A Bozeman-based development company is suing Whitefish after the City Council denied a permit for a condominium project proposed on Whitefish Lake.

Attorneys for Lakeshore Group LLC claim the council was “arbitrary and capricious” in denying a conditional-use permit last month for the lakefront project. The lawsuit was filed Nov. 4 in Flathead County District Court.

“The City Council abused its discretion in denying Lakeshore’s request for a CUP,” the lawsuit alleges. “The information purportedly relied upon by the City Council in rendering its decision is so lacking in fact and foundation that it is clearly unreasonable.”

The Whitefish City Council last month shot down Lakeshore’s proposal to construct six condominium units along Whitefish Lake on a vacant lot at 1340 Wisconsin Ave.

Siding with neighbors who said the project is too dense and poses a risk to the lake, the council unanimously denied a conditional-use permit request.

Lakeshore’s plans include an accessory building along the north of the property with six enclosed garage parking spaces and an area on the second floor defined as “bonus space.” The project on .8 acres would include a total of 14 parking spaces.

The property is zoned WR-3 for one-family or multi-family housing. According to city planning staff, the zoning would allow for up to four units, but because the developer is proposing more, a conditional-use permit is required.

The project received a recommendation of approval by the city planning board.

Council members were concerned about the bonus spaces and the project’s potential impacts on the lake.

“I can’t comfortably approve the application as presented,” council member Jen Frandsen said at the Oct. 4 meeting.

Council member Richard Hildner said he originally was in favor of the proposal but changed his position after hearing from neighbors.

“I came in here thinking I was ready to approve this,” he said at the meeting. “I’ve since been confronted with a whole new set of issues.”

Lakeshore’s attorneys argue that the proposal “substantially conforms to all of the criteria standards” set out in city zoning standards.

“The City Council’s decision to deny the [permit] was not based upon correct findings of fact,” the suit claims.

The developers are asking the court to grant the permit, and for recovery of damages, costs and legal fees in an amount to be determined.

Attorneys for Lakeshore Group are William VanCanagan and Joseph Casilla of Datsopoulos MacDonald & Lind P.C. in Missoula.

Flathead District Judge David Ortley will consider the complaint.