October 24, 2017
Several real estate developers sued the City of West Jordan alleging the City violated the Utah Impact Fees Act by failing to spend fees collected from the developers on specified categories of expenditures within six years. The developers sought to have misspent or unspent fees refunded because the violation either constituted an unconstitutional taking or created entitlement to a refund under a claim in equity.
The court considered the threshold question of whether the developers had standing to bring the claims in the first place. The court concluded that the developers only had standing to challenge the constitutionality of the fee the City initially assessed, which the developers failed to do within the statutorily allotted one-year period after initial payment of the fee.
The court further held that the developers did not possess standing to the extent they sought a refund of fees in equity for the asserted injury related to illegally misspent or unspent fees. The court concluded that the city was authorized by the Impact Fees Act to assess impact fees to offset expected costs of development in certain areas, and that the developers were not injured as long as the initial assessment of the fees survived a takings challenge. Once the fees had been assessed, the developers no longer possessed an interest in ensuring the fees were spent in accordance with state law. The court determined that the only expectation the developers could reasonably have for paying the constitutionally levied impact fees was approval for their development, which they received. Any ongoing interest in how the fees were spent belonged to the existing lot owners, which were homeowners and residents of the city.