PROVO — Orem's 20-year, $20 million redevelopment deal with University Mall and ZCMI will stand — at least for the time being.
Fourth District Judge Gary Stott refused Thursday morning to grant a motion filed by Price Development to declare the 1998 deal void and order funds from the agreement repaid to the city. Stott also refused Price's request to have the deal returned to the City Council to decide whether it meets guidelines handed down by the Utah Supreme Court last year.
"Proper analysis was not done before the decision was made by the City Council," argued Price Development attorney Michael Homer.
However, Stott said the Supreme Court's decision tells him more fact gathering needs to take place and the city needs an opportunity to prove that taxpayers will get fair value in return for financial incentives given to mall owners and ZCMI. He said putting evidence before a trier of fact, and not a summary judgment, is the proper way to make that determination.
"We'll give all parties the opportunity to show they either complied or they didn't," Stott said.
A trial in Price's lawsuit against the city, the mall and ZCMI could be several months away — possibly longer than a year.
Price's attorney, Michael Homer, argued the Supreme Court ruling requires the legislative record used to make such agreements include an independent analysis showing taxpayers will get fair value in return for each year of redevelopment deals. He said such a record can only be done at the legislative level where public comment and public scrutiny is allowed.
"That's not possible in the judicial forum," Homer said.
The city, by presenting evidence now before the court and not the City Council, that the deal is fair to taxpayers is "rationalizing a decision that has already been made." Justifying the deal with a hired expert "in the context of litigation is not the same thing" as presenting facts about the deal before a legislative body before a deal is approved, they argued.
Orem attorney Jody Burnett admitted the city did not include in the legislative record the independent analysis of year-by-year benefits of the agreement that the Supreme Court opinion requires.
"We accept that responsibility," Burnett said.
However, he said the higher court wanted that presented to the trial court, not the City Council, or it would have reversed the case instead of remanding it back to the trial court.
Burnett and attorneys for the mall and ZCMI asked Stott to consider the severe consequences of voiding the 2-year-old deal.
"You're talking about unraveling a complex transaction," Burnett said.
ZCMI said it would have to repay the city about $2 million.
"That would have very serious consequences," ZCMI attorney Jim Jardine said.
University Mall attorney Reid Lambert said development around the mall associated with the agreement shows the deal is productive and beneficial to taxpayers.
"Certainly we're seeing a lot of positive things as a result of this legislative action," Lambert said.
E-mail: jimr@desnews.com