The Utah Lieutenant Governor's Office has rejected the application for the proposed Town of Bear Canyon, ruling that the development plan failed to meet state requirements for land contiguity. The decision marks the second rejection for the proposed resort community, which sought to establish a new municipality near the Utah County border.
Bear Canyon Application Fails
The rejection follows a determination by the Utah Population Committee that a strip of land intended to connect two areas within the proposed town was too narrow to be considered contiguous. Layla Basic, an office administrator for the lieutenant governor's office, confirmed that the certification for Bear Canyon's request for a feasibility study was rescinded on July 16, 2026.
This marks the second failed attempt for the Bear Canyon project. The landowners, who intended to build a resort community featuring approximately 1,000 residential units, saw their first request for a feasibility study denied in February because the proposed boundaries included too many property owners. Because state law prohibits sponsors from modifying a feasibility study request more than once, the landowners cannot proceed with this specific application for the remainder of the year, though they may reapply in January 2027.
The Pilot Program Process
The Lieutenant Governor's Office noted that requests for preliminary municipalities that are unable to proceed due to statutory requirements do not count toward the state's annual limit of two filings. As a result, the office is currently evaluating next steps to determine if another application will be accepted in place of Bear Canyon.
Since its inception in 2024, the preliminary municipality pilot program has allowed landowners to bypass traditional incorporation routes to create new towns. Under the program, the lieutenant governor's office can accept up to two such applications each year until 2031. To successfully incorporate, sponsors must first gather signatures from individuals living within the proposed area, totaling at least 7% of the assessed land value and 10% of the land area. If these thresholds are met, a feasibility study is conducted before the proposal is placed on a ballot for a majority vote by registered voters.
Skepticism Over Housing Goals
While supporters argue the program is a necessary tool to address Utah's housing shortage by requiring each preliminary municipality to designate 10% of its homes as affordable, local leaders have expressed skepticism. Wasatch County Manager Dustin Grabau rejected the justification that the program is required to create necessary housing units.
"That's the justification that is being given for why we need several hundred more homes that are very high-end, so that we can get maybe a small handful of arguably affordable units – I just don't think that that's a reality," Grabau said on KPCW's "Local News Hour" on July 21. He argued that the state would be better served by more specific targeting of affordable housing issues rather than relying on "broad-brush development incentive."
Local Opposition Grows
The rejection of Bear Canyon arrives as local officials in Wasatch County prepare to mount formal opposition to the pilot program. Grabau announced that county leaders intend to bring a resolution to the Wasatch County Council in August that would encourage the state to repeal the law and end the pilot program entirely.
In the town of Wallsburg, residents have already begun mobilizing against the possibility of developer-led growth. On July 14, 2026, over 80 residents gathered to discuss concerns regarding the preliminary municipality program. Many residents expressed fear that the 2024 law gives developers significant power over local communities. Shauna Raby, a local resident, stated that the community is currently "up against Goliath" because the legislation allows a small group of developers to hold power over a community.
Infrastructure and Growth Concerns
One specific development that has galvanized Wallsburg residents is the proposed Smooth Hollow project. According to application materials obtained through a public records request, the developer proposed 360 homes and 275,000 square feet of civic and commercial space on land located only a few blocks from Wallsburg Town Hall. While the Smooth Hollow application was not among the two accepted by the lieutenant governor's office this year, the town remains concerned about the broader implications of the program.
Local residents have raised additional concerns regarding the strain on infrastructure. Tom Hicken, a Wallsburg local, expressed worry regarding the town's water supply, questioning if anyone is paying attention to the "reality on the ground" and noting that new developments might not be able to "fill their pipes." Other residents, including Bob Morrison, have urged state lawmakers to prioritize local voices over developers with significant financial resources.
Broader Legal Challenges
The tension surrounding the pilot program extends beyond Wasatch County. In Grand County, residents in the Moab area are currently suing the state and developers, arguing that the preliminary municipality law is unconstitutional.
While Bear Canyon faces rejection, other developments in Wasatch County continue to move forward. The Wasatch Highlands project, which aims to include approximately 2,200 residents, is currently in the early stages of the incorporation process as one of the two accepted applications for the year.
Calls for Legislative Reform
Utah State Senator Keven Richardson, a Republican representing Wasatch and Utah counties, has invited county and town leaders to submit resolutions opposing the pilot program. He has also encouraged residents to prepare to voice their concerns at the State Capitol, describing the current state of the program as a "train wreck" that requires fixing.
