Lake County faces new suit over Swan Lake

by JIM MANN The Daily Inter Lake
| June 14, 2005 1:00 AM

A third lawsuit has been filed against the Lake County Commission because of its approval of a development at the historic Kootenai Lodge on Swan Lake.

The latest lawsuit, brought last week by the Swan Lakers community group and Swan Lake resident Bradley Wirth, incorporates key issues raised by the first lawsuit, which recently was withdrawn, said Peter Leander, a Bigfork attorney and president of the Swan Lakers.

Leander filed the second lawsuit on behalf of Wirth and 10 "John Does."

Combined, the lawsuits raise similar issues by alleging that the commissioners wrongfully granted preliminary plat approval for development of 57 condominium units and 24 boat slips at the Kootenai Lodge, one of only three places in Lake County listed on the National Register of Historic Places.

Lake County Planning Director Sue Shannon recently defended the decisions of county officials.

"I feel the planning staff did the most thorough job they could reviewing this under current statutes," said Shannon, who declined to comment about specific claims in the lawsuits.

Getting preliminary plat approval was a major victory for the Milhous Group, a Boca Raton, Fla., development firm led by part-time Swan Lake resident Paul Milhous. But it came in the face of overwhelming opposition from residents in the Swan Lake and Ferndale areas.

The latest lawsuit contends that in terms of public comment, opposition to the project was about 300 to 3.

The lawsuit reiterates claims that the development violates the state constitutional provision guaranteeing Montanans a right to a "clean and healthful environment," and it challenges the state's Subdivison Act on constitutional grounds.

That 1993 law essentially weighted subdivision planning in favor of developers because it ended a requirement that "expressed public opinion" be considered in subdivision reviews.

The state Constitution states, "The public has the right to expect governmental agencies to afford such reasonable opportunity for citizen participation in the operation of agencies prior to the final decision as may be provided by law."

The Subdivision Act gives developers the avenue of suing for monetary damages if they wrongfully are denied approval. The public, meanwhile, cannot sue for monetary damages.

"In essence, county taxpayers are forced to pay damages to the subdivider if the county protects its taxpayers' constitutional rights," the lawsuit alleges. "In most cases, the mere threat of an expensive lawsuit for damages will coerce a county into approving a questionable subdivision."

The lawsuit charges that the Lake County commissioners' "primary consideration was to avoid a lawsuit by the Milhous Group."

The challenges have the potential to go to the state Supreme Court and could have statewide ramifications, Leander said.

The lawsuit makes 13 claims against the county. It alleges that the Milhous Group's initial application was disapproved Feb. 18 by the Lake County Planning Department because it did not include the signatures of Mark and Debbie Rolfing, the Kootenai Lodge owners of record.

Five days later, planning officials reversed that position and accepted the application after "a private meeting" with former county Planning Director David DeGrandpre, who works as a consultant for the Milhous Group.

The commissioners granted preliminary plat approval even though Milhous' purchase of the property is not complete.

Leander said another important allegation in the lawsuit contends that the commissioners wrongfully granted preliminary plat approval, even though the developers did not have a viable plan for sewage disposal in place. The Milhous Group had proposed piping sewage down the lakeshore to a treatment plant that would be built on Milhous property in The Ridge subdivision. Covenants in that subdivision recently had been amended to prohibit sewage-treatment facilities.

Leander said the Milhous Group may propose an alternative site for a sewage-treatment facility, but in any case, that plan should be in place before preliminary plat approval.

The Subdivision Act and an attorney general's opinion require the commissioners "to consider, the preliminary plat stage, all the issues necessary for compliance with the applicable laws and regulations."

In granting approval, the commissioners also failed to follow the Lake County Growth Policy's provisions to "encourage housing that maintains traditional development patterns and protects property values and natural resources," the lawsuit states.

A major issue is that the Milhous project involves housing density that far exceeds housing densities around Swan Lake.

"I want to emphasize this is not a bunch of people saying we want zero development," Leander said. "It should just fit with the character of the area, and that project doesn't."