Canyon project faces foreclosure
<p>An aging sign lends clues to the financial problems facing a large development once proposed in Hungry Horse.</p>
The developers behind a 900-unit South Fork Addition project in Hungry Horse are facing foreclosure proceedings brought by Glacier Bank.
According to Flathead County District Court records, Glacier Bank filed a two-count complaint to foreclose real estate trust indentures against Hungry Horse Development Partners LLC, Hellroaring Development Partners LLC, Leroy Byrd, Stephan Byrd, Byrd Family Partnership, Dennis Konopatzke, John Calandro, Charles Krause, Texas Hill Country Capital Partners LLC, Iron Horse Homeowners Association Inc. and John Does 1-5.
The first count cites a $1.55 million promissory note from March 2006 related to the Hungry Horse subdivision and guaranteed by the plaintiffs. As of April 11, the bank claims, the developers owed $1.58 million, including accrued interest and late charges.
The second count was for payment on a $268,000 promissory note backed by a lot on South Prairiesmoke Circle, in the exclusive Iron Horse subdivision in Whitefish. As of April 11, the bank claims, the developers owed $285,119, including accrued interest and late charges.
When introduced to the public in September 2006, the South Fork Addition project called for 900 units on 90 acres stretching from U.S. 2 to the South Fork of the Flathead River along the north, east and south sides of Canyon Elementary School. The developers purchased the land from the Forest Service by online auction for $2.38 million.
At the time, Stephan Byrd and Konopatzke said the project at full build-out in 10 years would include 60 commercial spaces on the highway and a mix of single-family homes, duplexes and apartment complexes.
A key component to the project was construction of a wastewater treatment plant estimated to cost $2.5 million.
The Flathead County Planning Board gave the project a negative endorsement three months after it was first announced. The board cited potential impacts on emergency services, schools and roads in the Canyon and questioned the financial viability of the project. The subdivision plan had drawn significant public criticism.
Glacier Bank has also filed a complaint to foreclose a pledge of security against Stephan Byrd, Leroy Byrd, Byrd Family Limited Partnership, Iron Horse At Whitefish LLC and Iron Horse Golf Club Inc. The bank cited a promissory note for $81,900 to be used for an Iron Horse Golf Club membership. Including interest and penalties, the amount owing on April 7 was $83,347.
In all three cases, Glacier Bank accelerated the payment schedule, and some of the plaintiffs signed as guarantors in subsequent loan documents.
Kalispell attorney Rich DeJana filed an answer to the complaint on behalf of Konopatzke, Calandro, Krause and Texas Hill Country Capital. The filing included a cross claim against Hungry Horse Development Partners, Leroy Byrd, Stephan Byrd and Byrd Family Partnership. Claiming Hungry Horse Development Partners is the principal for the debt in count one and Hellroaring Development Partners is the principal in count two, DeJana asked for a trial to sever the claims.
Kalispell attorney James Bartlett, representing Glacier Bank, filed a motion for summary judgment and argued against severance.
Leroy Byrd responded to a summons pro se, but one of his documents was rejected by Flathead County Clerk of Court Peg Allison for not meeting legal standards. Stephan Byrd could not be located, so a summons was published in the Daily Inter Lake. Both Byrds are from Spokane, Wash.