Condo conundrum 

Kootenai Lodge suit could set subdivision precedent

Peter Leander, president of the Swan Lakers, a non-profit neighborhood group, says it was no accident that the group’s lawsuit against Lake County is shaping up to set a precedent for Montana law governing subdivision regulations, making it easier for county commissioners to base land-use decisions on environmental and community interests, rather than fear of being sued.

“If there’s one thing we learned,” Leander says, “it’s that the citizens don’t want to keep beating their heads against a wall. We need to look at the bigger picture. We need to level the playing field.”

Leander and hundreds of other Lake County residents began attending Lake County Planning Board meetings early this year when they learned that a Boca Raton, Fla.-based development firm, the Milhous Group, planned to build 57 condominiums on the site of the historic Kootenai Lodge on Swan Lake.

The Lakers objected to the density of the development, saying it was out of character with the community surrounding Swan Lake. They were also concerned about the removal and destruction of historic buildings on the property, the effect the development would have on the local environment, and the number of boat slips the proposal would add to the lake.

“I think that this subdivision poses a real threat to the values Montanans cherish,” says Jack Tuholske, lawyer for the Swan Lakers. “It might be fine for Boca Raton, Florida, but not for the banks of Swan Lake.”

Kootenai Lodge sits on 40 acres and comprises about 20 log buildings, from shacks to mansions. Much of the original construction on the property was done in the early 1900s and paid for by Lewis Orvis Evans and Cornelius Kelley of the Anaconda Copper Company. John Lewis, the same man who built the Lake McDonald Lodge in Glacier National Park, built many of the buildings. Over the years, the Lodge received visits from famous guests including John D. Rockefeller, Will Rogers, Charles M. Russell and Charles Lindbergh.

For a time in the 1970s, the lodge fell into a state of disrepair. But in 1990, Mark and Debi Rolfing bought it and remodeled and restored many of the buildings. The Rolfings entered into a buy/sell agreement on the property with the Milhous Group on Aug. 20, 2004. The property was sold July 1, 2005 for an undisclosed sum.

When Lake County commissioners unanimously approved the Milhous Group’s request for preliminary plat approval in May, the Lakers filed suit against the county.

In addition to his role as party to lawsuit, Leander, an attorney, is also representing two members of the Swan Lakers who say Lake County commissioners violated open-meeting laws during public hearings on the Milhous Group development.

The Lakers’ lawsuit asserts that the developer’s request for preliminary plat approval was wrongly granted by Lake County commissioners on several fronts. For one, the suit says, the Milhous Group had yet to take ownership of the land before applying for preliminary plat approval, and therefore needed signatures from the owners on their application, per Montana state law. The Lake County Planning Department originally turned down the application because it lacked the owner’s signature, but, the suit alleges, the planning department changed its mind and approved the application after speaking with former Lake County planning director turned Milhous consultant David DeGrandpre.

On Oct.19, Judge Douglas Harkin of the Fourth Judicial District Court in Missoula denied a request by Lake County to dismiss the case.

The Lakers’ suit also alleges that Milhous had no plan for mitigating the environmental effects of sewage generated by the 57 condominiums when it submitted its application. According to Tuholske, such a plan is a state requirement for any subdivision application.

But the aspect of the suit that could change subdivision law is the allegation that because Montana law gives developers the right to sue counties for monetary damages over land use decisions, but doesn’t specify the public’s same right, counties are forced to consider their pocketbooks above all else when deciding how to rule on subdivision requests.

This aspect of state law, according to the Lakers’ attorney, denies county residents equal protection, as well as their right, under the Montana Constitution, to “a clean and healthful environment.”

Alan McCormick, an attorney for Garlington, Lohn and Robinson, which is representing Lake County, counters that while there is no specific mention in state law of citizens’ right to sue for monetary damages, there’s also nothing precluding it. McCormick says that Montana case law would allow a district court to award monetary damages to citizens, since there’s no prohibition against it.

But regardless of McCormick’s assurances, the county’s perception remains that only developers can sue. Lake County attorney Bob Long says the current Montana law “puts pressure” on county commissioners to consider lawsuits over other concerns when making land-use decisions. He believes that this case, if won by the Lakers, will set a precedent for the state, which, depending on the final decision, would either allow the public to sue the county for monetary damages, or no longer allow anyone to sue counties for monetary damages over planning decisions. Long thinks such a precedent would be positive for the county, especially if both developers and the public were prohibited from suing counties for monetary damages.

Why, then, is the county fighting the suit?

Long says there are other aspects to the case, and that the county is obliged to back its planning decisions.

Before condo construction can begin at the Kootenai Lodge site, the Lake County commissioners must give final plat approval. To get final approval, the Milhous Group must meet 36 conditions set forth by the planning department, including development of a feasible septic plan.

No court dates for the case have been set.

In the end, whether or not development on the Kootenai Lodge property takes place as currently proposed, Leander says one of the Lakers’ ultimate goals with their suit is to change the face of subdivision law. Whether that’s accomplished with this suit or not, he says, Montana needs a new approach to approving subdivisions, one that puts the environmental and community interest on the same level with developers’ rights.

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