Fall

Spring

Land Development and Ethics

Research and Findings on Big Land
Development and its Ethicality.
By Lincoln T. Eggertz

Business 1040

08
15

INTRODUCTION.
What is one thing that no one on this earth can create, buy, build
or grow more of? As far as we are aware of, what other solar systems
contain planets within the vast galaxy that provides an environment
suitable to the one we require in order to live? Im sure you already
know what Im getting at here. The answer is land. Land is something
that I believe we all have a tendency to take for granted. Its easy for
us to get so caught up in the craziness of day-to-day life that we can
forget to stop and take a minute to appreciate exactly what we have in
regards to our environment. As our population continues to grow, along
with out ability to live longer lives, our birth rate will likely continue to
outpace our mortality rate. This means more and more people will
need places to live. As our society grows it will continually require more
use of one of the very few things that we simply cant get any more of,
which is land. As citizens of our planet, it is our duty to stay involved in
the use and development of land so that we can ensure a livable future
for our children and theirs.

I chose the topic of land development initially due to a current

development located just down the street from my childhood home. As
of today, the City of Cottonwood Heights has approved the
development, which has been named Giverny. So far, Giverny has
received a lot of push back and criticism from the citizens of the

surrounding neighborhoods. The problem I saw, was that regardless of

the citizens concerns, the project was being pushed through with no
compromise. To me this seemed unfair, and triggered my interest as to
whether or not money was the unspoken sole driving force of this type
of development. And as I began my research I realized that land
development was a much bigger topic than I had anticipated.

It became apparent that I could not simply write a strong paper about
one, local, planned urban development. I needed to educate myself on
the general process of land development, ,which is what the first
section of my findings will cover. The second section of my research,
discusses the money involved with land development. Once I
understood the process, it lead to my hypothesis that money was the
driving factor when it came to unethical behavior by builders,
landowners, developers and government officials. Finally, I wanted to
detail some large local development projects that are currently in the
planning phases, and introduce some of the individuals that are
involved with these developments, along with the role local
government plays in the decisions of what does and does not get
approval. Finally, ending with my conclusions and resolutions.

FINDINGS.
The Process.

To start my research, I needed to get a strong foundation of

knowledge on what the basic process is regarding land development.
With such a broad topic, there was a lot of information out there for me
to digest. I started with the public municipal code for the City of
Cottonwood Heights. I tried to focus in on the most pertinent
information within the zoning code regarding what was required to
develop a piece of land. The beginning phases typically go as follows,

Developers or landowners identify pieces of land for potential

development
Generally, they then acquire a license or permit from the city to
develop whatever it has initially planned.
Once a permit or license has been granted or approved, land
grading and the building process begin

Between the first and second steps, a lot take place.

First, a plan or idea has to be in place, this could range from a

shed in a field to a ten-story multi-tower business complex.

Depending on the idea, studies, surveys and maps sometimes
referred to as Development of Regional Impact all need to be
taken and completed prior even starting plans for the
development. The bigger the idea is, the more complex the
planning will be. The studies can range from soil composition and
fault line location, to economic resources required for the
development such as emergency services accessibility, garbage

and waste removal, water, power, sewage requirements, and

impact on the surrounding area regarding traffic, environmental
impact, etc.

Needless to say, I could write a novel and still not cover every detail of
what land development entails. My goal here is to provide an example
of the depth and breadth of this process. So rather than putting you to
sleep with a dreary essay on the process of land development, it was
necessary to zero in on what I believe brings ethicality into the
equation of land development. Money.

Without the millions and billions of dollars involved in the development

and sale of our land, and an exception to the environmental impact it
poses to the planet, land development is probably pretty boring to the
broader audiences of society. Money, and unethical behavior, typically
tend to intrigue media sources and their audiences. And money plays a
huge part in land development.

Follow the money.

During my research, I had the opportunity to sit down with Mr. Glen E.
Goins, one of the Senior Planners for the City of Cottonwood Heights to
talk about land development. He was very welcoming and gladly sat
down with me for over an hour to talk about current local development

projects along with future plans for the city of Cottonwood Heights. I
was especially impressed with Mr. Goins, not only because he was so
willing to speak with enthusiasm to a guy that just strolled into his
office on a weekday afternoon, but that I had caught him as he was
walking out to take a lunch break, which he finally got to an hour and a
half later.

As we talked, he covered many current studies and projects that were

underway, along with what he seemed to be most excited about, which
was future planning. One of the things that Mr. Goins referenced
throughout our conversation was tax dollars. To cities across the
nation, tax dollars are extremely important.

My research has made if clear to me that cities are in constant

competition for business and corporate tax dollars. Ill try to keep the
list short but a few examples of tax money governments receive from
businesses would be sales tax, property tax, vendor tax, business
licensing fees, corporate franchise tax, and so on. As you can see,
there are many incentives for governments to essentially compete with
each other with the hopes of businesses choosing to operate within
their governmental boundaries. The point here is that the more people
who live within a city and the more money those citizens, or citizens
from neighboring cities and counties, choose to spend within that city,

the more money the local government is able to collect through

property tax, sales tax, etc.

The Builders and Developers.

The next group directly involved and in position to profit from land
development are the builders and developers. Candlelight Homes
(DAI), Ivory Homes, and Cadence Homes are a few examples of land
developers within the state of Utah. One of the things I had the hardest
time finding were financial statements for commercial and residential
development companies. Most of these companies are privately held
and therefore are not required to make financial statements available
to the public. I was hoping to provide some numbers on what profit
margins are like for these companies but specifics are very hard to
locate. The following are generalized income statement and balance
sheet information I was able to find online. The data reflects numbers
from single-family homebuilders across the nation, which was provided
at the request of NAHB (National Association of Home Builders)

Builders average gross profit margin in 2012 (17.4%) was

higher than in 2010 (15.3%) and 2008 (14.4%), but was still
lower than in 2006 (20.8%). Meanwhile, builders average
net profit margin jumped to 4.9% in 2012, about 10 times
higher than in 2010 (0.5%) and a definite improvement over
the loss in 2008 (-3.0%), but still lower than in 2006 (7.7%).
(http://eyeonhousing.org/2014/02/what-has-happened-tobuilders-profit-levels/)

Balance sheet information:

As far as their balance sheets, builders reported average

2012 total assets of $8.9 million, $5.7 million in liabilities
(63.6% of all assets), and $3.2 million in equity (36.4%).
Only 7% of their assets were held in cash, while 67% was
held as construction work in progress. Current liabilities
represented about 20% of assets. After being cut in half
between 2006 and 2010, builders balance sheets saw some
improvement in 2012. Their average total assets fell from
$13.0 million in 2006, to $6.2 million in 2010, but bounced
back to $8.9 million in 2012 (same level as 2008). Similarly,
average equity recovered to $3.2 million in 2012, higher
than in 2008 ($2.8 million) and 2010 ($2.0 million), but not
quite where it was in 2006 ($3.4 million).
(http://eyeonhousing.org/2014/02/what-has-happened-tobuilders-profit-levels/)

Builders who choose to share financial information provide these

statements and numbers to NAHB. In essence, land development is big
business. The profit margins on the amount of money involved can,
does, and most likely will continue to provide motivation for the
rationalization of fraudulent, unethical behavior.

Examples of Land Development and Ethics in the Press

The next topic I wanted to touch on deals with the news getters, the
media stories that shed light on land development and questionable
ethics. What I hope to do here is tie together the fact that all big land
development involves government. Our government, in its idealistic
form, is a voice for the people. And the peoples voice is our vote. In
8

order for us to be involved in the development of our land, we need to

be involved in grassroots politics. Grassroots politics are your
everyday, local, town official, and small community type of politics.

Currently, a few large development projects underway throughout the

valley are the relocation and development of the land where the prison
sits, the proposed development of the Cottonwood Canyons (Mountain
Accord), and the North-West Quadrant. Each of these is a very large
project so I want only to show brief findings on some of the ethical
issues that have already been raised in regards to them, starting with
the move of the prison and development of the southwest corner of
Salt Lake City.

Relocating the Utah State Prison. What follows is a small piece

from an article written on City Weeklys Daily Feed in 2013:
AbillpassedfavorablyoutofcommitteeWednesdaytocreateaspecialboardto
considertheeconomicworthofrelocatingtheUtahStatePrisoninDraperand
developingthelandunderneathit.ThebillwouldallowSenatePresident
WayneNiederhauser,RSandy,toassignthreesenatememberstothatgroup,
whichraisesethicalconcerns,consideringthatNiederhauseroperatesaholding
companythatownsmorethan30acresofundevelopedpropertyneartheprison
thatcouldincreaseconsiderablyinvalueiftheboarddecidestomovetheprison.
E.S.Pearson
(http://www.cityweekly.net/TheDailyFeed/archives/2013/02/28/senatepres
couldprofitfromprisonrelocation)
I believe this is a great example of the kinds of things that happen
frequently and unbeknownst to the public regarding land development.

Just like any other big business that lobbies for their cause, land
development is closely tied to politics through investments,
partnerships, and other business realtionships. It is important to know
if anyone involved in the approval processes of development stands to
gain from any proposed local development.

The article goes on to state that Senate President Niederhauser

claimed that by the time the prison was moved and plans for
development were in place, his property holdings in the area would be
developed and sold. A second small quote from the article I wanted to
fit in here is from Buzz Welch, director of the masters program of real
estate development at the University of Utah:
Anyonewithtwoeyesinfrontoftheirfacecouldunderstandthatforthelast25
years,thatsabsolutelybeenthewronguseforthatproperty,Welchsaysofthe
prison.Welchsaysthemarkethasalreadydecidedthatrelocationand
redevelopmentshouldhappen,butsaysthatthepublicperceptionofinsider
dealingcouldsidetracktheproject.B.Welch
(http://www.cityweekly.net/TheDailyFeed/archives/2013/02/28/senatepres
couldprofitfromprisonrelocation).
I wanted to add this only because part of my discovery while
researching this paper is that it is unrealistic to hope the development
of land will simply stop for the sake of preserving what land we have
left. But if we can be involved and stay thoughtful and conservative
with decisions in the future, we can hopefully keep a good portion of
the natural world in tact for future generations.

10

Mountain Accord. Another important local development currently in

the planning stages is the Mountain Accord, which deals specifically
with the development of the Cottonwood Canyons. Mountain Accord is
essentially a group of government entities, environmental and
conservation groups, ski resorts and members of the outdoor industry
whove formed together in order to provide long term and hopefully
finite development and conservation plans for the canyons. It is
estimated that by 2050, Utahs population will grow from the current
2.9 million residents to almost double at 5.4 million, along with annual
visits to the canyon increasing from 5.7 million to 7.4 million by 2040.
To me this should be an important issue that any citizen who is
concerned with the development of the Cottonwood Canyons can get
involved in and follow. There is a lot of press regarding Mountain
Accord and money; here is a quote from a recent City Weekly article:
To help float the Mountain Accord's financial needs, the
Legislature in its recent session handed Mountain Accord $3
million$2 million shy of what Senate President Wayne
Niederhauser, R-Sandy, asked for. Niederhauser also sits on
Mountain Accord's executive board. (C. Frazier, City Weekly
Mountain of Money).
Its clear from the quote that Senate Pres. Niederhauser is still in office
and very involved with land development. I also want to mention Peter
Metcalf, CEO of Black Diamond Equipment, and long time active
conservationist who continues to work for the conservation of our
canyons. It is individuals like Metcalf who continue to fight the endless

11

numbers of ideas for development that are brought forth looking to

simply capitalize on the pristine and unique Wasatch Front. It is
estimated that Mountain Accord will cost taxpayers 23.1 million over
the next three years. Frazier goes on in the article to say:
These figures have only recently begun to draw scrutiny from
those who are attempting to follow along and participate in the
Mountain Accord process. The most visible of these critics is Pat
Shea, a local attorney and University of Utah professor who is a
former director of the Bureau of Land Management. Shea says
the Mountain Accord process, and the future of the project, is
being polluted by money.
"What you're seeing is what the consultants believe will be the
best way to sustain their consultancy, as opposed to what's the
best process and the most sustainable result for the Wasatch,"
Shea says. "When you allow professional consultants to say, 'This
is how the process should be run,' they will run it that way, and
they will be sensitive to the political and economic needs of the
people who will then be renewing their contracts." (C. Frazier,
http://www.cityweekly.net/utah/mountain-of-money/Content?
oid=2762342)
I believe Pat Sheas quote provides a great example of how capitalism
can work against the best interests of our environment. When
businesses are involved, profit motive typically outweighs any other
factor of the projects they are involved in. Which also highlights the
importance of individuals like Peter Metcalf and Pat Shea who have the
voice to stand against the sometimes seemingly careless drive of
business of development in the name of capitalism and profit.

The last proposed development I wanted to touch on is the North West

Quadrant. The Northwest Quadrant is a large swath of land that ranges
12

west of the airport to the Oquirrh Mountains. The land, originally owned
by the LDS Church (more specifically one of its property development
arms, Property Reserve Inc.) was transferred to Kennecott in 2011 for
an unspecified number of acres in southwestern Salt Lake County. As of
2011 there were no current development plans according to Kennecott,
but prior to that there were talks of anywhere from 70,000 to 100,000
homes being built on the marshlands, essentially creating a mini-city,
similar to DayBreak. Environmental leaders hoped to see solar panel
fields instead but as of now, no one really knows what could happen
with the coveted property.

These are a few of the last large pieces of land located in the Salt Lake
Valley that are currently undeveloped. The amount of revenue
development could generate for the city and anyone involved in the
process is immeasurable. And undoubtedly there are many politicians
and developers that would love to see the land zoned to allow
development that provides for the largest profits and tax revenue
generation possible. Lets hope that there are enough individuals
involved who oppose those views to help find a balance of sustainable,
green development, and incorporation and preservation of the natural
environment.

CONCLUSIONS.

13

The first conclusion I have reached regarding the research Ive

done is that development is going to continue. Our population is going
to continue to grow and therefore more and more people will need
places to live.

Secondly, the politicians we elect to represent us have a large say in

what does and what does not happen when it comes to the large-scale
development of land. If as citizens, we are concerned about the
development decisions that others will make about our limited supply
of land for future use, we need look closely at whom we choose to put
into office, and once there, hold them accountable for decisions they
make. This is not easy, as it takes time and commitment from citizens.
Citizens who, not to get too off of topic, have a harder and harder time
finding the ability to give attention to much outside of making ends
meet. Given the increasing income gaps between the wealthy and
poor, and stagnant growth of wages in our country. Regardless, it is
crucial we are involved in the process somehow. If not, it leaves room
for questionable ethics by those in power.

The process of land development is a large, complicated process with

many players involved. Fraud and unethical behavior will always be a
factor. But not everyone involved is simply out to profit and walk away
with no further concern for the environment. There are many

14

developers, planners and builders out there who want to get things
right the first time, so that development can provide housing for the
population and also be considerate to the environment.

We still have time. There is still time in the Salt Lake Valley to ensure
that certain important areas under consideration for development are
done so in a way that compromises between preservation and the best
economic use of the land.

RESOLUTIONS.
My first resolution based off of my findings and conclusions is an idea
for active involvement by the communities. Before I started this paper,
I was very unaware and out of touch regarding any plans for
development within my community. If there were some sort of national
awareness group that could be formed, organizing small groups of
citizens in local communities whos responsibility was to stay involved
with local government regarding development proposals and zoning
restriction amendments. Who would then organize and distribute this
information to the community, it could create more involvement and
awareness. This would also allow any opposition a chance to say
something before zoning changes are made and plans are set in
motion.

15

Secondly, put some watchdogs in place to oversee political

involvement with land development. And then holding politicians
accountable for any decisions made which are then linked to personal
gain or disregard to the best interest of the environment and
community.

I also feel it is important to recognize and promote those who put the
environment and best interest of the community first. Usually, the only
ones who get attention from the media are the ones that have made
unethical choices and attempted to profit from their positions as
politicians, builders and developers. Once its reached the papers,
most of the damage has been done. It will take commitment and
diligence, but in order to make changes and get in front of the
incessant drive of commercialized development we need to be
involved.

Its a difficult task to find balance between leaving things the way they
are, and allowing for increases in population. The larger problem I see
is the capitalization by corporations of commercialized development
with complete disregard to the environment and the communities they
choose to exploit. In order for us to conserve the land we have left, it
will take involvement and action by all of us, members of the
communities we live in, to make sure that we can preserve and make

16

the best use of what little land we have left and allow for housing and
community for our growing population.

Sources
Frazier, C. (2015). Mountain of Money. CityWeekly.net Retrieved from:
http://www.cityweekly.net/utah/mountain-of-money/Content?
oid=2762342

17

Frazier, C. (2015). Slippery Slopes. CityWeekly.net. Retrieved from:

http://www.cityweekly.net/utah/slippery-slopes/Content?
oid=2709936
Quint, R. (2014). EyeOnHousing.org. Retrieved from:
http://eyeonhousing.org/2014/02/what-has-happened-to-buildersprofit-levels/
City of Cottonwood Heights Municipal Code, Title 19Zoning. Date
Accessed: April 13, 2015. Retrieved from:
http://cottonwoodheights.utah.gov/code.main.html
Glen E. Goins, Senior Planner, City of Cottonwood Heights.
Jensen, D. (2011) LDS Church transfers Northwest Qudrant to
Kennecott. Retrieved from:
http://www.sltrib.com/sltrib/politics/52567975-90/kennecottdevelopment-church-lake.html.csp
Biele, K. (2010) LDS Church and SLC Development. Retrieved from:
http://www.cityweekly.net/utah/lds-church-and-slcdevelopment/Content?oid=2144174
Peterson, E. (2013) Senate Pres. Could Profit from Prison Relocation.
Retrieved from:
http://www.cityweekly.net/TheDailyFeed/archives/2013/02/28/sen
ate-pres-could-profit-from-prison-relocation

18