Subdividing suspicions 

Did a Polson councilman do himself a favor?

In November 2005, nonprofit watchdog group Polson Citizens for Better Government (PCBG) filed suit against the city of Polson, its mayor, city council, city attorney and water supervisor. The suit challenged the city council’s decision to lift a development moratorium, and alleged that the decision had been improperly influenced by former council member Mike Maddy, who at the time was in the process of developing Cougar Ridge, one of the largest subdivisions in Polson’s history.

In February, Lake County District Court dismissed PCBG’s suit on the procedural grounds that it had not been properly served to the defendants. But on Feb. 22, a Missoula development company brought allegations to the council implying that it had improperly made decisions regarding a particular subdivision that benefitted Maddy’s plans for Cougar Ridge.

At the Feb. 22, 2006 Polson City Council meeting, Missoula’s Westana Inc. was on the verge of relinquishing a $117,000 bond to the city of Polson for not having completed required infrastructure improvements mandated by the city when it approved Westana Homesites, a five-lot subdivision in Polson. At that meeting, Westana lawyer Terry K. Botsford submitted a letter to council alleging that the nearby Bauer Homesites subdivision, part of which Maddy had purchased to allow for an access road to Cougar Ridge, had been held to lesser standards when it came to infrastructure improvements, and that Westana was made to complete improvements Bauer and Maddy should have made.

When Marge Hendricks, president of PCBG, read the letter, she thought that at best “It showed preferential treatment” toward Maddy and Bauer, and at worst a conflict of interest, supporting PCBG’s suspicions about the Polson council’s allegedly insider agenda.

Lot 1, the portion of Bauer Homesites Maddy purchased in November 2002 and now plans on using to provide access to Cougar Ridge, borders Westana to the west and Cougar Ridge to the northeast.

During the review process for the Bauer Homesites development, Monte Sipe, Polson’s city planner at the time, noted problems with Bauer’s proposal for Lot 1. A 1999 resolution passed by the council had determined that no further development could occur on the water line that eventually served that lot until the line was upgraded. Also, Lot 1 did not have required access to a road. The closest road, 15th Ave. E., dead-ended on the other side of Westana’s property.

Polson City Council gave the Bauer subdivision preliminary approval anyway, on the condition that if Lot 1 were to be further subdivided, the owner would pay to upgrade the water line, and the developer of Bauer Homesites would pay for a road base, minus the paving, to be extended to the edge of Lot 1.

Bauer was also granted a waiver of city requirements to put in curbs, sidewalks and gutters, with the mayor describing these as an “unnecessary burden” on the developer. Maddy, who became a council member in 2002, abstained from voting on Bauer’s preliminary approval, but voted yay for the final approval.

The city council granted final approval for Bauer’s development at a July 15, 2002 meeting, even though the road base had not been finished. As recorded in council minutes, Maddy notes that he was “looking into the developer’s proposal to finish the road at a later time,” saying it was apparent Westana would be developing along 15th Avenue, and would just tear up whatever work Bauer was forced to pay for. Still, Maddy told the council that Bauer’s portion of the roadwork would be completed by August. The final approval for Bauer Homesites passed unanimously; the road base has yet to be completed.

Westana Inc. appears to have been held to stricter standards.

When its development was approved in July of 2002, Westana was required to pave 15th Avenue and put in sidewalks, curbs, gutters and turnarounds for fire engines and fire hydrants, even though these same amenities had been considered an “unnecessary burden” for Bauer. Westana was also required to upgrade the water line, which Maddy, as future owner of Lot 1, would have been required to pay for under the conditions imposed on Bauer. As a member of the city council, Maddy voted to require Westana to meet these conditions and be bonded for their completion.

Citing the seemingly different standards to which Bauer and Westana were held, Westana’s lawyer alleges in his letter to council that the conditions his client was bonded to meet are “arbitrary, unequal and unjust.”

But Maddy insists there’s a different interpretation of events.

He says that although he planned to subdivide and sell Lot 1 in the future, Westana subdivided and sold its lots first, and therefore assumed responsibility for providing the infrastructure.

“So, if I don’t develop Lot 1 for 10 more years, the people that Westana sold to are never going to have water or streets?” Maddy asks rhetorically.

“This Westana thing is so pathetically ridiculous,” because, he says, Westana has sold the lots on its subdivision, and is now trying to get out of paying for infrastructure.

The real victim here, in Maddy’s view, is not Westana Inc., but the people who bought Westana’s lots.

“Westana sold lots to people with the impression that [the developer would] upgrade those systems,” Maddy says, “and then came back and said somebody else should do it.”

At the Feb. 22, 2006 Polson City Council meeting, the council declined to accept Westana’s interpretation of events, and voted to collect their bond money.

Westana’s lawyer wouldn’t say if his client plans to take Polson to court over the collection of the bond.

In the meantime, the allegations contribute to an atmosphere of increasing distrust in the city’s subdivision process, at a time when the city is feeling increased development pressure.

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