Swan Lakers put freeze on condo project

By JACOB DORAN - Bigfork Eagle

The bleak midwinter seems a bit bleaker for the controversial condominium project set to be built on the north shore of Swan Lake after last month's ruling of the Montana Supreme Court, which granted an injunction to halt the development.

The Montana Supreme Court granted the injunction on Dec. 9, ruling in favor of the Swan Lakers. The action essentially nullifies the August Missoula District Court ruling, which held that the Swan Lakers could not take legal action against Lake County as an association.

The Supreme Court ruling not only allows the Swan Lakers to move forward with litigation but subsequently prevents the Lake County Commissioners from granting final approval to the development until the outcome of the lawsuit has been determined, and actually reverses the approval granted by Lake County Commissioners in October.

The site for which the 42-unit Kootenai Lodge Estates condominium project is proposed is located at the mouth of Swan Lake, on the property of the historic Kootenai Lodge—built in the early 1900's and registered as part of a National Historic District in 1984. Members of the Swan Lakers claim that Milhous Group president, Paul Milhous, sought the Lake County Commissioners' approval for the condo project preliminary plat before former Kootenai Lodge property owners Mark and Debi Rolfing signed the joint application that would have allowed the project to be considered by county officials.

According to Swan Lakers president Peter Leander, the developer, Florida-based Milhous Group, rushed to submit an incomplete application, which lacked critical information and failed to identify any disposal site for sewage in an attempt to get the application in before Lake County adopted a county-wide density plan. A sewage plan was later submitted and approved.

In addition to preventing final plat approval, the Supreme Court ruling forestalls the sale of any property in the platted subdivision by the developer.

The Milhous Group, according to the court order, argued that a bond must be filed in their behalf to compensate for any money lost while they are prevented from selling the property in the event that an injunction were granted. Milhous claimed that it would incur $20,000 a day in damages as a result of the injunction, after having invested more than $44 million to develop and restore the property.

In the interest of minimizing those damages, the Court moved to expedite subsequent rulings by giving the Swan Lakers until Dec. 28 to file their appeal of the Missoula District Court ruling that dissolved the temporary restraining order they secured in August, preventing the Lake County Commissioners from granting final plat approval for the subdivision.

Final plat approval was granted in October, two days after the Swan Lakers filed their initial appeal. However, the development's status now reverts to its standing prior to receiving final approval.

The Milhous Group and Lake County Commissioners have until Jan. 11 to respond to the appeal, after which the Swan Lakers will be allotted two weeks to again respond.

The Swan Lakers are currently engaged in two lawsuits against the Lake County Commissioners, Leander explained. The first of the two challenges the County's preliminary actions with regard to the Kootenai Lodge Estates development.

Those actions, Leander said, "allowed Milhous to sidestep requirements" that ought to apply universally in every situation.

"Clearly they did not require the Milhous Group to act in accordance with the requirements that any other citizen would have to fulfill if they were trying to get a subdivision approved," Leander said.

The second lawsuit challenges the Commissioners' action in granting final plat approval, in the absence of adequate floodplain analysis for the property.

Leander, like many who have followed the case, see the Supreme Court's decision as a major precedent-setter for others involved in litigation against counties, intended to hold county officials responsible for enforcing legal requirements.

"The injuction gets us back in front of the Supreme Court," Leander said. "It is a great precedence that the Supreme Court believes that citizens groups such the Swan Lakers have the right to keep developers from building potentially damaging developments before the merits of a lawsuit are determined."

Although Leander is also an attorney, he credits the legal work in the Swan Lakers' cases against Lake County to the experience of attorneys Jack Tuholske of Missoula and Eric Thusen of Helena, which he said has paved the way for a promising new year.

The fact that the decision came just prior to Christmas made it all the more a gift for the Swan Lakers. Whether it can be considered part of the holiday festivities or not, there was definite celebration in the Swan Lakers camp.

"Santa was definitely smiling on us this year," Leander said. "Santa was smiling on the common man."

Having met the deadline for filing their appeal to the Missoula District Court decision, thanks to the Supreme Court ruling, Leander said he has a positive outlook on the case, which he believes to be stronger than ever.