Decision delayed on $1 million settlement

Flathead County commissioners agreed to postpone a decision on the proposed North Shore Ranch lawsuit settlement for one week while they consider a wealth of citizen input from Monday’s public hearing.

A decision on terms of the settlement will be made at 10 a.m. March 8 at the commissioners’ chambers. A judge also must approve the settlement before it becomes final.

At issue is a tentative $1 million cash payment to settle a lawsuit filed by North Shore Ranch developers against the county for its failure to approve the 364-acre development near a Somers waterfowl production area.

The proposal also provides for the approval of a modified subdivision and requires the county to pay for turn lanes on Montana 82 and about three miles of internal roads in the revamped subdivision.

In exchange, the county would get 150 acres of open space with public access along the north shore of Flathead Lake.

“This is about risk management,” said Missoula attorney Alan McCormick, the county’s legal counsel in the settlement negotiations.

According to the mediator in the negotiations, if the county chooses to forego the settlement and take the case to a jury trail, it could cost the county $8 million to $15 million or more in damages.

The tentative agreement ironically brought both sides of the aisle together in their opposition of the proposed settlement.

Property-rights advocates took the commissioners to task for turning down the developers, a decision that ultimately could cost taxpayers up to $3 million by the time subdivision roads are built at county expense over several years.

And conservation proponents were equally upset because the deal gives the developers approval for a reconfigured subdivision in an environmentally sensitive area without the project going through the planning process.

Both groups pleaded for more transparency in county government.

“When you follow the whole trail there’s a common theme”  of a lack of transparency, openness and fairness, local resident Donna Thornton said.

McCormick later explained that a perceived lack of transparency stems largely from the constraints of attorney-client privileges in settlement negotiations.

After listening to public testimony for two hours, the commissioners had little to say but told the audience that attorneys for Kleinhans Farms Estates, the limited liability corporation of developers Sean Averill and Keith Simon, had given permission to wait a week with a final vote on the settlement.

“We had an obligation to bring forth the best possible settlement and believe it or not, this is what we came up with,” Commissioner Joe Brenneman said.

Two years ago, Brenneman and then-commissioner Gary Hall voted to deny preliminary plat approval of North Shore Ranch. They maintained it wasn’t good policy to approve a subdivision with flood easements attached to the property.

Commissioner Jim Dupont said it’s a difficult decision because he sees the value of preserving crucial waterfront areas in the Flathead.

“We’re trying to mediate something that’s a legal issue,” Dupont said. “It’s easy to say let it go to court and we’ll look at the risk factors, but it could be a substantial loss” to the county.

Kalispell attorney Roger Sullivan, speaking as a private citizen, presented a detailed rationale for rejecting a settlement he believes would cause the public interest to “suffer grievous harm” if it proceeds as proposed.

It’s not just the potential environmental impacts to Flathead Lake that are at stake, he said.

“More fundamentally what is at stake is the trust of your constituents in the integrity of the process that has resulted in the proposed settlement,” Sullivan said. “Notwithstanding the unheard-of cost of the settlement in cash and construction of infrastructure, let alone the approval of a large and substantially changed subdivision ... it is difficult if not impossible for an interested member of the public to evaluate in an informed manner the proposed settlement and subdivision approval.”

The court quashed the developers’ attempt to subpoena records from three local conservation groups — Flathead Land Trust, Citizens for a Better Flathead and the Flathead Lakers — that the developers said influenced the commissioners’ decision to deny the subdivision.

In that order, District Judge Ted Lympus noted the commissioners’ findings of fact and said they “establish that a significant basis for denying the development request” existed in the case.

McCormick noted later in Monday’s hearing, though, that the effect of the order Lympus issued was “grossly overstated” and actually addressed that one issue — the motion to quash the subpoenas of records from the nonprofit groups.

JOHN VORE, a biologist with Montana Fish, Wildlife and Parks, read a letter in which Regional Supervisor Jim Satterfield pointed out that the open-space set-aside in the settlement agreement is not a permanent easement. There is no guarantee the 150 acres would remain open, Satterfield said.

The county would require that $600,000 of the $1 million settlement pay for the easement, but if the developers sell the property, they would only have to reimburse the county the $600,000.

Satterfield said the agency last summer proposed buying the North Shore Ranch property in phases, but the owners weren’t interested.

Several citizens said they believe the commissioners made the right decision in denying the subdivision two years ago and should have filed a motion for summary judgment in the case, a standard practice in such proceedings.

Bruce Young of Lakeside told the commissioners to “stand up, get a backbone and take this to summary judgment.”

Another man in the audience said “It’s time to call their [the developers’] bluff and keep the land for our kids.”

“This whole thing stinks to high heaven,” Karen Reeves said. “As soon as we say roll over on this one, we’ll have to roll over on all of them. Let’s take it to trial.”

A KEY concern was not only the proposed approval of a redesigned North Shore Ranch but also the density that still would be allowed.

The initial subdivision called for 290 single-family homes, but the new preferred design calls for 289 units, including 78 homes, 149 condominium units, 60 assisted-living units and two commercial lots.

A number of other unsettling conditions were noted by Sullivan.

Under the new conditions, the developers no longer would be required to provide a detailed analysis of soils or a provisional water-right permit approved by the state with the application for final plat. The developers wouldn’t have to provide a waiver of protest for future special improvement districts and wouldn’t have to submit a permit for any work conducted in the 100-year flood plain.

“The commissioners are in effect writing two checks to the developers,” Sullivan said. “One is in the amount of $1 million plus the very real costs of specified improvements. The other is a blank check in the form of an approved preliminary plat which lacks the specificity required by our laws and demanded by common sense.”

 Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com