As New Owners Await Approval to Buy Historic Holland Lake Lodge, Flathead Forest Triggers Permit Review

New investors are standing by at Holland Lake Lodge awaiting authorization to purchase the century-old Swan Valley resort, but first the Flathead National Forest must grant them a special use permit to operate the lakeside business on public land.

Having received the application last October, Forest Supervisor Anthony Botello this week ushered in an environmental review process when he proposed authorizing a 20-year permit to Utah investors Eric Jacobsen and Thomas Knowles. Doing business as Holland Peak, LLC, the prospective new owners have a purchase agreement in place with the lodge’s current majority shareholder; however, the existing special-use permit automatically expires with a change in proprietorship, requiring reauthorization by the U.S. Forest Service.

“These permits do not transfer,” Botello said Tuesday during a video conference call with the Beacon. “They end with the selling owner.”

Under the new permit application, Holland Peak, LLC, has requested special use authorization to operate the lodge in its existing footprint on national forest land, providing guest accommodations, dining and beverage services (including the sale of liquor), hosting special events, and offering canoe and kayak rentals. Staffing would include a full-time lodge manager, a full-time maintenance manager, and a food and beverage manager. The resort would operate seven days a week from June through October.

Last reissued in 2017, the permit is reviewed annually. But approval of a new permit application requires environmental analysis under the National Environmental Policy Act (NEPA), including the opportunity for comment.

Forest officials are accepting comment through May 7, and scheduled a community meeting on April 17 at the Swan Valley School in Condon from 5:30 p.m. to 7:30 p.m.

The smaller scale of the new plan under review distinguishes it from a high-profile expansion proposal in 2022, Botello said, recalling the fraught administrative review process that drew more than 6,000 public comments from elected officials, conservation advocacy groups and individual stakeholders, while also prompting a region-wide “Hands off Holland Lake” campaign.

That development proposal was submitted by Utah-based adventure-lifestyle company POWDR and included plans to triple the lodge’s nightly capacity by building a new 28-room lodge and 26 cabin structures.

Ultimately, discrepancies in POWDR’s permit application, as well as questions surrounding the shareholder structure, timeline of the sale and shortcomings of the review, led the Forest Service to reject the plan. In October 2023, Christian Wohlfeil, the longtime owner of Holland Lake Lodge who retained his majority share, listed the resort at a sales price of $3.5 million, eventually receiving an offer from Jacobsen and Knowles.

Although the controversy surrounding POWDR’s proposal erupted under Botello’s predecessor, former Flathead National Forest Supervisor Kurt Steele, the new top forest official said a key difference in the current plan under review is that it does not call for an expansion or increased use of the property.

“There is no proposed expansion of Holland Lake Lodge with this proposal and only minor maintenance of existing facilities is proposed focused on public and employee safety,” according to Botello’s April 7 scoping letter announcing the proposal.

“It is an application that essentially seeks the same permitted uses that have always been associated with Holland Lake Lodge,” Botello told the Beacon. “They have to be on board with every term and condition of that permit because they are essentially going into a business partnership with the U.S. Forest Service. We go through it clause by clause.”

Reached by email, Jacobsen, of Holland Peak, LLC, said he’s bound by confidentiality in the purchase agreement, and declined to comment on the permit application. But in a series of meetings he hosted last fall at the Condon Community Center, Jacobsen offered assurances to Swan Valley residents.

“I’m here because I care,” Jacobsen, who grew up in Great Falls and divides his time between Whitefish and Park City, Utah, told residents last September. “My intent is to preserve and sustain the lodge experience.”

But Jacobsen offered scant details about his plans to optimize the business, which under longtime owner Christian Wohlfeil has endured more as a cherished community haven than a profit-generating business venture. Speaking last fall, Jacobsen, a private equity investor who founded the firm Gratitude Railroad, where his business partner and co-applicant Knowles also works, said he does not intend to expand the operation’s footprint, and in his email on Tuesday he again took care to distance himself from POWDR.

“I think you will find we are quite different from the prior applicants,” he stated.

Yet it still remains unclear when and to what degree the lodge will reopen if the Flathead National Forest approves the special use permit. Last year marked the historic lodge’s centennial anniversary, but it did not provide public services due to serious deficiencies with its outmoded wastewater treatment system, which serves the lodge and the 42-site Holland Lake Campground and associated dump station.

In October 2023, a site inspection by the Montana Department of Environmental Quality and Missoula County revealed a leak in the system, forcing it offline. On Tuesday, a Flathead National Forest spokesperson said a new system is still undergoing a feasibility study following a geotechnical investigation last November. Finalization of that report will likely be in the late spring or summer. The Forest Service will conduct an environmental analysis and decision making prior to moving forward on the replacement project, which will include an opportunity for public comment.

“It is unlikely that the wastewater treatment system will be fully functional by this summer recreation season,” the spokesperson, Kira Powell, said.

If a permit is issued to the potential buyers, this summer’s operations may include a set of scaled back activities than can be provided with limited or temporary wastewater facilities, Powell said, giving as examples weddings, boat rentals, and limited food and drink services. All operations would be required to be consistent with the terms and conditions of the permit as issued by the Flathead National Forest, she said, and would be described in an agency-approved operating plan.

According to a DEQ spokesperson, the agency has received the Flathead National Forest’s preliminary design report for upgrades to the Holland Lake wastewater treatment system. The project involves reconstructing and re-lining the existing wastewater treatment lagoons, improvements to the existing effluent irrigation system, and removal and disposal of accumulated biosolids from the existing lagoon cells.  

“The project does not include an increase in the wastewater flow rates, so the system will be limited to its current capacity,” according to the DEQ spokesperson, Madison McGeffers. “This means that major expansion of the Lodge or Campground would not be allowed.”

Construction plans and specifications for the proposed upgrades still need to be submitted to and approved by DEQ prior to beginning construction, according to McGeffers.

Meanwhile, Powell said forest officials plan to upload the existing permit to the online Holland Lake Lodge project file; however, officials are still determining “what non-proprietary information from the new application can be shared online.”

According to a statement from the Condon-based nonprofit Stewards of the Swan Valley, those are precisely the kinds of details the community deserves during the scoping period.

“Stewards of the Swan Valley, and other members of the public, will ask the U.S. Forest Service for the specific details on this proposal to grant a new permit to these Utah businessmen. We’ll ask the tough questions to make sure that we protect our public land and can determine what these new owners propose to do with this Swan Valley and Montana icon – Holland Lake Lodge – on our public land,” according to the statement from Grace Siloti and Fred Clark, the group’s president and vice president, respectively. “Any new business there should be respectful of our land, the clean air and water, wildlife and open spaces that make Montana so special. The previous attempt to triple the size of the lodge and create a destination resort at Holland Lake met strong public opposition. The public has spoken, and will again, and wants to ensure our access to this public land and keep it safe from overdevelopment.”

Meanwhile, Botello said the agency’s preliminary assessment, including technical, environmental and financial screenings of the permit application, “appears to be consistent with a categorical exclusion,” exempting the project from documentation in an environmental impact statement or an environmental assessment under NEPA.

“While this specific type of categorical exclusion does not require a project file or decision memo, I do plan on documenting the decision including the determination whether the proposal meets the above category and whether there are no extraordinary circumstances related to the proposal,” Botello wrote in his scoping notice. “I will determine whether any extraordinary circumstances are present while assessing the proposal, and if so, what degree these potential effects may have on these resources. Additionally, I will also affirm whether the proposal meets our forest plan direction and other applicable laws.”

Anticipating questions surrounding his decision to assign the project a categorical exclusion, or CE, Botello said the tier of analysis prescribed under a CE has been misunderstood.

“There’s a little bit of stigma and misunderstanding about this process,” he said Tuesday. “In some cases there are special use authorizations for projects that we’ve renewed so many times that we don’t expect our initial determination, our finding of no significant impact, will change.”

“But that doesn’t mean there’s no public involvement or analysis,” he continued. “In fact, there is robust public involvement and analysis to determine whether the recreation opportunities this project affords will benefit the public. It is at a lower level than an environmental assessment or environmental impact statement, but it still requires public involvement. I think some of the mystique around a CE is that it somehow escapes the requirements of NEPA. That is not at all the case. We are still required to perform a level of analysis, and we’re excited to conduct public engagement to inform our decision.”

To submit a comment or for more information about the application, visit the Flathead National Forest’s projects page and select Holland Lake Lodge Special Use Permit Issuance Proposal.

This story has been updated to include comment from a Department of Environmental Quality spokesperson, as well as clarification from a Flathead National Forest spokesperson on the potential scale of operations that visitors to Holland Lake Lodge can expect this summer.

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