Opponents of the proposed Seven Peaks housing project have won a small victory.
The Attorney General's Office has decided that Provo officials improperly changed a land-use plan in 1995 to allow development on the hillside golf course.Assistant attorney general Brian Farr said in a June 12 memo that officials did not satisfy state public-hearing requirements when the city's general plan was amended for low- and medium-density housing units, making changes to the current plan invalid.
Farr's opinion may give credence to the threat of a class-action lawsuit against the city in the event zoning laws are changed to allow a 300-unit housing complex on the nine-hole course.
Developers Brent and Scott McQuarrie are now waiting for a decision, which has been postponed several times. The City Council is scheduled to consider rezoning the land Tuesday night.
Addressing both protesting residents and the City Council, Farr said "the change was merely an item on the consent calendar. That is not sufficient to satisfy the statutory requirement of a public hearing."
Farr said the council should have called for public comment at the time of the vote, citing a 1986 court ruling against West Jordan in a similar case regarding public hearings.
The council, however, does not have to heed Farr's advice, which was spurred by complaints by a group called Concerned Families of Provo.
State law does not require cities to adhere strictly to the general plan. Provo attorneys also argue the discrepancy was rectified by amendments to the plan when the location of the ice arenas at Seven Peaks and a proposed ballpark were debated in 1996 and during an overhaul of the entire plan in 1997.
Concerned Families of Provo whipped up a strong corp of supporters, produced an 1,100-name petition and voiced concern that city officials improperly sold the land for less than fair-market value, illegally tweaked zoning ordinances in the general plan and are hesitant to reclaim the land for public use.
The McQuarries bought the 117-acres four years ago at a state auction. A plan to build some 430 homes has been scaled down several times to appease city officials and protesters.
Some residents believe the land, once owned by the Utah State Hospital, was intended to remain free from development even though it's now private property.
Provo received the property from the state in 1978 to sell at a low price to Wilderness Associates, a firm that intended to build a ski resort in the mountains overlooking the city.
Officials apparently did not attempt to negotiate a top price for the land but decided the greatest benefit to the city could be obtained by selling the property at a lower price and attracting resort hotels, conference centers and office complexes.
Farr said compensation for the land was adequate if the city was trying to offer an incentive for investing in the community. It appears, he said, that the city sold the property for a song.
"If the purchase price was the only benefit to the city, then the consideration may well not have been adequate," he said. "However, it seems apparent . . . the city also intended to get a ski resort, a recreation center and a golf course, with all the recreational, economic development and financial benefits that such developments would bring to the city. When these other promised benefits are taken into account the consideration may not be inadequate."
A "reversion" clause in the agreement, however, called for the land to be returned for public use should the resort not be built. Farr wrote in the memo that city officials stated that "even if the development didn't go through, they were adequately protected because the zoning would allow the property to only be used in the way they had bargained."
Plans for the resort fizzled, and the property changed hands several more times.
The state insurance commission seized the property from an insurance company that didn't have cash or assets to pay off claims. The state put the land up for sale apparently unaware of any reversion clause. The McQuarries bought it in 1994 without any liens or restrictions.
McQuarrie is asking that half of it be zoned for single-family homes, with the remainder split between eight-plexes, six-plexes and twin homes.
The 51-acre project will total about seven units per acre compared to 12 units an acre on a neighboring development. They say they've spent some $4 million on the project already.
Farr advises city officials to look back to the 1995 general plan, which requires the land to be used for a public facility. A Salt Lake law firm told then-Mayor James Ferguson in a 1978 letter that a court could rule against the city if it tried to enforce the revision clause but could not say so with absolute certainty.
"The opinion suggests that the reason the reversion clause was not included in the deed may have been to accommodate the developers in securing financing for the project from financial institutions," Farr wrote. "Lenders were apparently, and understandably, unwilling to accept the property as collateral with the reversion clause in place."
But even if the city has no enforceable rights under the reversion clause, Farr wrote, the law firm's opinion concludes that it does "at least appear that the city has preserved as right to insist on appropriate use of the property by virtue of its zoning ordinances."
Farr said the city has no obligation to change its zoning for the McQuarries, no matter how much money has been spent.
"The fact that the developers have expended funds to try to get the zone changed does not, of itself, obligate the city to approve the zone change. It is a business risk," he wrote.
"Though our office is not familiar with all of the facts in the current matter, it appears that the City Council can continue to use zoning to protect the public benefit that they bargained for if they so choose, at least to the degree that the interest is protected by the public-facilities zone."