Lawsuit by Swan Lakers can proceed

A lawsuit filed against Lake County about a development at the historic Kootenai Lodge on Swan Lake can proceed under a recent ruling from a Missoula judge.

District Judge Douglas Harkin's ruling Oct. 19 rejects the county's request to dismiss the lawsuit filed by the Swan Lakers, a group that was formed in response to a Florida company's plans to build condominiums on the Kootenai Lodge property.

"The judge's ruling is a huge victory for the Swan Lakers and all of the citizens of Montana," said Peter Leander, president of the Swan Lakers. "The judge is telling the county commissioners and the Milhous group that they must face our allegations and defend themselves in front of a judge or jury."

The lawsuit takes direct aim at a subdivision statute that entitles developers to sue counties and other planning jurisdictions for monetary damages that result from wrongful planning decisions. Because the public cannot sue for monetary damages, county commissions across the state have more incentive to go along with developer plans, Leander said.

"The commissioners, in the end, are not approving these because they think they are in the community's best interest … but because they fear they are going to be sued," Leander said.

The lawsuit alleges that was the case with the Lake County Commission. It cites multiple counts in charging that preliminary plat approval was wrongfully granted to the Milhous Group of Boca Raton, Fla.

The development firm, owned by part-time Swan Lake resident Paul Milhous, has preliminary approval to build 57 condominiums and as many as 24 boat slips at the Kootenai Lodge property, once a retreat for luminaries such as Charles Lindbergh and Charlie Russell.

But first, the Milhous Group must comply with 36 conditions before the commission will consider final plat approval for the development. One of the more difficult conditions requires the developers to have a feasible septic disposal system in place. The Milhous Group originally planned to pipe sewage down the Swan Lake shoreline to another property where a septic treatment plant would be built. But residents in that subdivision amended their covenants to ban septic-treatment plants.

Since then, the developers have been exploring alternative plans that would involve pumping waste to other sites across Montana 83. The lawsuit alleges, in part, that a septic-treatment plan needed to be in place before the commissioners could legally grant preliminary plat approval.

No building can begin until final plat approval is granted. The Milhous Group has relocated a historic barn on the property and removed some trees to make way for condominium development.

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com