Big Sky, big mess in Montana

Note this story package includes five related stories:

- Chet Huntley's legacy includes suppression of a free press

- Big Sky above, private land below

- How Huntley sold Big Sky to Montana

- Touring the future on Insta-Teller Road

- Armies of skiers are coming to Yellowstone

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BIG SKY, Mont. - Twenty-seven years ago, when TV anchorman Chet Huntley suffered a midlife crisis, he moved to the mountains here and created this resort town under the dreamy banner, Big Sky. Trying to explain himself, he told Life magazine, "Maybe where there's clarity of air, there's clarity of thought."

Maybe.

On a cold weekday this January, the board of directors of the Big Sky Owners Association - Huntley's successors here - gathered for their monthly meeting.

The nine directors are the closest thing this town has to a government. With their chief staffer, they sat around a king-size table in a rented room over the post office. They could look out a window that pictured Montana's leading ski resort, the related businesses that rang up a record $40 million in retail sales last year - not counting real estate - and neighborhoods where the annual household income exceeds $100,000.

It might have seemed as if Huntley's dream had come true. As meetings of Big Sky's leaders go, this one was fairly smooth until some glitches surfaced: "Is there a policy manual?" wondered a director who had been elected to his seat last August. "Where is it kept? I've never seen it before."

Discussion circled the question of new building inspection. It's important, since a fair amount of Big Sky, dating back to the early days, was built as if caffeinated monkeys had been turned loose with hammers and shovels.

The inspection process had suffered another shakeup recently, and it wasn't clear who is making sure that Big Sky's buildings are safe to occupy. One director thought Montana's state government was in charge. Another thought county governments were doing the work. Still others thought Big Sky was back to nobody doing inspections. Chairman Steve Barrett summed it up, "I don't know."

Another discussion had to do with affordable housing, also a crucial issue here. A developer proposed to put up three buildings, but his money was tight and he asked for a break on fees the association levies on all property owners. The directors weren't sure what the fees would be. Would it be $250 per year for each of the 30 units, or $250 for each building per year? Barrett, who makes his living as a lawyer, advised, "If we chose to, we could probably wordsmith our way around it."

It was mentioned that, as with all Big Sky directors' meetings, the minutes would not be available to the general public.

Then a director who makes her living as a Big Sky real estate broker declared she has an ongoing conflict of interest. Other possible conflicts of interest weren't declared. One-third of the directors, for instance, work for the resort.

No one mentioned two ongoing crises around town: a central water system that resembles a Yellowstone geyser - either gushing leaks or a dry hole - and a class-action lawsuit brought by the owners of 141 condos against the developers.

There was also no impolite mention of the lawsuits in which the directors were attacking each other. One director has a couple of lawsuits going against the owners' association board as a whole, another director had a different lawsuit going against the board, and the board was countersuing.

Finally, the directors decided to kick out the small audience, declaring an executive session so they could discuss yet another of the lawsuits that pops up to challenge every move in this resort town.

Meanwhile, Big Sky is poised for a growth eruption that would double or triple the total development here.

Plans include creating a new resort, a grid of European-style ski runs connecting mountains, a 10-story hotel that would be one of Montana's tallest skyscrapers, helipads on residential lots, enough rooms for 30,000 people or more, so Big Sky might finally become what Chet Huntley promised, "the greatest thing that ever happened to Montana ... bigger and better than Aspen, Vail, Sun Valley."

You have to wonder, given Big Sky's track record and its ad hoc style of government, whether it can handle so much growth.

The test site

Huntley made a lot of promises in the early 1970s, but chief among them was the promise that his resort would exist with a minimum of government.

"I thought I was the classic liberal ... I'm certainly not an economic one anymore," he told Life. "(I used to believe) the government was the answer to all our problems. But the ... government, I've concluded, is now an insufferable jungle of self-serving bureaucrats."

Huntley's craggy face (imagine a hard-drinking, chain-smoking Tom Brokaw) and reputation still lure customers to Big Sky. Though he lasted only a few years here before dying of cancer, the Big Sky brochures play him up. Resort headquarters occupy a suite in the Huntley Lodge. You can have a drink in Chet's Bar.

In addition to its creation myth, Big Sky is famous for the pure skiing experience - 80 miles of ski runs already and no waiting in lift lines. You hear about the real estate boom, and you're told that Big Sky remains the most wilderness-like resort, sharing an ecosystem with Yellowstone National Park, which means grizzlies must be escorted off the ski runs, and moose and bighorns browse among the BMWs.

Big Sky is even famous for not being too famous. Everything built here so far - a scatter of about 900 condos, a couple hundred houses, a half-dozen lodges and related services, two gas stations - would fit in Vail's back pocket. The drive to the airport and Wal-Mart stretches more than 40 miles, down slender, twisting roads that often glaze with ice. John F. Kennedy Jr. and Carolyn Bessette made it to Big Sky for a week this winter, but they came to hide out - Big Sky has none of the celebrity scene that makes Aspen glitter.

What you don't hear about is the underlying premise: Big Sky is a test site for the idea that government and anything public should be shrunk down to libertarian size, allowing money, private property and market forces to dominate.

The shrinkage has already gone a long way. All the land here used to be public. Beginning in the 1800s, a few mining and ranching claims made some of it private, then a huge grant to the Northwest-spanning railroad established a checkerboard of private ownership throughout the Gallatin and Beaverhead national forests.

As the resort took shape, developers and the U.S. Forest Service did a lot of swapping of checkerboard squares, with the developers craftily seeking more land in Big Sky and the Forest Service not-so-craftily consolidating elsewhere while surrendering here. In all, more than 100 square miles - three valleys and the mountains in between - have been privatized here in the name of economic development.

As late as 1970, when Huntley announced Big Sky to great fanfare, only a handful of ranchers and loggers were living here, in the sagebrush meadows along the West Fork of the Gallatin River, below the forested ridges that converge in the dominant peak, 11,166-foot Lone Mountain.

Hikers, picnickers and backcountry skiers who found their way in were mostly free to roam, and the feeling was still neighborly. Ken McBride, who gave up ranching here to join the herd of developers, remembers, "We didn't go out to screw each other."

Backed by the original Big Sky Inc. corporations, including Northwest Airlines and Continental Oil (Conoco), and the realty division of Chrysler, Big Sky's original master plan called for a quality development, open space, neighborhood parks and trails and recreation centers. Covenants made more promises like, "Every attempt shall be made to preserve and protect the environment."

Big Sky was a perfect test site for government-free development because it was isolated, 40 miles up Gallatin Canyon from Bozeman. All the promises were going to be carried out under the oversight of the Big Sky Owners Association, which Huntley helped create and which he served as its first chairman.

The rules were simple: Within the association's boundaries, all people who own property and all people who lease business space are members - paying dues and entitled to vote on any issue that comes up.

The Big Sky Owners Association runs basic services, including the post office, snowplowing and stray-dog roundups. The association also helped establish more than a half-dozen special districts to run a sewer system and the fire department, for example.

Nothing much happens without the owners' association involvement. That's what makes Big Sky a test site of anti-regulatory, minimalist government. What government flourishes here is grounded firmly in property rights, not something as subversive as universal suffrage.

Nobody was watching

From the beginning, developers - unleashed and in a hurry - underestimated the difficulty of building in remote, rural Montana.

Workers from as far away as Mississippi had to learn to deal with subzero cold and snowfall totaling 33 feet a year on the high slopes. The climate and geography said go slowly, but the corporations needed quick cash flow, which meant selling condos as fast as they could be slapped together. Hundreds of the early condos were masterpieces of shoddiness - shaky from their roofs to their foundations.

Below ground, miles of sewer and water lines suffered from the same lack of quality control. Pipes cracked or were crushed as they were buried; pipes of differing sizes were merely shoved together, and where pipes didn't reach each other, the gaps were simply buried. From the moment the water mains were turned on and the first toilets flushed, tapwater and sewage gushed from countless underground leaks.

"It's a mess," says Terry Threlkeld, an engineer who has tried to plug Big Sky's leaks. "It's unbelievable. You've heard of the Cowboy Way? This is the Big Sky Way."

The work should have been inspected by various building-code and fire-code officials, or by the owners' association, but exceptions were devised.

"The original contractors came in here, and nobody was watching," says Bill Murdock, the chief staffer of the Big Sky Owners Association for most of the 1990s. "If a truck (delivering the proper building material) was late coming up the canyon, they just went ahead without it."

Those who say the only good regulation is a deregulation also say that sloppy workmanship gets punished by customers who refuse to buy. That's not how things developed here. As Big Sky Inc. tried to build itself out of trouble in the 1970s, opening sales offices in nine states to lure customers, a lot of the punishment fell on the customers.

The people who bought the flimsy condos were stuck for years, while they, Big Sky Inc. and a web of contractors, builders and architects struggled to sort out and fix the defects. And there wasn't enough publicity about the problems to stop people in places like Chicago, Florida and Hawaii from coming here on promotional tours and becoming the next wave of Big Sky customers.

"I bitched for years," Frederick Thomas, an insurance man from Butte who bought into Big Sky, said in 1978. "I figured I was dealing with a reputable outfit (Huntley, Chrysler Realty et al) and that they would correct anything I asked them to correct. But they didn't. And I figured I was such a damned fool for buying (a condo) that I should be punished."

Then the ski industry around the West did a nose-dive and the original corporations bailed out, selling the resort and most of the raw land to a family-owned ski company, Boyne USA, in 1976 and 1978. Buying into all the bad infrastructure, the miles of leaky plumbing hidden underground, the company might have been the biggest victim.

"We've had to clean up so many messes (the original corporations) left behind," says John Kircher, who has managed the Big Sky resort since 1981. "We've been cleaning up their messes for 20 years."

A tough birthday present

Last spring, Kircher was trying to persuade me that Big Sky is not that different from other resort towns.

"Things are not all that bad," he was saying.

So I asked about the Deer Lodge complex - 120 condos on the ski mountain, which were finished in 1975 and sold to about 100 customers, who then suffered through 13 years of repairs and hassles. Finally, the whole complex was abandoned, condemned and bulldozed into splinters.

"As far as I know," Kircher concedes, "that's a first for any resort."

Most of the condo messes were built before Kircher took over the resort. But was it true, I asked him, that his father, the company president, gave him the resort for his 23rd birthday?

Kircher, now a youthful 39, replied indirectly: "It would be one of the toughest birthday presents you could get."

Kircher's reign has to be described as 16 years of learning on the job. It was made tougher because the lean years stretched on, while the company put money into relentless expansion of the ski terrain and lifts. For nine of the last 10 years, though, the resort has set new records for ski business. Lift tickets hiked up to $46, the price range of Aspen and Sun Valley.

Last year, the resort claimed about 300,000 skier visits, but continued to exhibit a kind of shakiness. On Christmas morning, for instance, a ski patrol staffer placing an avalanche bomb blew herself up; the day after Christmas an avalanche triggered by the ski patrol mangled three towers of a popular ski lift. A few weeks later a chair dropped off another lift.

The company and John Kircher's father/boss, Everett Kircher, are based more than a thousand miles away, in Michigan; from there, the company runs resorts across the nation, including a ski resort in Brighton, Utah. Negotiations are under way to buy the Crystal Mountain resort near Seattle. Often it seems that John Kircher, who now manages all of the business west of Michigan, is spread thin.

Among John Kircher's sidelines is his long-term ownership of Big Sky's central water system, doing business as Lone Mountain Springs. He's paid himself up to $60 an hour to manage the system, while allowing his resort to siphon off all the water it needed for snow-making. The resort got millions of gallons for free, while hundreds of other water customers constantly griped about unreliable and polluted service.

As recently as last August, more than half the neighborhoods went dry, and angry resident Marty Pavelich said in a local newspaper, The Lone Peak Lookout, that if the water system isn't fixed, "My house isn't worth 10 cents on the dollar."

Inviting in the regulators

Last winter, the resort built a tram lift almost to the summit of Lone Mountain, making no attempt to disguise the ugly blockhouse atop the lift. The Forest Service and the public have a say about stuff like aesthetics, avalanche control and safety at resorts that lease public land, but not here, because the Big Sky resort owns all its terrain.

Two county governments have jurisdiction, since Big Sky straddles the counties' border, but the split makes for schizophrenia and the two county seats sit way off on the horizon, more than an hour's drive in opposite directions. County bureaucrats haven't intruded here much.

Complaints from customers and workers, and accidents, have attracted regulators from state agencies responsible for skier safety, labor and workman's compensation, building codes, commerce and utilities - all of which found violations here. Water customers, for instance, called in the state utility commission, which decided Kircher had shown a "willful disregard" for the law, and ordered the resort to pay for all the snow-making water it had taken.

But even state government was slow to respond to the biggest mess. Beginning in the mid-1980s, it was known that in addition to many smaller leaks, the sewage lagoons were leaking 30 to 60 million gallons a year of partially treated sewage.

The sewage drifted underground from the lagoons and surfaced in seeps along the branches of the Gallatin River, causing algae blooms and slime, and violating state standards for fish habitat. It also apparently poisoned the well of a nearby business and residential complex. Sampling of the river and groundwater near the lagoons indicates that the signature pollutant, nitrate, increased as much as 20 times from the pristine background levels.

"As long as the (sewer) system was leaking that amount, it violated the Montana Water Quality Act," says Scott Anderson, who managed the state's municipal wastewater program during the early 1990s. "Clearly the leakage was an illegal discharge."

Fines of $25,000 a day could have been imposed; none were.

The sewer district, working (or more often, arguing) with the owners' association, the resort and other developers, plugged some of the leaky pipes, but the flood from the lagoons continued.

The frustration of one state environmental engineer, Paul LaVigne, is revealed in internal memos in 1992 and 1993: "Why don't we just make them line their (sewage lagoons), fix their (broken pipes) and tell the bastards not to develop any further? ... Can we really justify (a waiver) for a resort community? This is polluting for fun, folks."

At last, some people here got fed up and asked the Montana environmental agency to take action. The Lone Peak Lookout, which usually cheerled for the resort, went so far as to editorialize for state action. The state agency - reorganized with a new title, the Department of Environmental Quality - was also fed up.

So the agency imposed a prohibition: No more new developments could connect to the sewer plant until all necessary repairs were under way. The subsequent political wrestling reached into Gov. Marc Racicot's office.

Bottom line, since the prohibition four years ago, $7 million worth of sewer bonds have been floated, work on lining the lagoons began last summer, and a new high-tech sewer plant is slated for the near future. Most important to the major players here, the prohibition was lifted last summer, so now all possible development can proceed.

A full employment program for Montana's lawyers

With no local government to yell at, people argue it out in lawsuits, like the bunch filed after Kircher carried a chain-saw up a forested mountainside and led the carving of a new ski run called War Dance. It might better have been called the Avalanche Path, since it eliminated trees above a row of homesites that had been bought by other Big Sky customers. Not only did the ski run avalanche as soon as it was installed, but the chainsaw crew also trespassed, cutting down trees on the lots without permission.

"War Dance," Kircher says, "was totally our screw-up."

The condo lawsuits have been the most massive. More than half the condos ever built here have become mired in lawsuits related to defects over the years (nearly 600 condos in six different complexes). Many customers have won some satisfaction since condos not torn down have been fixed, but the total payment to lawyers runs into millions of dollars.

It's a different kind of economic boom than was intended: "We have a saying (among lawyers in the region), Big Sky is the best thing that ever happened to us," says J. David Penwell, who was a lawyer for the resort in the early 1970s and since then has sued the resort several times. "I don't think there's an attorney in Bozeman who hasn't handled a case out of Big Sky at one time or another."

Resort towns are prone to frivolous lawsuits, but Big Sky has created its own league. The state's judges have had to decide who gets discount lift tickets and who gets to take tourists on horseback rides. And it's taken the justices on the Montana Supreme Court to decide whether horse farts should be allowed in Big Sky's neighborhoods. (A lawyer's motion warned that pet horses would result in "resounding, egregious divestitures of abdominal gas echoing through the hills and vales of this otherwise peaceful area ... ")

Those who blame environmentalists for being lawsuit-happy might be shocked to learn that of Big Sky's more than 100 lawsuits and related legal actions, environmentalists have filed only two, way back in the early 1970s.

As Kircher says, "In Utah (where his company runs the Brighton resort), there'd be a lawsuit filed over a sewer system causing this pollution." But Big Sky's sewer lawsuits haven't said much about pollution impacts; they've been all about money - the resort and other developers arguing about who has to pay for repairs and expansion.

The quasi government

The chore of defining a few simple rules, which might help people get along, has been left to the Big Sky Owners Association. Yet generations of association directors have stood by, while the original master plan was shredded.

Customers bought condos, houses and land based on the promises in the master plan, which was displayed prominently in the real estate offices. Studies in the early 1970s by the Forest Service and Montana State University concluded that Big Sky would work out fine, as long as the master plan was followed. Instead, the plan was never adopted by any government and never enforced.

Designated open space enjoyed by early residents and tourists was built over. Popular forest trails and roads were privatized and closed. The promised recreation centers, swimming pools and neighborhood trails were never built. No public park, not even a sidewalk, was developed. Workers and 20 families, living in a trailer park that was designated affordable housing, were evicted to make way for a single luxury home.

A breakdown of the membership of the owners' association shows the difficulty. There are about 7,000 members - lawyers, real estate brokers, doctors, engineers, consultants, tycoons, and retirees from such careers. About half the members are time-share owners who own a week or so per year at Big Sky. In all, 80 to 90 percent of the owners live somewhere else most of the time. Why would they care about affordable housing?

On the other hand, if you're a worker who rents a home in Big Sky, you can live here year-round and you get no vote in the association's elections, even on issues and candidates that affect you directly. The same goes if you own a home that happens to sit outside the squiggly and often-changing boundaries of the Big Sky Owners Association.

"Right now we have a country-club government," growls J.C. Knaub, a former ski patrolman who was fired by the resort, and later sued the company and won. Stubbornly, Knaub hangs on in Big Sky, but his house isn't included in the association, so for years he hasn't been able to vote for a community park he wanted.

"They don't want to give the dirtbags the right to vote," he says bitterly, "because then we'd be telling them what to do with their property."

Even among the far-flung owners, who can mail or fax their votes, the association's elections hardly resemble democracy. Each property gets one vote, and larger acreages get more votes. All by itself the resort casts about 30 percent of the votes in any election because it votes unsold land.

So today, not only does the resort have one-third of the directors on its payroll in one way or another, but one-third of the directors don't have their primary residences here.

In place of meaningful elections, there are more lawsuits. A bunch have challenged the owners' association's authority to enforce covenants. At this moment, good ol" boy directors, rebel directors, and rebels who are not directors, are suing each other, spending more than $100,000 on this set of lawyers' bills alone. The issue: Big Sky elections can seem as rigged as any in the Third World.

Harry Meabon, a retired engineer and a leader of a group within the association, Members for Better Government, gets a gleam in his eye when he talks about turning up "inconsistencies' in the elections. Like the time the resort suddenly discovered hundreds of extra properties - and extra votes it could cast. Meabon and other rebels sued the association's board, then pooled enough votes to elect Meabon to the board, where, in effect, he's suing and countersuing himself. As Meabon says, "Change is coming to Big Sky. There are big players in here, major changes coming, and the oversight better be tightened down."

The association may not have to provide answers. In one of the lawsuits challenging the embrace of developers here, a district judge in 1990 called the owners' association a "quasi government." As a result, the directors could continue to make decisions secretly, in closed sessions, and all records do not have to be made public. The directors don't have to comply with Montana's laws about sunshine and open meetings, the judge ruled. The owners' association is simply another corporation, making rules for its members, period.

Thus, the New West's Big Sky resembles the company towns of the Old West, where mining or logging bosses ran things.

'Something will emerge'

At a glance, it might look like Big Sky is finally getting its act together. Only 141 condo cases are still in court. The sewer is being fixed, more or less. A community park may finally be coming out of the clouds. And the cobbled-together water system probably can't go on much longer, although that's a statement that's been made a lot over the years.

A few of the special districts are recruiting professional leadership (the sewer district is no longer run by a retired schoolteacher from San Diego), and some districts hold elections, which fall somewhere between the Big Sky Way and democracy. The sewer-bond vote, for instance, was open to all registered voters in the district, including renters, plus anyone around the world who owned property in the district, including who knows how many thousands of time-share owners.

One district levies a sales tax, collecting $1 million a year, which is divided among the other districts. There's a new master plan (covering only half of Big Sky) and one trail is being developed - along a highway and thanks to a federal grant.

Yet the underlying lack of unity remains. The boundaries of the owners' association and smaller associations for each condo complex and neighborhood, and the special districts go every which way, as if some kid mapped them with an Etch-A-Sketch.

Murdock, who quit the Big Sky Owners Association last year and won a normal election to the Gallatin County Board of Supervisors, says what Big Sky needs is "a forum for arguing' - and only a real local government can be that.

As Big Sky grows, it will have a lot more sewage, more nit-picking retirees, more of everything to cope with. Jim Anderson, who served on the Big Sky Owners board and worked on parks and trails until he gave up Big Sky politics last year, says, "We need a real form of government that has clout to carry out good ideas."

Inventing a real local government would require a change of Montana law, since Big Sky spreads into two counties. No municipality can cross a county line now. But Big Sky has tweaked state law to get its way in the past - on liquor licenses, for example - and it could again, if people here can only compromise on governing themselves.

But when it comes to the question of rules and regulations, people here can't agree. Becky Pape rebelled against a trail easement in her back yard, sued the owners' association, then got elected to the association's board. Now, suing herself over the trails issue, she says she doesn't want any local government telling her what to do.

"I don't think anyone comes to Montana, even at this late date, to be extensively governed," Pape says.

"We're not making widgets," observes John Kircher, the resort's executive. "It might be that somebody has to create so much hate and discontent that we reach total gridlock, nobody can do anything, everybody's suing everybody, and then ... when things get dysfunctional enough, something (like stability, cooperation and some species of real government) will emerge."

But if there is ever any real government here, power would have to be given up to it, and that, as Murdock says, "scares people."

Ray Ring, HCN senior editor, is based in Bozeman, Montana.

This story was paid for by the High Country News Research Fund.

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