Parties: Alexis Butler and Millcreek City

Issued: July 7, 2025

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Exactions on Development

The City may not impose conditions of approval to dedicate additional right of way and to install curb, gutter, and sidewalk under a deferral agreement, because the City has failed to present evidence that Property Owner’s proposal to construct a single-family dwelling on a lot where the prior use was also a single-family dwelling creates new impacts warranting additional dedication. Under the constitutional rough proportionality test, the development proposal does not create a new problem that the City’s imposed exactions will solve. The exactions therefore fail the rough proportionality test and are unlawful.

Issue

May the city require right of way dedication and deferred construction of certain roadway improvements as a condition of approval for a building permit to construct a single-family dwelling on a lot on which a single-family dwelling already existed? 

Summary of Advisory Opinion

The City may not impose conditions of approval to dedicate additional right of way and to install curb, gutter, and sidewalk under a deferral agreement, because the City has failed to present evidence that Ms. Butler’s proposal to construct a single-family dwelling on a lot where the prior use was also a single-family dwelling creates new impacts warranting additional dedication. Under the constitutional rough proportionality test, the development proposal does not create a new problem that the City’s imposed exactions will solve. The exactions therefore fail the rough proportionality test and are unlawful. 

Evidence

The Ombudsman’s Office reviewed the following relevant documents and information prior to completing this Advisory Opinion:

1. Request for Advisory Opinion, submitted by Alexis Butler, Trustee - AA Trust, on May 14, 2024.
2. Letter from John Brems, on behalf of Millcreek City, dated March 11, 2025.
3. Letter from Alexis Butler, dated March 17, 2025.
4. Emails from Alexis Butler, dated March 17 and March 22, 2025.
5. Email from John Brems, on behalf of Millcreek City, dated April 24, 2025.
6. Letter from Alexis Butler, submitted April 30, 2025. 

Background

Alexis Butler is the trustee of AA Trust, which owns a corner property located at 3793 South Millcreek Road (the Property) in Millcreek City (the City). The Property is situated within the City’s R-1-8 zoning district.

On October 28, 2022, Ms. Butler submitted a building permit application to the City. The original scope of work was to tear down an existing single-family home on the lot to its foundation and rebuild a new home on that foundation. However, upon discovering the 1900-era foundation had no footings, the project required the complete removal of the old foundation. Even with the foundation removed, the plan was to keep the structure within the same footprint. This plan, however, had to be modified slightly to accommodate fire code requirements related to building separation. Specifically, the City required the new structure's location to be moved three feet to the south so it would not be too close to an existing detached garage.

The proposed replacement home includes an enlarged garage, a new second story with an additional bedroom and office, two more bathrooms, and a "dog room". Ms. Butler indicates that these additions increase the new structure’s footprint area by 117 feet over the prior structure’s footprint. The City states that while the structure’s footprint won’t change much, the overall square footage of the structure will increase by approximately 1,600 square feet.

The Property fronts both Millcreek Road and Millcreek Canyon Road. The City's Transportation Master Plan designates Millcreek Canyon Road as a minor collector requiring a 66-foot width. The existing road does not meet this standard. Consequently,  and as a condition for issuing the building permit, the City, citing Millcreek City Code sections 15.28.010, 15.28.050, and 19.76.210, is requiring Ms. Butler to dedicate a portion of her property for street widening to achieve the City’s 66-foot wide standard for a minor collector and to enter into a proposed deferral agreement to install curb, gutter, and sidewalk along the Property’s frontage at a later date when the road is eventually widened and improved by the City (Ms. Butler is not being required to improve the road surface, only to dedicate the land necessary for the widened road and provide curb, gutter and sidewalk once widened by the City). Ms. Butler indicates the land dedication amounts to over 3,000 square feet of her property.

Ms. Butler objects to the required land dedication and required improvements without compensation, asserting that the property's use remains a single-family dwelling and the reconstruction does not create a greater impact on public infrastructure. The City, on the other hand, contends the dedication is a lawful development exaction, legal under its police powers and necessary for public safety and welfare. Moreover, the City argues the requirement is roughly proportionate to the impact of the proposed structure and is therefore a lawful development exaction.

In light of this disagreement, Ms. Butler has requested an advisory opinion from the Ombudsman’s Office to determine whether the City may lawfully require the land dedication and deferred  improvements.

Analysis

I.     The City’s Conditions of Approval Must Satisfy the Rough Proportionality Test

The City’s requirements to dedicate land and provide curb, gutter, and sidewalk through a deferral agreement as conditions of approving a building permit are development exactions.

“A development exaction is a government-mandated contribution of property imposed as a condition of approving a developer’s project.” B.A.M. Development, LLC v. Salt Lake County (“B.A.M. III”), 2012 UT 26 ¶ 16. Under applicable state and federal law, local governments may require dedication of property for public facilities, such as roads and associated facilities, provided the dedication address only the impacts created by proposed new development. An “exaction must alleviate the burdens imposed on infrastructure by the development.” Id. (emphasis added).

Moreover, any contribution of money or property mandated to obtain development approval is an exaction, regardless of whether the requirement is imposed by an administrative approval process, or through a legislative enactment. See generally, Sheetz v. Cnty. of El Dorado, 601 U.S. 267 (2024) (explaining that the essential question is not whether the government action at issue is legislative or administrative, but whether the government has “physically taken property for itself or someone else”); see also B.A.M. Development, LLC v. Salt Lake County (B.A.M. I), 2006 UT 2, ¶ 46.

When a local government  requires a landowner to dedicate land for a public purpose as a condition of some land use approval, the local government has the burden of proving that the requirement satisfies a constitutional “rough proportionality” test. See Dolan v. City of Tigard, 512 U.S. 374, 391 (1994) (stating that the government “must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development”). This rough proportionality test is articulated in state statute as follows:

(1) A municipality may impose an exaction or exactions on development proposed in a land use application…if:

(a) an essential link exists between a legitimate governmental interest and each exaction; and

(b) each exaction is roughly proportionate, both in nature and extent, to the impact of the proposed development.

Utah Code § 10-9a-508(1).

The first part of the test requires an “essential nexus” or close connection, between the required exaction and a legitimate land use interest or purpose. Thus, “if a proposed development will substantially increase traffic congestion, the government may condition [development approval] on the owner’s willingness to deed over the land needed to widen a public road,” because addressing traffic congestion is a legitimate land use interest and widening the newly congested road is closely connected with alleviating the congestion the proposed development will create. Sheetz, 601 U.S. at 274.

The second part of the test requires rough proportionality or “equivalence” and has two aspects. The first aspect requires that “the exaction and the impact must be related in nature; second, they must be related in extent. B.A.M. Development, LLC v. Salt Lake County (“B.A.M. II”), 2008 UT 74 at ¶ 9.

The nature aspect focuses on the relationship between the exaction and the proposed development’s impact on public infrastructure. The Utah Supreme Court explained that this relationship should be expressed in terms of a problem and a solution. “The impact is the problem, or the burden which the community will bear because of the development. The exaction should address the problem. If it does, then the nature component has been satisfied.” Id. at ¶ 10.

The extent aspect addresses relative costs. The Utah Supreme Court explained it this way:

The most appropriate measure [of the extent aspect] is cost—specifically the cost of the exaction and the impact to the developer and the municipality, respectively. The impact of the development can be measured as the cost to the municipality of assuaging the impact. Likewise, the exaction can be measured as the value of the land to be dedicated by the developer at the time of the exaction.

Id. at ¶ 11. Thus, if the costs are roughly equivalent, the extent aspect of the analysis is satisfied.

For an exaction to qualify as a lawful exaction, it must satisfy every part of the rough proportionality test. If it fails any component of the test, the exaction is unlawful, and the local government may not impose the requirement.

II.     The City’s Conditions Fail the Rough Proportionality Test Because the Applicant’s Development Proposal Does Not Create Greater Impacts on City Infrastructure that Would Constitute a Problem in Need of a Solution

In this case, while the City’s requirement to dedicate land and install curb gutter and sidewalk satisfy the “essential nexus” portion of the test because the City is in pursuit of a legitimate land use purpose (providing road improvements to development), the requirements nonetheless fail the nature aspect of the rough proportionality test because the requirements fail to solve a problem the development will create. Therefore, it would be unlawful for the City to impose the requirements as a development exaction.

As stated above, the nature aspect of the test requires that the conditions imposed by the City must solve a problem, or new impact, created by the proposed development. Here, the City contends that Ms. Butler’s proposal is a “substantial addition” to the property and that the required improvements are immediately adjacent to the property and are intended to serve the property. Moreover, the City asserts that its requirements constitute a “logical approach” based on “the need for a practical, straight-forward standard” to apply to building permit approvals. The City points out that if “everyone in Millcreek improves the local roadway adjacent to their property when they make substantial improvements to their property, Millcreek would have better roadways, storm water containment, and safe walking routes.”

While the City’s reasoning is sound in the context of new development that changes the use of the land and impose new impacts on the city’s services and infrastructure, the analysis in this case is different. Here, the City has not presented any evidence, beyond the mere assertion that the proposal is a “substantial addition,” that Ms. Butler’s proposed residence will create new impacts above those of the prior and existing use of the property. On the contrary, Ms. Butler’s proposal only replaces the existing impacts of the prior dwelling.

The City places significant focus on the overall size of the new dwelling to support its position that it may impose additional exactions, but this focus is misplaced. The question is whether the development proposal creates new impacts on the City’s services and infrastructure. The analysis appropriately and primarily focuses on the use and on the intensity of that use. At least in the residential context, raw square footage numbers do not convey much about intensity and impacts.

Here, the owner is not proposing a "more intense" use of the property—such as going from a single-family dwelling to a multi-family dwelling. Regarding road infrastructure, specifically, there is no evidence to suggest that Ms. Butler’s proposal creates greater impacts than what has already existed. It is difficult to see how replacing a single-family home with another single-family home—even one that is 1,600 square feet larger—creates new impacts sufficient to warrant imposing additional exactions that address a single-family use. The use as a single-family dwelling remains the same and the impacts are comparable. Just because the family occupying the home may have more space to live in doesn’t mean that the home’s impacts on services and infrastructure are greater.

If a single-family home already exists on the lot, then it is presumed that the local government addressed the impacts on municipal services of that use when the original single-family home was constructed. Requiring additional exactions for an already established use would constitute an inappropriate and unlawful "second bite at the apple."

To summarize, increasing the size of the garage and adding a second story with a few additional rooms to what will remain a single-family use does not measurably increase the impacts the use will have on the City’s road services and infrastructure. Accordingly, Ms. Butler’s development proposal does not create a new problem in need of a solution, and the City’s conditions fail the rough proportionality test. Therefore, the City may not lawfully require these exactions.

III.     The City May Still Condition the Applicant’s Development Proposal to Restrict any Development Activity within the Area Needed for the Future Road under Transportation Corridor Preservation Powers if it Pays for the Acquisition

As discussed, the City’s argument, stated very generally, asserts that requiring the road improvements it needs at the time a person seeks development approval is both logical and would allow the City to have better roadways, storm water containment, and safe walking routes. As explained above, to the extent that such development activity creates new impacts, imposing a  development exaction is lawful to achieve these ends, but only to the extent that it satisfies the rough proportionality standard.

When a city lacks authority to impose an exaction, as in this case, Utah law still allows a mechanism for a local government to effectively plan for future road infrastructure in a way that balances that need with an owner’s property rights. Utah’s Transportation Corridor Preservation Act, Utah Code § 72-5-401 et seq., allows a local government, under certain circumstances, to restrict proposed development activity within any area of the developing property where the local government has previously designated the area for a future roadway in an officially adopted map.

Here, the City’s Transportation Master Plan designates Millcreek Canyon Road as a minor collector requiring a 66-foot width. The entirety of the depicted 66-foot corridor goes beyond the existing road use to include portions of Ms. Butler’s property currently put to private use. To effectively allow the City to plan for its transportation needs to have better roadways, as it has highlighted, the City’s adoption of an official map “provides a basis for restricting development in designated rights-of-way or between designated setbacks to allow the government authorities time to purchase or otherwise reserve the land.” Id. § 72-5-401(3)(b).

If Ms. Butler’s proposed development will obstruct or occupy any portion her land identified in the 66-foot future corridor, the City may restrict or limit development within the corridor according to its official map—but only where it is willing to acquire the rights necessary for corridor preservation by purchasing and compensating the owner. Under the Corridor Preservation Statute, if a private property owner whose property’s development is limited or restricted by the official map petitions the local government to acquire the necessary property interest to preserve its plan, and the government chooses not to, the government may not thereafter “enforce” the map by limiting or restricting the affected property’s development. Id. § 72-5-405(3).

To summarize, even in situations where the impact of proposed development activity lacks an essential nexus and/or rough proportionality to a local government’s desired future road infrastructure, the City may nevertheless condition the approval on its acquisition of the necessary property interests for future transportation corridor needs as long as it is prepared to pay for the acquired interests at the time that development activity is being proposed. However, if it is unwilling or unable to compensate for the interests, it may not limit or restrict the owner’s proposal. 

Conclusion

The City may not impose conditions of approval requiring the dedication of additional right of way and to install curb, gutter, and sidewalk under a deferral agreement, because the City has failed to present evidence that Ms. Butler’s proposal to construct a single-family dwelling on a lot where the prior use was also a single-family dwelling of creates new impacts. Under the constitutional rough proportionality test, the development proposal does not create a problem that the City’s imposed exactions will solve. The imposed exactions therefore fail the rough proportionality test.

Accordingly, the City may not require dedication of land and installation of improvements as a development exaction, but it could still condition the development approval upon its purchase of the right of way for the value of the land and improvements taken.

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Jordan S. Cullimore, Lead Attorney

Office of the Property Rights Ombudsman

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NOTE:

This is an advisory opinion as defined in § 13-43-205 of the Utah Code. It does not constitute legal advice and is not to be construed as reflecting the opinions or policy of the State of Utah or the Department of Commerce. The opinions expressed are arrived at based on a summary review of the factual situation involved in this specific matter and may or may not reflect the opinion that might be expressed in another matter where the facts and circumstances are different or where the relevant law may have changed.

While the author is an attorney and has prepared this opinion in light of his understanding of the relevant law, he does not represent anyone involved in this matter. Anyone with an interest in these issues who must protect that interest should seek the advice of his or her own legal counsel and not rely on this document as a definitive statement of how to protect or advance his interest.

An advisory opinion issued by the Office of the Property Rights Ombudsman is not binding on any party to a dispute involving land use law. If the same issue that is the subject of an advisory opinion is listed as a cause of action in litigation, and that cause of action is litigated on the same facts and circumstances and is resolved consistent with the advisory opinion, the substantially prevailing party on that cause of action may collect reasonable attorney fees and court costs pertaining to the development of that cause of action from the date of the delivery of the advisory opinion to the date of the court’s resolution. Additionally, a civil penalty may also be available if the court finds that the opposing party—if either a land use applicant or a government entity—knowingly and intentionally violated the law governing that cause of action.

Evidence of a review by the Office of the Property Rights Ombudsman and the opinions, writings, findings, and determinations of the Office of the Property Rights Ombudsman are not admissible as evidence in a judicial action, except in small claims court, a judicial review of arbitration, or in determining costs and legal fees as explained above.

The Advisory Opinion process is an alternative dispute resolution process. Advisory Opinions are intended to assist parties to resolve disputes and avoid litigation. All of the statutory procedures in place for Advisory Opinions, as well as the internal policies of the Office of the Property Rights Ombudsman, are designed to maximize the opportunity to resolve disputes in a friendly and mutually beneficial manner. The Advisory Opinion attorney fees and civil penalty provisions, found in § 13-43-206 of the Utah Code, are also designed to encourage dispute resolution. By statute they are awarded in very narrow circumstances, and even if those circumstances are met, the judge maintains discretion regarding whether to award them.