Realtors want say in doughnut lawsuit

The Northwest Montana Association of Realtors (NMAR) has submitted an amicus brief in Whitefish’s lawsuit against the county.

The city wants to retain its jurisdiction over the two-mile planning and zoning area commonly called the “doughnut.”

The Realtors organization asks that Flathead County District Court Judge Katherine Curtis not enter a preliminary injunction stopping the county from taking any further planning or zoning action in the “doughnut” that is retroactive to May 1, 2008.

The Montana Supreme Court ordered Curtis on Dec. 23 to enter a preliminary injunction, but it’s unclear if the preliminary injunction should maintain the status quo from May 1 or Dec. 23.

“This case involves two governments fighting about control,” NMAR’s brief states. “Notably absent from this fight, however, are the affected citizens themselves, more than 5,000 doughnut property owners.”

The Realtors organization, which claims 203 members doing business within Whitefish and more in the “doughnut” area, says the city’s critical areas ordinance (CAO) negatively impacts property owners by imposing 33 pages of complex regulations that affect real estate transactions.

All told, NMAR says 685 properties in the “doughnut” worth $574 million were listed for sale at the time the CAO went into effect.

Worried that buyers, sellers and real estate agents can not understand how the CAO affects properties, NMAR created a disclosure form instructing clients to seek advice ahead of time from the city. But NMAR claims uncertainty continues to exist even after the city makes a CAO ruling.

NMAR cited a case where the city’s former planning director approved a “reasonable-use exemption” from the CAO for several lots in the Grouse Mountain Estates subdivision and then the city council passed a resolution voiding the director’s decision.

“Thus, even if a buyer or seller gets Whitefish’s permission from one agent of the city, it does not mean that it will not be revoked later by another agent acting on behalf of the city,” NMAR’s brief states.

NMAR notes that Tim Grattan, the Grouse Mountain Estates developer, has offered to refund the purchase price of a lot if a buyer cannot build later because of the CAO.

“While this is a creative way to address the risk inherent in developing property in Whitefish’s control, it injects even more uncertainties into a real estate transaction,” NMAR’s brief states.

According to an affidavit by local Realtor Greg Carter, a CAO review by the city before a real estate sale can cost $1,000 to $15,000. In his affidavit, Grattan estimated reviewing 12 lots at Grouse Mountain Estates could cost $30,000 to $50,000.

NMAR also notes that owners of some “liberated” properties already under county jurisdiction will suffer economic damages if the preliminary injunction returns those properties to city control. The organization cites two lakeshore permits the county issued in December as examples.

“Whitefish apparently views this dispute as two feudal governments fighting for their own ends — the conquest of land, without consideration for the subjects who actually own the land,” NMAR’s brief states. “Whitefish ignores the fact that its heavy-handed control of property owners precluded from voting in Whitefish elections has greatly impacted these owners’ property values and their ability to use, enjoy and sell their private property.”