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.