Posted by: Patricia Salkin | January 24, 2020

UT Appeals Court Holds Municipalities May Not Contract Around Public Hearing Requirements Found in Statute or Ordinance

This post was authored by Matthew Loeser, Esq.

LB Moab Land Company LLC, a real estate development firm, planned to build a large mixed-use development project known as Lionsback Resort on land located just east of Moab, Utah and owned by the Utah School and Institutional Trust Lands Administration (“SITLA”). Developer proposed certain modifications to the project’s site plan, but those modifications were publicly opposed by a group of local citizens. Aware of both the opposition, and that Developer had threatened litigation if the newly-modified Project was not approved, the City of Moab entered into a contract with SITLA and Developer, pursuant to which the City agreed to classify the proposed modifications “minor” rather than “major.” Under the applicable municipal ordinances, this change in classification would allow the proposed modifications to be approved without a public hearing. The Moab City Council adopted a resolution, without holding a public hearing, authorizing the City’s mayor to execute the contract. The opposing citizens sued the City, and sought an order enjoining the project from proceeding until a public hearing was held on the proposed modifications. The district court dismissed citizens’ lawsuit on summary judgment, and the citizens appealed.

Here, since the City already determined, by its own internal review, that Developer’s proposed modifications were major changes under the Moab Municipal Code, the court held those modifications could not be approved without a public hearing. Then, rather than formally reversing its decision, the City agreed to deem the changes “minor” as part of the ZSA, and included that provision in a larger, wider-ranging agreement that invoked broader questions of municipal policy. The court found that by passing the resolution without a public hearing, and adopting a contract that altered the public hearing requirements set forth in city ordinances, the City violated not only LUDMA but also its own municipal code. While the City’s power to contract was broad, the court held that this power did not extend that far. Accordingly, the court reversed the district court’s entry of summary judgment, and remanded the case.

Wallingford v Moab City and Moab City Council, 2020 UT App 12 (UT App. 1/24/2020)

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