Opposition mounting against Utah Lake project, developers say 'trust is gained over time'

SALT LAKE CITY — It would be one of the biggest projects of its kind in the country, maybe even the world.

At least four roads, 34 human-made islands amounting to 18,000 acres, 190 miles of new shoreline, LEED-certified communities and a $6.5 billion-plus price tag spanning 15 years. One company's plan to deepen Utah Lake and use the dredged material to create islands, all in an effort to combat toxic algal blooms and invasive species, is ambitious.

Simply put, "it's big," says Jon Benson, president of Lake Restoration Solutions. "The problem is big."

"We don't shy away from the fact that this is one of the biggest — not just dredging, but environmental remediation projects — in the world," he said.

But a bill that's gaining traction in the Utah Legislature could require the project to go through several extra steps before it becomes a reality.

And while some lawmakers appear hesitant to endorse the project, Lake Restoration Solutions is facing mounting opposition from the public and a handful of local municipalities.

The criticism is rooted in fears that the plan would upend current conservation projects on the lake, potentially fail and leave a financial mess for taxpayers to clean up, or that the proposal is really just a way for developers to make money under the guise of environmental remediation.

Utah Lake goes to Capitol Hill

On Tuesday, the Utah House Natural Resources, Agriculture, and Environmental Quality Committee gave a favorable recommendation to HB240, which would require more buy-in from lawmakers for the proposal to move forward — that's if the plan makes it through the two year National Environmental Policy Act, or NEPA, process.

The bill moved out of the committee after a 7-6 vote.

Likened to a "course correction" by several lawmakers and members of the public who spoke in support of the bill, it would amend the Utah Lake Restoration Act, which permits the Division of Forestry, Fire and State Lands to dispose of sections of lakebed if several environmental parameters are met.

The bill would require approval from a legislative committee and the governor's office before any land is handed over, essentially creating an avenue to delay or stop the project.

"The bill in its current form creates unintended consequences that are problematic," Benson said in an email after the meeting. "We intend to work with the legislature to resolve our concerns."

Another bill, sponsored by Rep. Brady Brammer, R-Pleasant Grove, would create a Utah Lake Authority that would act as the deciding body for environmental remediation efforts and development around the lake.

HB232 is slated to be heard at the House Political Subdivisions Committee.

Brammer has said the bill is not related to the Utah Lake Restoration Project. However, if both bills pass this session, it's unclear how the Utah Lake Authority would operate under the Utah Lake Amendments.

Utah County towns and residents push back

On Monday, over 500 people converged on the state Capitol in opposition to the Lake Restoration Solutions plan, holding up signs reading, "Don't pave Utah Lake."

The next day, American Fork passed a resolution opposed to the project, while Orem reviewed a similar resolution during the City Council's work session.

Then on Wednesday, Benson appeared before the Vineyard City Council and fielded several questions from skeptical residents and council members.

Speaking at the Capitol rally on Monday was Ben Abbott, associate professor of aquatic ecology at Brigham Young University. Abbott is a vocal critic of the proposal, and in January was sued by Lake Restoration Solutions for defamation.

"Instead of having an independent science board who can provide wholesome critiques, they only have hired scientists. We received some additional information since that time. Unfortunately, instead of sharing that information with us, they chose to sue me personally for bringing these concerns to the public," Abbott said to a loud chorus of boos.

If the lawsuit was a public relations move, "it would be a pretty terrible one," Benson said. But he maintains that the suit is not about the merits of the project, but rather statements Abbott made that "poisoned the public debate."

" ... This is too important to have falsehood be at the center of it all. We want to have the falsehoods corrected. And was the lawsuit the right move to do that? I don't know. We're trying to protect ourselves and protect the project and the integrity of the discussion," he said.

The lawsuit has galvanized the project's opposition, even catching the attention of some state legislators.

"We have an organization that is using litigation and lawsuits to silence its detractors. But yet we should just trust them. I'm not comfortable with that," said Rep. Casey Snider, R-Paradise, before voting yes on the Utah Lake Amendments bill.

Snider said that doesn't mean he'll never support the state disposing of the lakebed. He said he just wants to see more transparency and "checks and balances" in the process.

"The current model, the current system never allows that to happen," he said.

Benson told the Deseret News that the narrative has been skewed against the project from the start.

"I think trust is gained over time. We were introduced to the public by opponents of the projects as developers with bad intentions," he said.

What would the Utah Lake Restoration Project look like?

Lake Restoration Solutions submitted its application to the U.S. Army Corps of Engineers in December, and on Feb. 2 it was made public. It's entirely possible the plans will look completely different by the time the Corps is done reviewing. The Corps could scrap the proposal, too.

The company stressed the plans will also change as feedback from the public continues to pour in. But here are the basics, according to the application:

• The project would take about 15 years to complete — if everything goes as planned — and would be rolled out over five phases. Benson says each phase is designed to provide some level of remediation, so if only one phase is completed "there would still be significant environmental benefits and water quality benefits."
• The dredging would lower the lakebed on average by 7 feet, which is intended to cool water temperatures over time. The dredged material would sequester nutrients to curb algae growth. The material would then be stored in containment tubes that would act as the framework for an island.
• The 34 human-made islands would amount to roughly 18,000 acres. The company says about half would be for development, which would range from high-end homes to affordable housing.
• An estimated eight estuary islands and eight recreation islands would make up the remaining 9,000 acres.
• The islands would create about 190 miles of additional shoreline. The plans currently call for a number of roadways.
• Four of them appear to be thru-roads, transporting people from one side of the lake to the other, while a fifth would create a loop from the north to the south end of Vineyard. The company says the roadways would be a mix of causeways and bridges.

"There's going to be an enormous amount of information, data, studies, laboratory testing and field testing generated over the next few years, and it will ultimately provide everyone the best scientific basis for making their evaluation," said Rudy Bonaparte, the chairman for Geosyntect Consultants, the engineering firm that prepared the application.

The application has done little to quell the opposition. During the rally at the Capitol, Abbott said reviewing the documents with a team of scientists "raised more questions and concerns than it has answered."

"There is a lack of a specific plan for not only comprehensive restoration, but almost any restoration," Abbott said, arguing the lakebed is healthier than the company claims, and that a number of scientific studies that prove the lake is on an upward trend were omitted from the application.

Abbott also likened it to similar projects in Dubai — notably the Palm Jumeirah, which at one point was the world's largest human-made archipelago.

"The failed island projects suffocated coral reefs, caused algal blooms, and ended up tens of billions of dollars in debt," he said.

Who's footing the bill?

The majority of the project's finances are "sourced, backed and repaid as private capital," says Klair White, chief financial officer for Lake Restoration Solutions. Here's what we know:

• The majority of the funds will come from Citigroup and DA Davidson in debt securities. An estimated $5 billion will come from Citigroup, and $750 million from DA Davidson. The bond repayments will be made through "various revenue streams tied to the community islands," which the company says could include HOA fees or tax increments.
• A pending Environmental Protection Agency loan ranging from $770 million to $893 million. The loan is made possible by the Water Infrastructure Finance and Innovation Act, a federal credit program designed to spur water projects. White says the loan "will be repaid using revenues from the sale of a portion of the newly created land that is earmarked for conversion into community islands."
• The company says it will receive $25 million in private capital. Those funds have already been secured, White says, from a range of sources including investment firms like Prospera Investments and Foresight Wealth, nonprofits and philanthropists, and are covering the current costs of pre-construction, design and permitting.
• A $10 million loan from the state of Utah, which will act as a credit enhancement for the EPA loan. "This is not money that is intended to be spent, but rather will act as a form of credit enhancement to leverage the state's strong credit rating," White said.

Lake Restoration Solutions claims the only reason for the residential development is to pay for the cost of dredging.

"If there are any other ideas of how to pay for the project without some element of development, genuinely we are interested to receive those," White said.

"How to pay for the project has been the major barrier to the comprehensive cleanup of the lake for decades," she said, adding that the "community islands have the potential to bring significant socioeconomic benefits to the region, in the form of additional housing, recreation and commercial opportunity."

Correction: A previous version incorrectly stated the Utah House Natural Resources, Agriculture, and Environmental Quality Committee voted on HB240 on Wednesday, Feb. 9. The committee voted on Tuesday, Feb. 8. An earlier version also stated the bill passed with a 9-7 vote. The vote was 7-6.

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