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Eagles Landing Resort has been mired in controversy as it seeks a conversion to a Planned Unit Development. (Sarah Smith / Enterprise)

Resort case before Appeals Court; owners seek new variance

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As a contentious lawsuit over the number of docks allowed on residential developments winds through the Minnesota appeals court system, the defendants are now asking Hubbard County's Board of Adjustment for fewer moorings than are at the center of the litigation.

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The lawsuit over docks at the former Eagle's Landing Resort on 5th Crow Wing Lake has now mushroomed, with the parties asking the Appeals Court to decide issues such as who can appeal a variance decision they don't agree with.

At the outset, the fight was whether the BOA had a reasonable basis to grant the 11 docks and what factors a zoning board should use in granting or denying a variance.

New legal issues

The lawsuit asks the court to determine issues such as property rights in residential lakeshore developments. Should owners in a PUD have the same rights as a resort if it's the same property? Both sides in the suit are seeking clarification on this point.

When Eagle's Landing began the conversion to Rice Bay Owners Association in 2009, the resort had been operating with 11 docks. The conversion envisioned creating five new lots, adding to the six resort homes already there, so the owners asked for a continuation of the 11 docks.

But a residential Planned Unit Development can only have one dock per unit in the first tier of development under shoreland ordinances, plus a day launch site.

That meant Rice Bay had to do without eight of its docks.

Owners Dan and Donna Rehkamp said they couldn't market the properties if each cabin owner didn't have a dock. After all, they said at the Board of Adjustment in 2010, people buy lake properties to use the lake. Lakeside homes without lake access wouldn't be particularly marketable, the Rehkamps maintained.

Hubbard County's Planning Commission granted the PUD conversion, but with only three docks since that body didn't have the power to deviate from the ordinance.

So Rehkamps sought a variance from the ordinance through the BOA, which then granted the couple the original 11 dock slips.

The lawsuit followed against the Rehkamps and Hubbard County, filed by 5th Crow Wing resident Ed Mutsch, the Middle Crow Wing Lake Association and the Hubbard County Coalition of Lake Associations.

District Judge Paul Rasmussen vacated the variance, leaving Rice Bay with three docks. The appeal followed, since both sides say several legal issues remain.

What's an aggrieved person?

Mutsch did not attend any of the hearings leading up to the Rice Bay conversion and variance application.

Neither did any members of the Middle Crow Wing Lake Association or COLA.

And now the defendants are essentially saying those groups have no right to file a lawsuit, no legal standing.

Their objections should have been voiced at any of the five public meetings before three county boards, the defendants maintain.

COLA says because it represents the community as a whole in its fight to keep area lakes clean, it has every right to sue if developments have the potential to harm a lake's health.

The defendants say public bodies can't address grievances that weren't brought up at the meeting, so those after-the-fact issues are moot in a legal battle.

Only "aggrieved persons" can sue under Minnesota law. If citizens don't complain about government actions at the meetings at which those actions are discussed, are they really aggrieved?

If COLA members other than Mutsch don't reside on the lake do they suffer actual or direct harm as a result of the BOA's decision? If not, they should stand on the sidelines, the defendants say.

No way, COLA responds. Citizens do not forfeit their rights if they can't attend a public meeting. Inaction doesn't nullify a citizen's right to seek redress, the plaintiffs say.

COLA members have tangled with the county over site visitations of properties seeking a variance, and the short time they're allowed to speak at those public hearings.

"I think it's a basic citizen's right to have access to the property you will make a decision on," COLA representative Chuck Diessner told the county board recently.

The BOA has enlarged the public comment time from three to five minutes.

Should lake use matter?

One of the issues that likely won't be settled is whether resorts or permanent residential structures are harder on a lake.

Dan Rehkamp was quite vocal during the conversion, maintaining resort guests tend to use the lake from dawn until dark since they're only there a limited time. They also don't take the pride of ownership a taxpaying resident might have in the same piece of property, he claimed.

Rehkamp said year-round residents use the lake much less and he can prove that through the sale of his first PUD unit.

COLA representatives say there are trade-offs for the increased density and year-round use a PUD puts on the lake. One of those trade-offs apportions docks to units nearest the lake on a one-to-one basis.

But actual lake use isn't a factor in granting a variance, they maintain.

Does lake use mean the status quo of a resort shouldn't be maintained even if the units are sold off individually?

Repeated boat launchings are hard on the aquatic environment, DNR Fisheries supervisor Doug Kingsley maintains, more so than a boat sitting at a mooring all season. But he said his opinions are his own, not necessarily those of the DNR.

With many resorts being taxed out of business and unable to sell due to tightening lending policies, are resort owners now being discriminated against because they can't unload their properties or subdivide them? Dan Rehkamp wonders.

Discrimination against PUDs

Much of the discussion throughout the Rice Bay conversion dealt with a "class" issue and drew heated reactions from both sides.

Are PUD owners lower class than lake property owners with multi-million dollar properties?

That's another issue the appeals court likely won't touch with a hot poker.

During a recent hearing to amend some of the county's shoreland ordinances, the class issue reared its ugly head as a resident questioned "why a bunch of Potato Lake property owners" cared more about the lakes than a PUD owner on Little Sand, and why those Potato Lake people were dictating zoning conditions for all of lake country?

Should PUD unit owners have the same rights as cabin owners just because ownership of the same property has changed?

Hubbard County board member Lyle Robinson put COLA president Dan Kittilson on the spot recently when the commissioner questioned a PUD conversion on Little Sand Lake.

If permanent residents aren't banned from possessing more than one boat and a single dock, why should PUD residents be constrained, Robinson asked. Kittilson lives on Little Sand.

Also, in variance evaluations, a board looks at whether the landowner created the need for the variance. If so, that's reason for denial.

So if that landowner wants to sell off units individually, did that landowner create the need by presenting a non-conforming conversion that could not meet the ordinance?

Seven docks

On Aug. 11, the Rehkamps are seeking permission for seven permanent docks, three of which would be for the second tier units at Rice Bay.

Rehkamps have also argued they've done everything in their power to follow county rules and they're frustrated they're still fighting the issue nearly two months after they started.

At the county's recent s public hearing on amendments to the shoreland ordinances, Dan Rehkamp said a "common sense" approach should prevail in the county.

"You need to go after the people that blatantly break the rules," he suggested. "That's the bigger issue. This is simple."

If the BOA acts on the seven docks while the Appeals Court goes in a different direction, will the controversy on 5th Crow Wing ever be resolved?

On that matter, all of the parties agree: It's anyone's guess.

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Sarah Smith is the outdoors editor. She covers Hubbard County, courts and breaking news.

(218) 732-3364
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