Summer, 2008: Tom Maclay stands on a ridge above 6,000 feet, looking over the Bitterroot Valley. It's the high point of his land, a nearly 3,000-acre ranch that rises steeply into timber and meets the edge of national forest. The housing market just fell off a cliff. The high-end resort market in the West is tumbling. A few months before, Tamarack Resort, in north Idaho, filed for bankruptcy protection. But Maclay, who's already cut ski runs through the ranch's treed hills for his proposed Bitterroot Resort, is optimistic—perhaps foolishly so. This is a defining characteristic.
Maclay is in his early 50s and fit. His boyish hair, thick and straight, is beginning to turn gray. His planned resort is well positioned, he maintains. He's only borrowed about $19 million against the ranch's value. He hasn't yet tapped investors for the roughly $200 million he says he needs to build ski lifts and infrastructure and a resort village. Without the kind of debt load that sunk Tamarack, and having not built much yet that could plummet in value, Maclay says he can weather the recession.
"It's very good to be standing outside of that," he says.
He's content to wait for the market to bounce back. He's sure it will. Nearby is Jim Gill, the well-paid manager Maclay hired a few years before to help him develop the resort. Gill's a 30-year veteran of the ski industry, having held top posts at Breckenridge, in Colorado, and Jackson Hole Mountain Resort, in Wyoming. "You try to set yourself up for when things start picking back up again," Gill explains.
Yet, even if things do pick up soon, Maclay and anyone else paying attention have reason to doubt his grand vision for a four-season resort, with the greatest vertical descent in North America, a golf course and 2,700 houses. The Forest Service has rejected his attempts to access public land between his ranch and Lolo Peak. Now his proposal, which originally asked for more than 11,000 acres of public land, has been scaled back to 3,000. And, though few know it, Maclay is having trouble paying his bills. He's quietly selling off small chunks of his land.
But Maclay insists the Bitterroot Resort will be built.
"It can't not work out," he says.
Over the next three years, Maclay's problems snowballed. Several contractors placed liens on his land. He let Gill go, unable to pay his $11,000-a-month salary. He halted his snowcat-skiing operation. He sold more land.
The resort market continued its downhill run. The Yellowstone Club, the private playground for the mega-rich, and the ski resort Moonlight Basin, both near Big Sky, filed for bankruptcy protection, their failures calling into question the use of real estate to support high-end resorts in the West.
And Maclay missed payments on his $19 million loan, most of which MLIC Asset Holdings, part of the insurance giant MetLife, gave him in 2005, near the height of the housing boom. The collateral: the entire Maclay ranch. In October 2009, MLIC began foreclosure. With interest, Maclay now owed more than $23 million.
On Wednesday, Feb. 22 of this year, a dreary day that couldn't decide between rain and snow, a crowd congregated inside the entrance of the Missoula County Courthouse. If it hadn't been so gray, you could have seen Maclay's white ski runs on the flanks of Lolo Peak through the courthouse's large arched window. A sheriff's deputy stood at the bottom of the courthouse steps and auctioned off Maclay's land, a public shaming Maclay chose not to attend. A man bid $1 million. "Going once," the deputy said. "Going twice."
Then another man leaning against the stairwell railing bid $22.5 million.
"Sold," said the deputy.
The second man, the winner, was a Billings attorney representing MLIC.
Maclay's land wasn't gone yet, however, not quite. The auction started the clock. Maclay now has one year to pay back the loan and save the ranch, which has been in his family for five generations, since well before Montana became a state.
He says he's optimistic.
Ranch to Resort
McClain Creek, which flows east out of the Bitterroot Mountains and across the Maclay ranch, is named for T.A. McClain, Tom Maclay's great-great-grandfather, who settled in the lower Bitterroot Valley in the 1870s. The first Maclay to arrive there was D.R. Maclay, Tom's great-grandfather, in 1883. D.R. was a cattle rancher. He bought his land. That's an important distinction for Bruce Maclay, Tom's father; he doesn't want anyone thinking the family was handed the ranch.
Tom's grandparents settled on the ranch after getting married in 1923, Bruce says. Bruce and his sister were raised on it.
In the 1930s, during the Great Depression, Roosevelt's New Deal bolstered Montana's economy with capital and job-creation programs, such as the Civilian Conservation Corps. On March 26, 1935, the Missoula Sentinel reported that the CCC planned to build a road to Lolo Peak, then known as Mount Lolo: "This road, ascending from 3,620 feet to the peak altitude of 9,075 feet, would reveal the Missoula and Bitter Root valleys, through a 12 or 13-mile climb to the crest of Mount Lolo, offering one of the most attractive scenic roads in the West, in the belief of forest officials."
The road wasn't built. Lolo Peak continued to tempt development. In the 1960s, forest officials saw the mountain's potential for skiing. The district ranger enlisted forester Roger Lund to help study the feasibility. Lund drove Jeep trails up onto the Forest Service land above the Maclay ranch, roaming around Carlton Ridge and in the Carlton Creek and Mill Creek drainages, evaluating grades, snow depths and possible sites for ski lifts. He used aerial photos and a stereoscope to lay out a potential ski development. The idea, he says, was for the district to prepare itself should a developer come forward.
"The apparent potential of Lolo Peak as a winter sports center is so great that it can properly be classified as a national resource," Lund wrote in a Forest Service memo in 1966, when Tom Maclay was just a boy. "Full development of this resource is in the best interest of the American public and should be a recognized goal of the Forest Service. Any development allowed on the area should be directed toward the ultimate full development of the resource."
No developers came forward, however, and Lund's study was stashed on a Forest Service shelf.
Meanwhile, national forest management philosophy evolved. In 1970, Congress enacted the National Environmental Policy Act, a reflection of the country's growing environmental awareness. The act required all federal agencies to prepare assessments of the environmental impacts of proposed projects. 1976 brought the National Forest Management Act, a systematic approach to resource management that expanded public involvement and limited agency discretion. Increasingly, the highest and best use of forest land was to leave it alone.
In 1987, 920 acres of alpine larch forest above Maclay's land became the Carlton Ridge Research Natural Area. The Forest Service designated the RNA to provide "non-manipulative research, observation and study of undisturbed ecosystems" for perpetuity.
In 1988, the concept of a resort on Lolo Peak was put on a Missoula County ballot. It was approved by 63 percent of Missoula voters.
In 1990, a private feasibility study concluded that a resort, accessed from Highway 12 to the north of Lolo Peak with a base area below 5,900 feet, lacked "adequate natural snow to be competitive as a destination ski resort of national significance."
All the while, the Maclays kept ranching. "My family lived here, and that's how we made our living, clear through 'til we sold our cattle in 2001," Bruce says. Tom, the second of Bruce and Mary Maclay's three children, didn't see a future in ranching. "He could see the ski possibilities and decided that's the way he wanted to go," Bruce says. Other Maclays had considered that the ranch could be part of a ski resort, but "not to the point where they acted on it," he says.
Tom began discussing a possible ski resort with the Forest Service in 1999. In 2000, he, along with his ex-wife and his parents, took out a $2.25 million mortgage loan from MLIC. In 2003, Tom began cutting ski runs up to the Forest Service boundary. In 2004, the Forest Service told him that his plan to access public lands was incompatible with the Lolo and Bitterroot national forest plans. Still, in 2005, Maclay publicly announced his proposal and asked the Forest Service for access to more than 11,000 acres. His application didn't make it past the agency's first screening. Later that year, MLIC loaned Tom and his parents another $16.55 million.
In 2006, the Forest Service sued Tom for cutting about 400 trees on public land, including within the Carlton Ridge Research Natural Area. The sides settled and Tom paid a $20,000 fine. In 2008, the Forest Service rejected Maclay's scaled-down proposal.
In 2009, MLIC decided it wanted its money back.
In some ways, the wonder is that Tom got even this far.
Roger Lund, the forester, who's now 82 and lives in Paradise, Mont., says that in the 1960s, the Forest Service "felt that the national forest was a good place for recreation, and didn't really think [development] was a conflict of uses. Today, they feel that that's taking away land and tying it up in private management to the detriment of people who just want to look at it and walk around on it."
On a recent morning, about a week before the sheriff's sale, Tom Maclay rolls out an old map on a table in his home. It's the ski resort map drawn by Lund, dated November 1966. It details sites for ski lifts, including a gondola, hotels and lodges. "They had a pretty good understanding of what it took," Maclay says.
To him, the fact that the Forest Service supported the idea of a ski resort on Lolo Peak a half-century ago appears to prove that he's getting screwed now.
Maclay lives in a 5,565 square-foot Douglas fir log home on the hillside overlooking the Bitterroot Valley, fit for the pages of glossy Western real estate magazines. Maclay paid for it with the first of the two MLIC loans. He offered public tours of the home in 2006, billing it as an example of the kind of local craftsmanship that would characterize the Bitterroot Resort's residences. Six years later, it's still the only home at the end of a winding dirt road, near McClain Creek and in the shadow of empty ski runs. On the way here, about 40 elk were spotted grazing in the edge of the timber.
Maclay's never been media-friendly, but today he's parading through local news outlets. He wants to share his version of the story, of how a man who inherited one of the most beautiful ranches around might find himself homeless in a year.
Sitting at the table, reading glasses resting on the edge of his nose, Maclay reads from a notepad, delivering calculated, opaque quotes. He reads Lund's memo about the Lolo Peak area being a "national resource." He notes the 1988 ballot results. He claims that the area has been among the top three sites in the Forest Service's inventory of potential ski areas. He says the agency "brilliantly" modeled the site in Lund's day and that the north-facing fall lines are "wonderful."
"It just so happens that this ranch holds all the keys," he says, "including a four-lane highway corridor, ranch water rights, base-lands for development—all the pieces were here."
So why has the Forest Service repeatedly said no?
Maclay alleges a conspiracy.
He says he's spent the last year following the threads of a "complex web" of coordinated misconduct within the Forest Service dating back to the '60s. It involves the building of a Forest Service road that triggered a landslide that damaged his property, a protracted court battle, a threat to condemn and devalue his land and, most egregiously, he says, conflicts of interest among agency staffers with incentives to see his proposal fail. He can't prove it, but he's trying to through the Freedom of Information Act. He's been stymied so far, he says, partly because the stack of documents he seeks would cost, he was told, about $200,000 to produce. "There's probably a file this thick somewhere that explains a lot," he says.
In any case, he's convinced that what he's uncovered shows that he's been stiffed, and as a result, his resort proposal has been whittled down to a point where it's no longer attractive to investors.
"I've burned up our family's ranch equity thinking I was in a fair process," he says.
In his Missoula office, Paul Matter, the Missoula District Ranger, essentially shrugs. "I think from the perspective of somebody who was around in the '50s and '60s and had this idea that Lolo Peak was a good place for a ski area—well, things evolved and changed and obviously we're not in the same time and place," he says.
Maclay and the Forest Service have exchanged more than 100 letters over the years. Some of them are strewn on Matter's desk. He finds the rejection letters the agency sent Maclay in 2004, 2005, and 2008. That Maclay's proposals—including the one from 2008 that asked for access to 3,000 acres for gladed skiing, Nordic skiing, guided touring and mountain biking, none of which would require ski lifts on public land—haven't jibed with forest plans is "huge," Matter says. "Those are insurmountable problems."
Maclay's early proposals ran into trouble largely because he proposed ski runs and a lift in the Carlton Ridge Research Natural Area. The scaled-back proposal in 2008 was rejected because it would have affected lynx habitat and big game winter range and wasn't consistent with soil, water and visual quality standards. And public sentiment had turned decidedly against the resort: In 2007, when the Lolo and Bitterroot national forests were taking comments on their revised management plans, more than half of the roughly 2,000 letters received were specific to the management of lands around Lolo Peak, and about 80 percent of those were in opposition to a resort, according to a Sierra Club analysis.
"I don't know if it's possible or not to have a major resort fit the plans," Matter says, "but the proposals he came forward with did not."
Maclay is moving on. He has to. He has less than a year to turn the Maclay family ranch into cash. "There's always a Plan B," he says. "The train is leaving the station on the public model." Instead, "Why not just have a private club?"
He envisions an exclusive community where only residents can access the slopes, something akin to, though less extravagant than, the Yellowstone Club. Or maybe just a modest public resort. Either way, the development would be based only on the existing ski runs.
"There are plenty of people who see a shorter return on a private model than a pubic modeland a lower up-front investment," he says. "That can be easier to do...It's a simpler, faster model."
Faster being the key word.
"We certainly remain optimistic to move forward and obtain investment," he says.
Can he secure enough to pay off his existing debt and finance the development?
He says the ranch is worth "multiples" of what he owes, but he doesn't put a number on it.
MLIC put a number on it—$22.5 million. That's about $8,000 an acre. Bill Zader, a real estate agent with an office just below the Maclay ranch, guesses that the ranch land is worth between $12,000 and $14,000 an acre, or at least $33.6 million.
Maclay has his supporters. Dick King, the former director of the Missoula Area Economic Development Corporation, says some members of the business community, "who think this is really a good idea, especially now with the economic changes that we've experienced," have recently gotten together in hopes of salvaging the resort and its potential economic benefits before Maclay's clock runs out.
Five years ago, the MAEDC and the Missoula Area Chamber of Commerce commissioned a study, by Portland, Ore.-based economic consultants ECONorthwest, that compared the economic impacts of a Bitterroot Resort with access to skiing on public land versus one without. It predicted that in the first decade, the "destination" resort would create about 4,600 jobs and generate more than $450 million in economic activity in Missoula and Ravalli counties, while the smaller resort would generate about 800 jobs and $90 million. That was before the recession.
Meanwhile, with the door nearly closed on developing Lolo Peak, Friends of Lolo Peak is working to slam it shut. The group, which formed in 2004 to fight Maclay's proposal, is lobbying to add the Lolo Peak and Carlton Ridge areas to the adjacent Selway-Bitterroot Wilderness. "We're looking to put in the last piece of the puzzle up there," says Friends of Lolo Peak member Steve Seninger.
The Maclay ranch is one of the last remaining swaths of intact ranch land in the lower Bitterroot. Maclay says he can give directions to the ranch at night by telling people to "drive out of Missoula until it gets dark, because there's this two-by-three mile black hole that's surrounded by development."
It's going to be developed, too. The question is how and by whom—Maclay or MLIC, or whomever MLIC might sell it to. The company won't say what its plans might be should it take ownership in a year.
Maclay's original proposal called for a dense resort village. Now the ranch seems more likely to become another hillside dotted with five-acre ranchettes.
"One of the things that really seems significant to me," says King, "is that a well-planned resort with supporting infrastructurewater and sewer, etc.has a far less harmful impact on the environment than the other alternative for development, which we tend to call sprawl."
Allan Foss, a long-time neighbor of the Maclay family, who attended the sheriff's sale, says he fears that a subdivided Maclay ranch will just add to the "unsightliness" of much of the Bitterroot. Years ago, when Maclay first proposed the resort, Foss was on "both sides of the fence," he says. He wasn't convinced that enough snow falls on the hillside for a viable ski resort. But, "being as I own property right next door, even though I didn't honestly believe in what he was doing, I kept the properties because I thought, 'Well, possibly, if the thing works out, it could be something that would help my own economy.'"
Foss says he tried to keep an open mind, but as time went on, he saw Maclay make too many mistakes—contractors who went unpaid, development plans he didn't like. He wrangled with Maclay over water rights and access to Forest Service roads. Foss believes all the goodwill the Maclay family created over years is gone, "basically because of one man." The scars, he says, are on the mountain.
"It turned out to be a huge fiasco," Foss says. "And the thing is, the repercussions of this are going to be in people's minds for a long time. I've had this property for 46 years and I've lived on it a good number of those years. I'm familiar with the family, I love the ranch. I've always just thought it was the most beautiful place there was. And even in my own mind, it's a big black cloud now."