Flathead County commissioners approved the first phase of a forthcoming luxury Lakeside resort Thursday on a 2-1 vote.  

The decision came after the vote on the final plat for Territory 1889 Phase I was delayed three times due to pending water rights issues.  

Arizona-based Discovery Land Company is behind the 1,700-acre subdivision west of U.S. 93 in Lakeside. The members-only resort will include single-family lots, a golf course, spa, restaurants, retail stores, offices and management facilities at full build-out.  

The first phase involves constructing water, wastewater and stormwater management systems for 79 residential lots and 11 open space lots.  The subdivision is set to have 359 residential lots.  

Developers originally proposed using groundwater wells on the property to support the subdivision's water supply system. But those plans hit a snag when a use permit granted by the Montana Department of Natural Resources and Conservation for two groundwater wells got tied up in litigation.  

As a backup plan, developers signed an agreement with Lakeside County Water and Sewer District to purchase water allocation and connect to an existing water supply system.  

If the permit for the two groundwater wells does not come to fruition, developers would need to build a water extension line to an offsite connection as an alternative, according to planning officials.  

However, it's unclear whether Flathead County would foot the construction bill for the connection. Deputy County Attorney Elspeth Cooper said the county is responsible for ensuring water supply to lots in approved subdivisions. 

"It is a possibility that this could go this way," she said. "And it would leave the county on the hook for this." 

Commissioner Randy Brodehl, who cast the sole vote against the final plat, worried about the possibility.  

"We have a gap here that hasn't been filled yet," he said.  

Attorney for Territory 1889 Bill VanCanagan said the contingency plan was primarily intended to address legal concerns around fire suppression. The agreement with Lakeside for water is not what's presented before commissioners for a vote, he said.  

"The conditions to the final plat have been met here," he said. "And there's no requirement in these conditions that a secure water right be obtained." 

VanCanagan added that the potential need for a water connection line is several years down the road, after the agreement expires. It would need review and approval from the state Department of Natural Resources before going into effect. 

"It's not part of this discussion," he said. "It's a backstop." 

Plus, the litigated permit for the groundwater wells has already been approved by the state, he noted. The attorney referred to an order in June from a Lewis and Clark County District Court judge that paused the permit application.  

The lawsuit alleges state officials relied on an outdated memo in issuing permits for groundwater wells in Flathead County, questioning the availability of groundwater.  

"But the lawsuit is not complete," Brodehl said. 

Commissioner Pamela Holmquist said the letters from Lakeside County Water and Sewer District saying it will serve the subdivision put the onus on the district, not the county, to ensure adequate infrastructure. Cooper said the letters put the responsibility more on the developer, and not the district.  

"We're talking about the contingency plan here," Cooper said. "They put that responsibility on the developer to put it in place." 

Report for America Reporter Hannah Shields can be reached at 406-758-4439 or [email protected]. If you value local journalism, pledge your support at dailyinterlake.com/support.