Canyon project foreclosed
Judge orders subdivision to be auctioned
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A large parcel of premium land in Hungry Horse once platted for the 900-unit South Fork Addition project will be sold at sheriff’s auction.
Flathead County District Court Judge Stewart Stadler ordered a decree of foreclosure and sale on the 90-acre site between U.S. 2 and the South Fork of the Flathead River on Jan. 2.
In the second count of the complaint filed by Glacier Bank, Stadler also foreclosed on a lot in the exclusive Iron Horse subdivision in Whitefish and ordered it sold by sheriff’s auction.
According to court records, the complaint was filed 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 cited a $1.55 million promissory note dated March 2006 related to the Hungry Horse subdivision and guaranteed by the plaintiffs. As of Dec. 3, 2012, the developers owed $1.76 million, including accrued interest and late charges, with the amount owed increasing by $257 per day.
The second count was for payment on a $268,000 promissory note backed by the Iron Horse lot. As of Dec. 3, 2012, the developers owed $327,653, including accrued interest and late charges, with the amount owed increasing by $53 per day.
Glacier Bank had accelerated the payment schedule on both promissory notes but claims the defendants refused to pay.
The defendants purchased the Hungry Horse 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 along U.S. 2 and a mix of single-family homes, duplexes and apartment complexes with a new $2.5 million wastewater treatment plant.
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 it questioned the financial viability of the project. The subdivision plan attracted significant public criticism.
Stadler granted Glacier Bank summary judgment but ordered the exposure of the defendants to any debt left after the bank collected from the sale of the properties to be limited to 50 percent of the amount owing. The maximum exposure of each individual defendant will be $775,000.
The monetary judgment against Leroy Byrd will depend on his Chapter 11 bankruptcy proceedings. Both Byrds are from Spokane, Wash.