Flathead County will pay $1 million in cash to settle a land-use lawsuit filed against the county by developers of the North Shore Ranch subdivision near Somers.

The county also will be required to build and pay for all the subdivision roads and two highway turn lanes on Montana 82, an undertaking that could push the settlement total to $3 million or more.

A tentative agreement posted Tuesday on the county’s Web site indicated the cash settlement will be made in three installments — $500,000 upon final court approval and two $250,000 payments due on Feb. 1 in 2011 and 2012.

Commissioner Joe Brenneman confirmed that the county will take money from its building fund to pay the Kleinhans Farms Estates limited liability corporation, which includes developers Sean Averill and Keith Simon. Brenneman said the county had been setting money aside to build an additional administration building when the time came to expand.

A public hearing at 9 a.m. on March 1 at the commissioners’ chambers in Kalispell is part of the agreement. The hearing will give the public an opportunity to comment on the proposed settlement. Parties on both sides said they cannot speak specifically about the case until after the hearing.

The proposed settlement also provides for the approval of a modified subdivision plat for North Shore Ranch that would scale down the development and increase the open space.

The public will have an easement for access to about 150 acres of open space that could be used for hiking, bird watching and activities consistent with the nearby Flathead Waterfowl Production Area along the north shore of Flathead Lake.

The lawsuit stems from the commissioners’ denial of the original subdivision plan that proposed 286 lots on 364 acres bordering the waterfowl production area near Somers. Brenneman and then-Commissioner Gary Hall voted to deny preliminary plat approval while Commissioner Dale Lauman supported the project.

At the time, Brenneman said that as a matter of policy, he didn’t think the county could approve a preliminary plat that had flood easements attached to the property. And Hall contended that if a flood occurred, the county could be held liable for approving the development.

The proposed subdivision also had encountered significant public opposition.

The lawsuit contended the commissioners’ decision was not legal and contradicted Planning Office findings of fact. The Flathead County Planning Board in 2008 recommended approval of the subdivision and said there were no legal grounds to deny the project, even though some board members took issue with the project’s density.

Missoula attorney Bill VanCanagan, who represented Averill and Simon, noted at the time the lawsuit was filed that the developers not only met the requirements but also exceeded them.

“The work the developers undertook on this project is unprecedented,” VanCanagan said in a 2008 interview. He did not return calls this week from the Daily Inter Lake.

THE PROPOSED agreement requires $600,000 of the $1 million settlement to be allocated for the purchase of an easement giving public access to about 150 acres.

In the event the developers sell the property, they would have to reimburse the county the $600,000. The remaining $400,000 is a cash remuneration for the developers.

The county must agree to construct at its cost the internal road network in the revamped version of North Shore Ranch, which would include roughly three miles of road at full build-out.

At a going rate of roughly $500,000 per mile, it would cost the county $1.5 million to meet that requirement. Also mandated is the construction of two turning lanes from Montana 82 into the subdivision. Local engineers conservatively estimated it would cost the county $400,000 per turn lane to build them to state standards.

Brenneman said money for the road construction requirements of the settlement would come out of the county’s road department budget.

Further stipulations in the agreement would sharply limit the county’s ability to zone the property without the developers’ consent.

According to court documents, the county denies any liability for damages and maintains that neither the settlement nor the negotiations for settlement “shall be considered as an admission of liability by Flathead County.”

The consent decree finalizing the settlement will be filed in District Court within 48 hours of the public hearing, the agreement states.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com