Whitefish Subdivision Headed for Sheriff’s Sale

Lookout Ridge subject to foreclosure sale after judge's ruling

By Molly Priddy

A major subdivision on Big Mountain will be up for sheriff’s sale in an attempt to pay more than $10.6 million in overdue bills and loans, according to a recent ruling from Flathead County District Court.

The subdivision, known as Lookout Ridge, was first approved in 2007, when the real estate boom was still running high and about to crash in 2008. It includes nearly 250 acres of land, bordering the Whitefish Mountain Range and the north boundary of the Iron Horse subdivision on Big Mountain.

According to its real estate listing, the entire subdivision is for sale for $10.9 million, but will be subject to a sheriff’s sale after the subdivision went into foreclosure.

Nelcon, Inc. originally filed a lawsuit in 2010 against the subdivision developers, listed as Lookout Ridge Investors, LLC and Michael Brown, for about $860,000 worth of work the company completed on the subdivision that was never paid for.

Applied Water Consulting, LLC also asked for a judgment of about $36,000 for an overdue bill.

Eventually, Whitefish Credit Union became involved with the lawsuit, seeking the balance of the loan, worth more than $10 million, for the subdivision.

On June 5, Judge David Ortley ruled in favor of the credit union and companies, declaring that Lookout Ridge will be sold in a sheriff’s sale due to foreclosure and the money brought in will pay the amount owed to the credit union, totaling over $10.6 million.

If the foreclosure sale doesn’t bring in enough money, Ortley wrote, Lookout Ridge Investors, LLC and Michael Brown would be responsible for the balance.

Dave Taylor, Whitefish’s planning and building department director, said there may have been a few, smaller subdivisions put up for a foreclosure sale before, but he’s never seen one of this size.

The subdivision has had an embattled history, Taylor said, with its preliminary plat approval extended multiple times since its original approval in 2007, and a landslide that marred a significant portion of the property.

The lack of activity on the subdivision has been hard on the credit union as well, Taylor said.

“They’re just trying to recoup their money,” he said.

Despite this large subdivision falling into foreclosure, Taylor said subdivision activity is otherwise up in Whitefish.

“It’s definitely picking up,” Taylor said. “The last two years have been the most we’ve seen since 2007.”

This has meant several small subdivision proposals, Taylor said, because it can still be difficult to get a bank to finance a major proposal, such as Lookout Ridge.

The market and the subdivision activity seem to be righting themselves after the boom and bust of 2007 and 2008, he said.

BJ Grieve, director for the Flathead County Planning and Zoning Department, said preliminary plat subdivision activity is also on the rise in rural parts of the county, but there hasn’t been a rush on final plats quite yet.

In this same vein, many developers who got preliminary plat approval when the market was high before the recession have kept extending the preliminary stage on their projects, waiting for the market to rebound.

These projects have the potential to come to fruition now that the market is righting itself, he said.

“We have a fair bit of subdivisions out there that could come to final plat,” Grieve said.

According to the Flathead County Planning and Zoning annual report from 2013, there were 52 subdivisions in preliminary plat stage in Flathead County at the first of the year, with 73 percent of those subdivisions under extension.

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