Montana Supreme Court Rules Against Swan Lake Development

By Beacon Staff

The Montana Supreme Court Thursday ruled in favor of a community group, granting an injunction against the development of 42 condominiums on the north shore of Swan Lake.

A victory for the Swan Lakers, the ruling prevents the Lake County Commissioners from granting any final approval to the controversial Kootenai Lodge Estates subdivision, and rolls back that approval, granted in October. The order also prohibits Florida-based developer, the Milhous Group, from selling any property in the subdivision, which sits about eight miles from Bigfork at the mouth of Swan Lake.

Thursday’s decision basically refutes an August Missoula District Court ruling that the Swan Lakers, as an association, did not have standing to take legal action against Lake County. It allows the Swan Lakers to proceed with a lawsuit charging that Lake County Commissioners allowed Milhous to sidestep certain regulations in granting approval to the development.

“It is just such a great, great victory for the Swan Lakers and for every citizen of Montana who wants to bring a grievance against government action that infringes upon their rights,” said Peter Leander, Bigfork attorney and president of the Swan Lakers.

According to the court order, the Milhous Group argued that should an injunction be granted, a bond must be filed on its behalf to compensate for the money lost while the property cannot be sold. Milhous said it has invested more than $44 million on restoration and development of the project, and it will incur damages of $20,000 a day under the injunction.

To minimize damage to Milhous, the Court is moving to expedite subsequent rulings. The Swan Lakers must file by Dec. 28 their appeal of the August District Court ruling.

That August ruling dissolved a temporary restraining order against the Lake County Commission from granting final subdivision approval to Kootenai Lodge Estates. In October, the Lake County Commission granted the project approval two days after the Swan Lakers filed their appeal. The Supreme Court ruling essentially preserves the status quo of the legal proceedings as they stood in October, before the development was approved.

The Lake County Commission and the Milhous Group must respond to the Swan Lakers appeal by Jan. 11, 2008. The Swan Lakers must respond to that brief a week later.

Thursday’s ruling represents the latest twist in the back-and-forth over the 42-acre development that has been ongoing since June 2005. Swan Lakers, a group consisting of about 250 people living in the community surrounding the proposed development, have objected to numerous aspects of it, including the subdivision’s wastewater discharge plan and the historic significance of the Kootenai Lodge itself. The lodge was built by copper barons in the early 19th century, and numerous outbuildings are part of a National Historic District.

Lake County Commissioners were not available for comment on the ruling. Reached in Florida, the Milhous Group did not immediately return a call for comment.