Two property developers have filed a lawsuit against Herriman, alleging the city violated their constitutional rights when developing a plan to assess 35 property owners to pay for a $12 million pipeline and pump to transport water to the city's undeveloped west mountain area.
The Malibu Investment Co. and the Laguna Investment Co. this week filed the lawsuit in 3rd District Court, asking a judge for a temporary restraining order and a preliminary injunction, which would stop the city from pursuing fees from property owners for the water pump if the judge approves the request.
The companies claim Herriman violated their due process rights under the 14th Amendment and Utah's State Annexation Act with how it formed Special Service Area #2 (SAA), a portion of the city that will be served by the new pipeline.
Rosecrest Communities, a developer, has agreed to pay up to $5 million for a 6 million-gallon water tank to be installed above the Mountain View Corridor.
In 2004, Rosecrest owned by the James L. Sorenson family contacted the plaintiffs in the lawsuit and invited them to participate in the annexation of land from Bluffdale into Herriman, with Rosecrest agreeing to bear the cost of the process, according to the lawsuit.
Rosecrest spent "substantial time" with the city before the annexation and was possibly "given or promised valuable incentives from the city" to disconnect from Bluffdale and annex 4,000 acres into Herriman, the lawsuit says.
Since the annexation, Rosecrest has donated a "considerable amount of real estate to the city," some of which has been planned for or is being used for parks, ponds, Herriman's Town Center, a recreation center and a proposed shooting gun range, the lawsuit states.
The lawsuit claims Herriman had a conflict of interest with Rosecrest on business dealings related to the water pipeline because of the city's prior history with Rosecrest.
The developers allege Herriman's assistant city manager and community development director, Gordon M. Haight II, who was hired in 2007, is a nephew to James L. Sorenson and worked for some of Sorenson's companies, the lawsuit states. Rosecrest has used its influence with the city to get deals to go through, including its relationship with Haight, "who has a glaring conflict of interest," the lawsuit states.
The plaintiffs allege the city overassessed them by nearly $1 million to pay their share for the SAA #2, while Rosecrest unfairly benefited from the plan. Other property owners were also assessed for property that could never be built on because of a city ordinance that prohibits development on property with more than a 30 percent grade, the lawsuit states.
In October, a public hearing was held in Herriman, where property owners weighed in on a proposal for them to pay $5,000 per developable acre to contribute to the water project. A month later, the Herriman City Council approved the assessment plan for the project. The city has offered owners a financing opportunity of a 20-year loan with interest to help them pay their shares. The city will bond to put in the water system and use property owners' land as collateral for the bond, meaning if owners don't pay their assessment cost, they will lose their property.
Attorneys for Herriman declined to comment on the lawsuit, citing pending litigation. The case has been assigned to Judge Paul Maughan.