Can development exactions consider costs to other government entities? B.A.M. Development v. Salt Lake County Explained

The Utah Supreme Court’s decision in B.A.M. Development v. Salt Lake County clarifies an important aspect of the rough-proportionality analysis required under the landmark U.S. Supreme Court decision in Dolan v. City of Tigard. The case addresses whether courts must limit their analysis to costs borne solely by the government entity imposing a development exaction, or whether they may consider broader governmental costs.

Background and Facts: B.A.M. Development sought a permit to develop a fifteen-acre residential project adjacent to State Highway 171. Salt Lake County’s highway dedication ordinance required developers to dedicate additional street width to conform with county road-width standards. After initially approving B.A.M.’s 40-foot dedication, the County later required an additional 13 feet based on updated recommendations from the Wasatch Front Regional Council and the Utah Department of Transportation. B.A.M. challenged this additional exaction as an unconstitutional taking.

Key Legal Issues: The central question was whether the rough-proportionality analysis under Dolan should consider only costs directly borne by Salt Lake County, or whether it could include costs to state and federal entities involved in highway improvements. B.A.M. argued for a narrow interpretation limiting costs to the County alone, while the County sought to include broader governmental costs related to highway widening projects.

Court’s Analysis and Holding: The Utah Supreme Court affirmed the trial court’s broader approach. The Court emphasized that its prior decision in B.A.M. II deliberately used the phrase “impact on the community” rather than costs solely to the County. The Court explained that the essential nexus test from Nollan requires connecting the government’s purpose with the scope of costs considered. Because the County’s purpose was to alleviate traffic impacts on a state-owned highway, costs to UDOT and federal funding sources were properly included in the analysis.

Practice Implications: This decision significantly affects how practitioners approach development exaction challenges. When local governments impose exactions related to infrastructure owned or maintained by other government entities, the cost calculation may include expenses borne by state, federal, or other local governments. This broader cost calculation generally favors the government in Takings Clause challenges, making it more difficult for developers to prove that exactions violate the rough-proportionality standard.