30 percent slope case isn't over yet

By RICHARD HANNERS

Whitefish Pilot

A professional appraisal for homeowners who are suing the city after it turned down their plans for a Whitefish Lake home claims the property lost about 87 percent of its fair market value because of the city's stormwater urgency ordinance.

William Frazier, of Frazier Appraisal Services, in Whitefish, concluded that the three lots on Houston Drive that William and Theodora Walton bought on Sept. 15, 2005, for $4 million are worth only $650,000 after the urgency's ban on building on steep slopes is taken into account.

He also determined that the Waltons' property is worth $5.3 million, according to its current fair market value. The result of enforcing the urgency ordinance created an estimated compensation via a "taking" of $4.65 million, based on the current fair market value determination.

When the stormwater urgency ordinance was adopted by the Whitefish City Council on April 17, 2006, it included "slopes in excess of 30 percent" as a critical areas component, along with setbacks for rivers, lakes and wetlands.

The Waltons' architect presented a site plan for the couple to the city planning office on April 25. Former city planning director Bob Horne, acting as the zoning administrator at the time, denied their request on April 28, later noting that the designated building site was "in the neighborhood of 45 percent."

"The impact of the ordinance effectively 'takes' that portion of the site that provides panoramic views of the lake and the recreational enjoyment of the lakefront to create a building site that is comparable to many lake access lots found within the Whitefish marketing area," Frazier said in his report.

Frazier was hired by the Waltons' attorney, Sean Frampton, to sue the city after their appeal of Horne's ruling was denied by the Whitefish Board of Adjustment.

On May 9, Flathead County District Court Judge Ted Lympus ruled in favor of the city, denying seven claims by the Waltons that the ordinance was invalid. That left the issue of compensation for a "takings" of their property by the city. A two-day jury trial is scheduled for June 27-28.

Frazier's 30-page report compares the Waltons' property with other properties around Whitefish Lake, including neighbors to the west and east who began building homes on the same steep slopes below Houston Drive prior to the adoption of the stormwater urgency ordinance.

Immediately to the east are two lots owned by Warren Schweitzer, Gov. Brian Schweitzer's brother, which includes a home still under construction on the same steep slope where the Waltons planned to build.

To the west is one lot owned by Thomas and Alicia Haley, one lot owned by Valerie Meinhardt and Duane Bauch, and one lot owned by the Konopatzke family. The city council approved a building permit for the Konopatzkes to build on the steep slope in 2005.

By not allowing the Waltons to build on the areas exceeding 30 percent slope, the usable portion of their 2.3-acre property is effectively reduced to about 1.3 acres, Frazier estimated, but more importantly, the property was changed from lakefront property to a view lot with access.

To determine the current fair market value for the Waltons' property, Frazier compared the Waltons' purchase with nine other land sales in the Whitefish Lake area in 2005 and 2006.

"This segment of the market consistently produces some of the highest-priced real estate in the state," Frazier said.

Properties ranged in size from a quarter acre to more than two acres, with sale prices ranging from $815,000 to more than $4 million. Based on lakefront footage, prices ranged from $10,584 to $36,527 per lineal foot.

Because the Waltons' use of their land is restricted by the urgency ordinance, their property no longer conforms with the segment of the market to which it belonged when they purchased it, Frazier said, "due to lack of views and access to the lake."

To determine what their property was worth with use of steep slopes restricted, Frazier compared the Waltons' property to developments in Lion Mountain, Glenwood Estates, Houston Drive, Houston Point and Rest Haven.

The most comparable property, Frazier concluded, was a 0.83-acre lot in a 16-year-old four-lot subdivision immediately south of Rest Haven listed for $643,000. The lot is the furthest from the lake and shares 30 feet of lakefront footage with the other three lots. It has a view of the lake "but nearby residences tend to obscure the view," Frazier said.