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KSL TV, File

Cottonwood Mall site developer says referendum against project is illegal

By Jasen Lee, KSL | Posted - Jun. 29, 2018 at 7:08 a.m.

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HOLLADAY — The fight for the development of the old Cottonwood Mall site took a legal turn Thursday.

Attorneys for Ivory Development announced that they sent a cease-and-desist letter to two groups that oppose the 57-acre, high-density housing development, claiming the groups have broken laws in their campaign against the project.

The lawyers also filed claims with the Utah Lt. Governor's Office alleging the groups have failed to properly register with the state's elections office.

The groups are collecting signatures for a referendum that would put the project up for a vote.

In a letter dated June 28, attorney Alan Sullivan with the law firm Snell & Wilmer accuses the groups Unite for Holladay and We Love Holladay of making "false representations" about the proposed project; failing to register and disclose financial information about their political interest committees, which they claim have raised thousands of dollars; and unlawfully gathering signatures for the petition campaign outside of polling locations.

He said the entities have disseminated false information about the development through news media, direct interactions with voters, social media and websites. The misrepresentations include exaggerating the number of people the project is projected to house, the size of the apartment block being proposed, the way tax increment financing credits would be utilized in the project and minimizing the financial benefit the development is projected to have on local tax revenue, the letter says.

"We hope that on an ongoing basis they will stop making these misrepresentations and play on a fair playing field," Sullivan said.

"While you have the right to campaign on any issue you wish, you may not use these misrepresentations to gain more signatures for a referendum petition," Sullivan wrote in the letter. "Further, your misrepresentations may cause damages which would result in legal claims against you individually or as a group."

The Ivory Homes and Woodbury Corp. proposal, approved by the Holladay City Council last month, calls for a multiuse city center on the former site of the defunct Cottonwood Mall.

The development plans include 775 apartments, with a maximum height of 90 feet, or seven stories. The plan also includes up to 210 total residential units, including 79 single-family homes, 22 units of brownstone-style homes, 39 units described as "Creekside Manor" homes, and up to 40 retail shops and restaurants.

Brett Stohlton, one of the organizers of Unite for Holladay, said the development would create an uncharacteristically dense community.

“These developers are using legal threats to stop our grass-roots effort because they know ultimately the taxpayers of Holladay don’t want this project," Stohlton said. "Our goal is to gather enough signatures to ensure all Holladay residents have a substantial voice in the process."

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The groups need to collect the required 5,874 valid signatures by a July 12 deadline. The signature requirement represents the minimum 35 percent share of the people who voted in the last presidential election.

Sullivan and colleague Wade Budge argued Thursday that the groups have no legal basis on which to call for a voter referendum because the City Council's vote to approve the proposed project was administrative — conducted without making any adjustments to existing city ordinances regarding land development. Changes to existing laws would be considered legislative, therefore subject to a potential referendum, Budge explained.

"If the City Council had changed the zoning laws, that would be 'referable,'" Sullivan said. "If the City Council approves a site plan whose purpose is to comply with the existing zoning laws, that's not referable."

He added that since no legislative action was taken on the proposed plan, the council's decision is therefore ineligible for a petition referendum under state law.

However, Holladay City Attorney Todd Godfrey said the groups are still obligated to collect the required signatures before finding out if their referendum call is valid or not. The city would then conduct a preliminary review of the referendum request.

"We'll make that final determination if and when they present sufficient signatures," Godfrey said. "But on its face, the actions look to us to be administrative."

If the council's decision is considered administrative and not legislative, then the request would be rejected, he said. But the groups could still be able to appeal to the Utah Supreme Court on an emergency writ if they chose to pursue the case further, he added.

Meanwhile, the lawyers for Ivory Development said they would like to resolve these issues in a reasonable manner, as long as the groups are willing to act in good faith.

"Our clients are going to go forward with the project," Sullivan said. "We don't believe a referendum is going to be an impediment. The questions they're trying to have a referendum on are not subject to the referendum power."

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