Condo developers sue city over permit denial

A Bozeman-based development company is suing Whitefish after city council denied a permit for a condominium project proposed on Whitefish Lake.

Attorneys for Lakeshore Group LLC claim council was “arbitrary and capricious” in denying a conditional use permit last month for the lakefront project. The suit was filed Nov. 4 in Flathead County District Court.

“The city council abused its discretion in denying Lakeshore’s request for a CUP,” the lawsuit alleges. “The information purportedly relied upon by the city council in rendering its decision is so lacking in fact and foundation that it is clearly unreasonable.”

Whitefish City Council last month shot down Lakeshore’s proposal to construct six condominium units along Whitefish Lake on a vacant lot at 1340 Wisconsin Ave.

Siding with neighbors who said the project is too dense and poses a risk to the lake, council unanimously denied a conditional use permit request on the project.

Lakeshore’s plans include an accessory building along the north of the property with six enclosed garage parking spaces and an area on the second floor defined as “bonus space.” The project is set on .8 acres and includes a total of 14 parking spaces.

The property is zoned WR-3 which is for one-family or multi-family housing. According to city planning staff, the zoning would allow for up to four units, but because the developer is proposing more, a CUP is required.

The project received a recommendation of approval by the city planning board.

Councilors were concerned about the bonus spaces and the project’s potential impacts on the lake.

“I can’t comfortably approve the application as presented,” said councilor Jen Frandsen at the Oct. 4 meeting.

Councilor Richard Hildner said he was originally in favor of the proposal, but changed his position after hearing from neighbors.

“I came in here thinking I was ready to approve this,” he said at the meeting. “I’ve since been confronted with a whole new set of issues.”

Lakeshore’s attorneys argue that the proposal “substantially conforms to all of the criteria standards” set out in city zoning standards.

“The city council’s decision to deny the [CUP] was not based upon correct findings of fact,” the suit claims.

The developers are asking the court to grant the CUP, and for recovery of damages, costs and legal fees in an amount to be determined.

The city had not responded to the complaint as of press time.

Attorneys for Lakeshore Group are William VanCanagan and Joseph Casilla of Datsopoulos MacDonald & Lind P.C. in Missoula.

Judge David Ortley will consider the complaint.