Wohali is a luxury golf resort with homes, rentals and its own private backcountry. It’s under construction west of Coalville, but before it was approved in 2021, disagreement over the project nearly split the town of 1,500 in half.
Now, the controversy is back after the mayor signed off on the developer's proposal to put nightly rentals up for sale.
Some councilmembers saw the change as significant and believe the issue should have been decided by a vote of the full council, not by Mayor Mark Marsh alone.
Nightly rentals for sale
Wohali’s development agreement with Coalville allows 125 single family homes and 303 nightly rentals. The resort came under fire earlier this year when the Coalville City Council found out it was marketing the nightly rentals as permanent residences.
Wohali added a disclaimer to its rental units, which says, “Resort cottages are available only for members of the Wohali Resort. There are other restrictions on use, as detailed in the governing and resort plan documents.”
The developer still hoped to still sell the rental units while prohibiting long-term stays, so it asked for permission to sell the nightly rentals similarly to condominium units.
Under Utah law, condo owners don’t own the land beneath their unit; they own the interior space.
“The idea with a condominium is you owned the airspace—you didn't own any land—you owned the airspace,” attorney Craig Smith explained at a recent Coalville City Council meeting.
Wohali asked to sell its nightly rentals to owners who could then get a cut of the rental fees. Wohali would continue to own the building and land, and the unit owners would not be allowed to live there long term.
Utah law also says that cities must approve changes to development agreements if they meet the rules set out in relevant city codes. Marsh announced he had approved the change at the council's regular July 8 meeting.
Major and minor amendments
The controversy became: does a change in how nightly rentals are owned create new residential units, on top of the 125 Wohali is allowed?
“Those homes used up all the density, and all their ability to sell a residential unit,” Councilmember Lynn Wood told KPCW.
And Wohali can’t have additional density unless the city council votes “yes.” That’s what the development agreement requires for so-called major amendments, but not minor ones.
"A major amendment is one that increases density," Coalville City Attorney Sheldon Smith said, "and a minor is one that does not."
Wood and Councilmember Louise Willoughby view the change as an increase in density that should have been put to a vote.
Other councilmembers weren’t as sure, but they shared Wood and Willoughby’s surprise at the mayor’s July 8 announcement, because they’d already been reviewing the change.
Wohali had been asking for the nightly rental amendment in conjunction with another item up for council approval: the next phase of resort construction.
But earlier this year, it separated the two items and went through the usual minor amendment process with the nightly rental sales.
The developer submitted proposed changes to City Planner Don Sargent, who sent it to City Attorney Smith, who then told the mayor it did not create new density.
Willoughby said she knew something was up when Wohali pulled the nightly rental amendment. She picked up a copy of Smith’s employee contract from the city offices July 7.
"I went and got a copy of the contract to look at what is it that we're dealing with here," she told KPCW, "because in my opinion, they are the gatekeepers to what goes on in our city."
Then when Marsh announced he signed the amendment a day later, she had a tense exchange with Smith that culminated in the attorney accusing Willoughby of trying to get both him and Sargent fired.
Willoughby refused to engage with Smith on the issue, saying it's improper to discuss personnel in a public meeting.
Marsh maintains his priority is to keep the city out of legal trouble, and Smith told him Wohali's request met the code.
Density debate
Wood and Willoughby formerly organized the community advocacy group Coalville for Responsible Development, which was opposed to Wohali’s initial plan for 500 residences.
The city council initially favored rezoning the land west of town for more density, but Coalville for Responsible Development gathered signatures to put the rezone on the ballot in 2020.
Then, Wohali pulled its plan and came back with 125 homes and 303 nightly rentals, which was allowed under base zoning. The Coalville City Council found it met city code.
Willoughby says that’s the same thing the developer did with the amendment to sell nightly rentals.
“When they pulled [the amendment] right as we were ready to make a motion,” she said, “it’s like, ‘Okay, your original application was done the same way.’”
She and Wood worry that selling the nightly rentals opens the door to increased density because condo owners can apply for primary residency. And new residents could change the character of rural Coalville.
"When it becomes primary, then they are the voters," Willoughby said. "If they become all the voters up there, they're bigger than we are."
Still, the amendment the mayor signed says no one, not even the unit’s owner, can live there for more than a month. One of the criteria for primary residency in Summit County is living in a home for six months or more per year.
Marsh contends multiple attorneys from the city and the developer have agreed the change is a minor amendment that did not require a vote.
Wood and Willoughby got a second opinion from Mason Kjar, an attorney who frequently works with Henefer. He says it’s a major amendment.
"Now, there are no new toilets; there is no increase in services," Kjar told the council July 22. "And so I understand why legal minds would differ on this. But that is my conclusion."
Closed session discussions
Wood and Willoughby called two closed sessions to discuss personnel: one on July 18 and another during the regular July 22 meeting.
At the second meeting, the council decided not to contest the mayor’s decision but unanimously voted for two changes to the amendment he signed.
The council also brought on Kjar to negotiate those changes with Wohali instead of City Attorney Smith.
One change would cap stays in the nightly rentals at 29 days, not 30; and the second ensures the city can levy the same transient room tax that visitors pay at hotels.
Wohali attorney Wade Budge said in a statement the issue has been “resolved to the satisfaction of all involved.”
“Wohali is pleased with the resolution and looks forward to continuing to work with the city for the mutual benefit of the project and community,” Budge added.
