The Powder Light subdivision: Where developers hope a lawsuit will clear the way for more affordable housing in Big Sky.

Suing for pillows

Another lawsuit invites a judge’s gavel to hammer out some of Big Sky’s affordable housing issues
“This is an issue of fairness. You can’t do to this applicant what you haven’t done for others.” —Lauren Waterton, planner working on the Powder Light proposal

Just after the Gallatin County Commission shot down his planned commercial subdivision, Realtor and Developer Scott Altman buried his frustration under a friendly smile. The project included as many as 40, four-bedroom units. All would be priced below what the market extracts in Big Sky because Altman says he’s on a mission to provide more pillows to local workers by developing new affordable housing. 

Altman exited the elegant meeting room where the commission convenes atop the Gallatin County Courthouse and slipped into a side conference room away from supporters and opponents who were also leaving an at-times contentious hearing on Altman’s planned Powder Light project. Altman wants to build it just downhill from Ace Hardware, along a new road Altman constructed without county permission, running parallel to Highway 64.  

“We were trying to be ahead of the game, so that’s on us,” explained Altman when pressed by Commission Chair Don Seifert about why he built the road without county approval. From there, the commission hearing started to unravel for Altman’s project. He and a clutch of other affordable housing advocates listened as Commission Chair Seifert told everyone that actually, the meeting was not about affordable housing.

“That is not the subject before us,” insisted Seifert. 

Big Sky Chamber of Commerce CEO Candace Carr Strauss offered a counter point, voicing what many who had driven down from Big Sky were thinking. She spoke in favor of the Powder Light proposal, explaining that employee housing is a community priority so it needs to be factored into the county approval process for new development.

“They are inextricably linked,” said Carr Strauss. “We can’t talk about one without the other. Please don’t disconnect those two thoughts.”

But in a unanimous 3-0 vote opposing the project, the county commissioners sent Altman packing, and in the side conference room minutes later, he vented. 

“It feels like they don’t care about Big Sky at all,” said Altman of the county commissioners. “They say they’re listening and they’re all about the safety, but they’re definitely not. It’s been four years. Four years. Yeah, the planning department has made us change our plan four times, they keep changing things, keep extending things. Four years in and we’ve done everything they’ve asked us to do. Yet they come up with some other reason not to do employee housing in Big Sky. That’s our whole intention of the whole thing is about affordable housing.”

When asked about options going forward, Altman thought aloud, “It’s zoned commercial. So we could do one big ass commercial building, but that’s not our intention. We’ll have to look at our legal options and see what we have to do. It could be a lawsuit.”

That all happened on Nov. 14. On Dec. 13, just ahead of the 30-day deadline for appealing the commission’s decision, Altman and his business partners filed a lawsuit claiming the Powder Light project was unlawfully rejected. The development partnership behind Powder Light is identified as A2LD in court papers and Altman said the group is about $1 million into the development, which now looks like it’s either headed for a pre-trial settlement or a judge and jury. 

 

WHO PAYS FOR TURN LANES? 

At the heart of the suit is Gallatin County’s insistence that A2LD install two turn lanes on Highway 64 so any additional traffic generated by the Powder Light development won’t create safety problems for the already congested road connecting much of the Big Sky community with rest of the world. Those turn lanes cost about $500,000 apiece and that extra expense would erase the “affordable” margin from the project, said Altman. 

The Powder Light proposal tried to address traffic safety concerns by earmarking $25,000 to cover the initial engineering costs that go into creating a new Rural Improvement District. This could ultimately pay for not only the Powder Light turnouts, but turnouts by the Big Sky Medical Center, Roxy’s and elsewhere up and down Highway 64. 

Because this is a state highway, alleges the A2LD lawsuit, it is not under the jurisdiction of Gallatin County. So, according to the suit, it’s unlawful for the county commissioners to require a single developer to foot the bill to fix a traffic problem that’s affecting the entire length of a state road. 

At the Nov. 14 hearing, the county commissioners didn’t buy this argument and brushed off Altman’s plan to create a “community wide solution” with a new mix of RID and other funding, some of it similar to the financing behind the stoplight at Town Center. 

Commissioner Joe Skinner zeroed in on the funding and said, “I don’t find the RID to be a solution.” Skinner sensed the Powder Light project was trying to drag “the whole of Big Sky into an RID.”

White agreed, “The RID is indeed inappropriate.”

Lauren Waterton, a planner who helped craft the Powder Light proposal, explained how the plan produced a “win, win, win” by kicking off a community effort to solve the Highway 64 problem through RID funding and possibly other sources, like the pending federal TIGER grant. 

Waterton added, “This is an issue of fairness. You can’t do to this applicant what you haven’t done for others.” 

Commissioner White defended the county’s turn-lane condition, citing previous requirements put on developers, like those who paid for expensive road improvements on the way to creating the luxury Black Bull golf neighborhood. However, those supporting the Powder Light proposal say that’s not an apples to apples comparison. The Black Bull improvements were to a county road and the associated cost could be absorbed by this exclusive real estate development. 

Simply put, Black Bull was not an affordable housing project looking to shave costs out of necessity. Mindy Cummings, an attorney representing A2LD, added, “They (the county commission) had jurisdiction over the county road. This is a state highway.”

Town Center Master Developer Bill Simkins, along with others with ties to Big Sky, submitted letters in support of Altman and his plan for Powder Light. 

Simkins’ letter told commissioners: “Since Highway 64 is the ‘backbone’ of the entire transportation and economic system in Big Sky, it logically follows that improvements to this road shall be done comprehensively by the Montana Department of Transportation (preferably), or through a public-private partnership that includes a combination of the many stakeholders such as MDT, both Madison and Gallatin Counties, potential federal and other grants, Resort Tax, RID, private foundations, private stakeholders, etc.”

Simkins’ letter goes on to note how the recent Big Sky Transportation Study recommends using this kind of combo funding strategy.

“Requiring one applicant, one real estate developer, to install improvements to Highway 64 is not the right approach,” Simkins stated in his letter to the commission. “I strongly believe that the right approach is to plan, design, fund, and build these improvements over time using community-wide solutions.” 

Altman said that’s what he and others involved in the Powder Light project were doing when, back in 2016, they applied for approach permits allowing them to build entrance and exit connections to Highway 64. But then, a year later, the Big Sky Transportation Study came out, raising safety concerns about pouring more traffic onto Highway 64. 

MDT received a copy of the study in July, followed by emails from Gallatin County Planner Tim Skop, who asked MDT officials to respond to it. 

In a July 11 email, Skop requested that MDT please look over the traffic study because, “It is definitely not too late to make requirements of the developers.”

This communication between Gallatin County and MDT was happening behind the scenes and without input from A2LD, said Cummings, who added at the time, “We think we’re going to be on the county commission hearing schedule for August. We thought we’d have a hearing in August and be done with all this. Remember, we’re years into this project.”

 

BUILD UP TO SUIT

By the end of August, it initially looked like the Powder Light project was on track. MDT approved and signed the Powder Light approach permits on Aug. 28. But then, according to the recently filed court documents, the next day, Aug. 29, MDT Transportation Planner Jon Burnett sent a letter to County Planner Skop. It said, “MDT concurs with and supports the recommendations in the (transportation study) to install left turn and right turn easements at both approaches to the Powder Light Subdivision.”

In other words, from A2LD’s point of view, it looks like MDT was allowing the project to go forward one day, then stopped it in its tracks the next with a condition that would add $1 million in turn-lane construction costs. 

“Our engineers reached out for clarification and (MDT) never responded,” said Cummings. 

Dave Ohler, chief counsel with MDT, said he wasn’t familiar enough with the Powder Light proposal and recently filed lawsuit to comment on either. “The dispute is between the county and the developer,” said Ohler.

 This dispute was supposed to be settled on Sept. 18, said Cummings, when A2LD gathered with Gallatin County staff on the second floor of the courthouse.

The recently filed suit states that at this meeting, it was A2LD’s understanding that “MDT could not revoke the permits nor require the turning lanes… In addition, it was confirmed that Gallatin County did not have jurisdiction over” Highway 64. 

“We thought we had clarified it,” said Cummings. 

Two months later, going into the county commission plat approval hearing on Nov. 14, Altman and his attorneys hoped they could show the state’s MDT approach permits paved the way for the commissioners to approve the Powder Light project. But safety concerns raised in the transportation study ultimately motived the commissioners’ three no votes, making Powder Light the second affordable housing project to be derailed in 2017 by a dispute over who will end up paying for road improvements.

Before voting down Powder Light, Commissioner Skinner shrugged his shoulders and asked, “Let’s ignore safety because this is for employee housing?”

The A2LD team tried to push back, arguing that safety was addressed in the Powder Light proposal through the community-wide RID. 

Cummings added, “Even if A2LD did put in the turning lanes, it’s not going to solve the problem and could make it worse. Because the traffic flows need to be addressed for the entire corridor described in the 2017 Big Sky Transportation Study. I think the transportation study was a wakeup call for MDT.”

Still up in the air is if MDT will consider Highway 64 a priority. “They have the responsibility to address the needs of the transportation systems under their jurisdiction, but they have been remiss in addressing improvements to Highway 64 that are needed to keep up with the growth in Big Sky. Big Sky is an economic driver for this state. They need to respond in a timely way. And one benefit of the lawsuit is you can subpoena MDT to respond,” said Cummings.

In the final “Next Steps” section of the 2017 Big Sky Transportation Study—which was funded by the Big Sky Chamber of Commerce and put together by the firm Sanderson Stewart—it’s noted that “MDT has designated Highway 64 as an off-system route and they subsequently have no dedicated source of funding available for improvements to the highway… It is recommended that additional, on-going discussions take place between local stakeholders… to identify the most appropriate funding source for individual projects and to secure the funding needed to move these projects forward.”

With its suit, A2LD is amplifying the effort to find a source of funding. The suit alleges that when it comes to paying for improvements on a state highway, the Gallatin County Commission, “cannot lawfully shift that burden upon the applicant and then deny an application for failure to mitigate impacts and/or impose requirements outside of its jurisdiction.”

Gallatin County Attorney Erin Arnold would not comment on this or other issues raised by A2LD, saying the county commissioners had not yet been served with the suit. She also said the county would likely seek outside counsel to handle the matter. 

 

LOOKING AHEAD

A2LD isn’t alone in its woes with the county commission. On Feb. 28, Big Sky residents showed up on the third floor of the courthouse in Bozeman to voice their support and opposition to the Bough Subdivision between Upper Whitefish Drive and Bobsled Trail. Commissioners voted the proposal down because, as with Powder Light, it did not include plans to pay for expensive road improvements. 

Recently, Lone Mountain Land Company stepped in as a consultant to revive the Bough Subdivision proposal and resubmit it for plat approval before the county commission. This time, it is not necessarily being touted as an affordable housing project.

Lone Mountain Land Company’s Jon Olsen recently briefed the Big Sky Water & Sewer District about the project, saying, “We’re going through the preliminary plat process similar to what any subdivision would within Gallatin County. It’s a complete start from scratch.” The site plan has been redesigned from the prior submittal.

 Olsen added that the owner, Loren Bough, “is very committed to doing something positive with the community, we just don’t know what it’s going to look like until we have county approvals and can better evaluate project costs.”

 In other words, the Bough Subdivision could still turn into affordable housing, but before that comes into focus, the plan is to secure approval from the county and avoid the same hang ups that stalled the project earlier this year. 

While the project moves forward, a lawsuit filed against Bough by a developer with adjacent property continues to churn through Gallatin County District Court. On the same day Scott Altman and his A2LD development team filed suit against the county commission, more documents were filed in the legal tussle between Bough and Packy Cronin.  

In all, 224 documents relating to litigation over affordable housing were filed on Dec. 13 alone. This latest volley of filings adds to a growing list of uncomfortable subjects raised in the legal back and forth between Cronin and Bough. These include complaints about professional conduct, along with charges of conspiracy, extortion and an ethics complaint filed against County Commissioner Steve White. 

On Dec. 18, the Montana Attorney General’s office reported that the complaint against White was in the hands of the Montana Department of Criminal Investigation, which should wrap up its work before Christmas. 

“The investigative report will be finalized this week and then turned over to the Cascade County Attorney,” wrote AG Spokesperson Eric Sell in an email. Cascade County is handling this case because Gallatin County Attorney Marty Lambert chose to recuse himself.

So it looks like the ethics complaint against White won’t be crowding the docket in Gallatin County Court, but litigation involving affordable housing will continue to make its way through the system. 

While Commission Chair Seifert wouldn’t comment on any of the potential and pending litigation, he struck a sympathetic tone when asked about how the community of Big Sky might achieve the widely shared goal of creating more affordable housing. 

“We are aware there is an affordable housing issue in most of Gallatin County,” said Seifert. “We know that housing is expensive. I don’t know what the solution is. There’s a limited amount of things the government can do to make housing affordable. We could maybe do some zoning changes but it is going to require the community to come forward and suggest those changes.”

Seifert went on to say there’s nothing in Montana state law that encourages county commissioners to get behind affordable housing proposals: “We have criteria that we base decisions on. And those criteria are based in state statute. Without changing state statute, I don’t believe that can happen without a change in Helena.”

Bringing light to new options and strategies is one of the goals of the current workforce housing survey. The homepage for the survey explains how, “The Resort Tax Board, with the Big Sky Community Housing Trust and Big Sky Chamber of Commerce, has funded a study to better understand the housing needs of residents and workers in Big Sky and develop solutions to address those needs.” 

In 2017, lawsuits over affordable housing have filled the void created by a lack of solutions, and as Scott Altman said moments after watching his Powder Light proposal get rejected by the county commission, “We are now back to square one. No employee housing coming.”  

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