2.5 million, for example.

“But it’s going to be best of class,” he said. “In our community, if people want to downsize, where do we go? This is an option to have a small place, and a quality place.”

But resident Peter Monson wasn’t so sure about that in the public hearing.

“Who in Holladay has $2.5 million to downsize?” he asked amid laughter. “Holladay is getting younger. Holladay is growing. And a lot of us who are younger can’t afford $2.5 million to downsize because we can’t afford the prices of homes in Holladay already.”

He urged more affordable housing. “Where is the type of help to those types of residents who cannot afford luxury condos?”

Others expressed lingering concerns over traffic and the amount of green space — but Peterson pledged to continue to work with the community.

The developer said the project may also bring some much-needed tax revenue to Holladay. He noted that when the city incorporated, studies said the mall area was important to its financial viability.

“And for the last 10 years, we have lost out on the revenue stream that was projected,” he said as a variety of proposals fizzled. The developer expects to complete the project within five to 10 years, in different phases, if the city gives final approval.

Dahle, the mayor, said, “Most people are tired of the weed field and want to see something done. ... I am very optimistic that this one will finally get to the finish line.”