missoulian.com

Tom Maclay keeps hopes alive for resort proposal despite foreclosure order

By TRISTAN SCOTT of the Missoulian | Posted: Saturday, August 20, 2011 10:45 pm

One man's dream of developing a luxury ski resort on Lolo Peak seems to be fading into the ethers like a puff of windblown spindrift.

Yet Tom Maclay, the fifth-generation Montanan who carved ski runs into the iconic mountain face to foster support for his proposed Bitterroot Resort, isn't letting go of his vision, even as the odds stack up against him.

In June, a Missoula judge signed a judgment foreclosing the 2,900-acre Maclay Ranch in the Bitterroot Valley west of Florence, and ordered that it be sold in a sheriff's sale on the steps of the Missoula County Courthouse.

The order by Missoula District Judge Ed McLean came at the behest of plaintiff Metropolitan Life Insurance Co. Asset Holdings, which holds the mortgages on the historic ranch and is looking to settle a debt of more than $23 million.

But foreclosure or no, Maclay says he doesn't intend to let his project meet its demise on the courthouse lawn, and industry experts say he still has time to attract partners.

"We continue to work through the process of pairing up with investors in a market that is very active and interested at this point," Maclay said Friday. "Obviously, this has been a complicated financial time for the nation and the world, and this is not something that happens quickly. But by no means is our work done."

Despite McLean's June 9 order, the property has not transferred hands and a date for the foreclosure sale has not been set. Even once the sale occurs, the purchaser is not entitled to take possession of the land.

Instead, a one-year "right of redemption" period begins, and Maclay and his family may continue to actively search out investors and partners to buy back the land. They may also continue to live on the property so long as it is their primary residence.

"It's where I've lived all my life," Maclay said.

"This is old news," added Tim Newhart, a consultant to Maclay. "We knew that at some point the clock would start ticking. The judge's order certainly gives us a renewed urgency in finding an investor, but it doesn't change our approach. It just makes us work a lot harder."

When the foreclosure sale occurs, a successful bidder can either put up cash, or the lender can enter a credit bid, which must be less than or equal to the loan in default.

The latter is the more likely scenario, said Chuck Willey, an adjunct law professor who teaches real estate transactions at the University of Montana.

"The odds are 99 out of 100 that the party to whom the debt is owed would make a credit bid on a routine mortgage, and it is treated as though they have bid that amount," Willey said. "And if it is the debtor's primary residence, he or she can remain there through the redemption period."

Maclay and Newhart both maintain an air of confidence about the potential for attracting interest in the project, and say recent negotiations with prospective investors look promising, though they declined to name the interested parties.

"We are crossing some new bridges here, but a great deal of groundwork has already been laid in terms of working with resort planners, lift-making engineers, snow-making engineers," Newhart said. "We are not going to abandon those ties simply because of a real estate play."

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In 2005, Maclay launched his ambitious plan to transform his family's land into the Bitterroot Resort. The property has been in his family since 1883 and sits in the foothills of Lolo Peak, on the north end of the Bitterroot Valley near Missoula.

The ski community would include 2,700 upscale homes and a golf course, and Maclay cut three dozen ski runs into the base of Lolo Peak. He also built a 5,500-square-foot home and sought permission to use 11,000 acres of the Lolo and Bitterroot national forests above his own property for Nordic skiing and mountain bike trails.

The clear-cutting is easily visible from nearby U.S. Highway 93, and rankled opponents of the controversial project, who say Maclay's plans to use adjoining national forest lands for the resort are misguided.

The group Friends of Lolo Peak was energized by Judge McLean's recent ruling, which for many observers signaled an end to the threat of development.

But some observers, like Larry Swanson, director of the Center for the Rocky Mountain West in Missoula, say a ski area is better than one potential alternative - a hodgepodge of development on the two dozen parcels of land ordered foreclosed, which could lead to unsightly sprawl.

Under the terms of McLean's order the property must be sold in a single parcel, but plat maps show the property is already significantly divided. That means a buyer could take a piecemeal approach to developing the property.

Abe Abramson, a Missoula-area real estate consultant, said the proposed ski resort would build an ideal buffer between the wilderness area and development on the Bitterroot Valley floor, and believes Maclay still has the chance.

"It's no longer financially viable to raise cattle up there, and the ski area would be the perfect buffer to the wilderness area," he said. "I'm a betting man, and I'd wager there will eventually be a ski area on Lolo Peak and that the Maclay family will be involved."

Reporter Tristan Scott can be reached at (406) 730-1067 or at tscott@missoulian.com.