Five Reasons Development Agreements Can Be Good for Your Community

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And why you don’t need to wash your hands afterwards.

The idea of a developer trading business investment for favorable regulation sounds like something a communist would say about the dark side of capitalism. 

But while development agreements may sound like something schemed-up on a golf course as conspiracy against the public good, municipalities—and the people who live within their borders—can have much to gain from them.

What’s A Development Agreement?

Generally speaking, a development agreement is a contract between a local government and a property owner or their designated agent (i.e. private developer) who owns or controls property within the jurisdiction. The agreement details the obligations of both parties and specifies the standards and conditions that will govern the development of the property. It assures all parties involved that the development regulations pertaining to the project will not change during the term of the agreement. While local governments may require conditions to mitigate project impacts, they also can be used to clarify existing regulations and requirements, phasing and timing of public improvements, and more.

Owners and developers like development agreements because they provide regulatory and political assurances and infrastructure coordination that make projects more viable. They also make it possible for both sides to be flexible and make concessions for the benefit of the project and surrounding community with mutually agreed-upon assurances and enforcement provisions they both can rely on.

So, What’s All The Fuss About?

In Utah, municipalities have a lot of flexibility when using and crafting development agreements. Terms of development agreements can even carve-out exceptions for the developer from a municipality’s existing land use requirements, zoning ordinances, or development standards. Understandably, this can raise concerns among residents such as: “What’s the point of having land use laws if developers don’t have to follow them?”

Another potential downside to development agreements is that the municipality is legally bound by the agreement and could be held liable for damages if it does not follow through on its end of the deal. This liability can impose a burden on future taxpayers, as can fulfilling the terms of the agreement, which can require the municipality to do anything from performing inspections to issuing bonds to upgrade facilities.

How Development Agreements Can Help Your Community

Development agreements aren’t all trouble. Here are five reasons why:

  1. They are allowed by state law. §10-9a-102 of Utah State Code grants municipalities the ability to enact all ordinances, resolutions, and rules as well as the ability to enter into other forms of land use controls and development agreements that the municipality considers necessary or appropriate for the use and development of land within its jurisdiction. This includes, among other things, development agreements. One reason why is because this power gives municipalities a way to balance the pursuit of the general welfare with landowners’ private property interests and associated statutory and constitutional protections.
  2. They are 100% public documents. The actual negotiations between a municipality and developer may not always be in a public forum, but it’s hard to be shady when the legally-binding document is adopted during a public meeting and subject to GRAMA requests. 
  3. They require adoption through the public legislative process when they include provisions that modify local ordinances. All development agreements involving terms that contradict or differ from a municipality’s existing/adopted land use, zoning, or development regulations must be adopted in the same way as new land use regulations/ordinances. This means members of the public can voice their concerns in a public hearing, that the Planning Commission will have to make an official recommendation to the City Council regarding the development agreement, and that the City Council will ultimately have to vote to approve the agreement into law. 
  4. They give the municipality predictability. This helps with budgeting tax revenue/expenditures and resource commitments for things like staffing and natural resources required of a large-scale development project.
  5. Most importantly, they bring in outside investment. Developers are more likely to invest in your community and through large-scale projects when they can negotiate favorable development and building conditions. More development can lead to increased home values and more jobs in the area. Residents can also be benefitted by the tax revenue the development brings in the coming years.

If Attendance Has Tripled Since Your Last Public Meeting…

Then you might need some professional advice to figure out if the new development proposal is a good fit for your community (and how to get the public on your side).

Call Rural Community Consultants today to get expert planning and ordinance advice to make your community the best it can be. 

Want To Learn More?

Check out our online training modules! Note: We are able to provide access to specific training modules free of charge, courtesy of the Utah Office of the Property Rights Ombudsman.

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