Lake Restoration Solutions, the company proposing to spend billions to dredge Utah Lake and create some 18,000 acres of man-made islands, announced its dissolution Tuesday.

That marks the end, at least for now, of the ambitious project that Lake Restoration Solutions says would have helped remediate the lake’s environmental issues, but activists and academics feared could result in irreparable harm to the ecosystem.

In a letter addressed to 3rd District Judge Laura Scott, company president Jon Benson said Lake Restoration Solutions does not have the financial resources to continue operations or satisfy its debt obligations, and that the company could not “secure any new funding sources to remedy the financial shortfall.”

In the letter, Benson says the company can no longer proceed with the case against Ben Abbott, an associate professor of aquatic ecology at Brigham Young University, who was sued by Lake Restoration Solutions in 2022 over allegations that he defamed the company on his Twitter and Facebook accounts, during public meetings and on his own personal blog.

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“Lake Restoration Solutions, LLC no longer exists as a functioning entity and cannot continue its participation in the aforementioned case,” Benson wrote.

Lake Restoration Solutions also sued the Utah Division of Forestry, Fire and State Lands in January after it rejected a permit application for the project, citing “constitutional issues.”

That case was also withdrawn Tuesday after Lake Restoration Solutions filed a notice for voluntary dismissal in Utah’s 4th District Court.

In a statement, Benson told the Deseret News he still plans to “cheer from the sidelines for Utah Lake and hope that others will continue the important work of implementing the best restoration solutions.”

“We are so grateful for the tremendous support for the Utah Lake Restoration Project from Utahns all over the state. Utah Lake continues to face significant challenges and is in dire need of restoration. Unfortunately, Lake Restoration Solutions no longer has the financial resources to continue its effort to restore and enhance Utah Lake,” Benson said.

The company did file the motion to dismiss “without prejudice,” meaning it is possible to revive the suit in the future. However, Benson on Wednesday said the dissolution marked the end of Lake Restoration Solutions.

It would have been one of the largest environmental remediation projects of its kind in the world, had an estimated $6.5 billion-plus price tag and was slated to take 15 years to complete.

By dredging Utah Lake, the company intended to lower it on average by seven feet in an attempt to cool water temperatures. The dredged material would also sequester nutrients to curb algae growth, which has plagued the lake for years and made it unsafe to swim in.

The application detailed plans to build at least four roads, 34 human-made islands amounting to roughly 18,000 acres, 190 miles of new shoreline and LEED-certified communities.

But it garnered intense pushback from environmental groups who feared 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 was really a way for developers to make money under the guise of environmental remediation.

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“Thank goodness this happened before they started destroying Utah Lake,” Abbott said on Wednesday. “Imagine if they sent this document to the people of Utah after creating a 20,000-acre mess on the lake.”

Abbott called the news a “huge victory” for the lake and Utah.

“But it’s also a moment where we need to ask some questions — How did they get so close? Why was there so much support from the legislature and governor’s office for a project that was unserious?” he said.

Utah Gov. Spencer Cox says the project never had his “full-throated endorsement,” but he did entertain the idea, telling reporters in 2022 “we have to look at everything, every opportunity.”

Conserve Utah Valley, one of the groups staunchly opposed to Lake Restoration Solutions, echoed Abbott’s sentiment, telling the Deseret News in an email “We now need to ensure that nothing like this occurs again.”

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“This underscores the importance of greater protections for the lake. LRS got awfully close to obtaining almost 16,000 acres of sovereign lands for its private real-estate development. Thankfully, (the Division of Forestry, Fire and State Lands) rightfully canceled the permit application pursuant to its public trust obligations,” the statement reads.

In 2018, the legislature passed Utah Lake Amendments, or HB272, which authorizes the Division of Forestry, Fire and State Lands, which has oversight over the lakebed, to dispose of the lakebed as compensation for the comprehensive restoration of Utah Lake if certain conditions are met.

That opened the door for Lake Restoration Solution’s proposal. And the door is still open, Abbott said, for a similar project in the future.

“I don’t think this is the end of this kind of sweetheart deal and boondoggle project,” he said. “... That pathway for giving away state lands is still there. So we clearly need to restore protections for Utah Lake.”

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