Private paradises The rich, the famous in Montana

At the helm of a black Suburban, Brandy Miller steers a course along a lengthy ridge at the Yellowstone Club. Around a gentle bend looms a huge home, perfectly aligned to catch towering Lone Mountain glowing in the late afternoon sun.

By JAMES E. LARCOMBE The Great Falls Tribune

"There were all these rumors about Jay Leno owning it, or some rich oil sheik," said Miller, marketing coordinator with the Yellowstone Club. "It was crazy."

So who does own the place? A family with children, but Miller’s not naming names. Privacy is paramount at the Yellowstone Club, the largest of four exclusive private clubs sprouting across Montana in recent years.

Property sales at the clubs — made up largely of vacation homes owned by wealthy folks who reside outside Montana — are strong. Those high-end developments are:

# The Yellowstone Club, a 13,400-acre enclave bordering Big Sky. It may be the only private club in the country with its own full ski area.

# The Stock Farm Club, a 2,600-acre golf and recreation community near Hamilton, which features a private 18-hole golf course designed by Tom Fazio.

# The Iron Horse Club, an 800-acre upscale housing and golf development at the base of Big Mountain in Whitefish.

# The Silver Bow Club, a 2,000-acre ranch that offers horseback riding and flyfishing along the Big Hole River.

The private clubs provide an economic boost, both in jobs and taxes. But it’s not clear that the current upswing of trophy homes will play a large role in the state’s future. And not everyone is enamored by the environmental and social changes that come with the locked gates and security cameras.

"I don’t think you are going to see much more development like that," said Matt Guzik, general manager of the Stock Farm Club, an area developed in part by Charles Schwab, the discount stock brokerage executive. "I don’t know if the area can be supportive of more developments like that."

Montana’s distance from cities could be one factor.

"Montana’s a tough place to get to if you don’t have a plane," said Wes Spiker, a Stock Farm member whose Missoula advertising agency, Spiker Communications, does work for the club and others around the country.

But others say Montana still holds plenty of appeal for wealthy folks from urban centers.

"All of these deals are selling cutting-edge quality in Montana," said Pat Donovan, one of the developers of the Iron Horse Club. "It’s as good as anything in Vail, Aspen, Breckenridge, California or Arizona."

While the Yellowstone Club, is hardly cheap, "it’s a pretty good deal" compared with such Colorado competitors as Aspen, Vail or Telluride, said Hank Kashiwa, the club’s vice president of marketing.

The Yellowstone Club may be at the top end of the Montana market. Membership fees are $250,000 and homes built on speculation carry price tags from $3.45 million to nearly $7 million. Tim Blixseth, who formerly owned much of Crown Pacific, a timber and lumber company, owns the development.

Kashiwa said sales are strong, despite a national recession and a stock market swoon that only ended recently.

"July was one of our strongest sales months ever, and it just hasn’t let up," said Kashiwa, a former U.S. Olympic skier who also does TV ski-race commentary. To date, he said, the club has sold about 130 of its 864 "doors," which include lodge condominiums, custom homes, slope-side chalets and 160-acre ranches that list for $8 million.

Kashiwa characterized the club’s existing and potential members as "financially sophisticated" people who realize that recreational real estate can be a good investment.

"These are second, third, fourth homes for people," he said.

The Yellowstone Club, which opened a few years ago with essentially a few ski lifts and a lodge or two, is still in its infancy. While the club now has eight ski lifts, work on a $30 million main lodge is under way. An 18-hole golf course designed by professional golfer Tom Weiskopf, who has a home at the club, could open next summer.

Blixseth predicts Montana will see more private clubs, though somewhat smaller than his, in coming years.

"I think there will be more places like the Iron Horse but there won’t by any more like the Yellowstone Club," Blixseth said. "It’s too difficult to build and develop."

The Stock Farm, which opened in 1999, has sold about two-thirds of its 95 homesites, according to Guzik. Featuring an 18-hole golf course designed by Fazio, one of the nation’s leading course designers, the Stock Farm also offers an equestrian center, a swimming and fitness center, a gourmet restaurant and such outdoor activities as fishing and hiking. Remaining land parcels are in the $450,000 to $750,000 range.

Guzik credits the Stock Farm’s amenities with driving sales.

"I think people are looking for these types of places," he said. "They are looking for places to share with their families."

At the Silver Bow Club, which is owned by Florida developer David Pepe and the Orvis Co., there are five pending sales at what Pepe describes as "one of the best riverfront developments in the country." The Silver Bow recently reorganized and hopes to benefit from its tie to Orvis, a high-end fishing and outdoor products company. "Homesteads" at the Silver Bow Club are priced at $1.75 million

"We think we will be 50 percent sold out by the end of next year," said Pepe.

Iron Horse, which opened in 2000, sold all but 20 of its 325 homesites, Donovan said. Lots currently sell for about $750,000. Membership fees have climbed to $125,000 from $30,000, and annual fees are $6,000.

"We’ve sold at higher prices and at higher volumes than anybody thought we would," said Donovan.

Iron Horse also features a Fazio golf course, Whitefish Lake access and a staff to help residents arrange outdoor activities.

Private clubs naturally attract high-end buyers.

Miller, a marketing staffer at the Yellowstone Club, said some big-name folks find the Yellowstone Club to their liking.

Former Vice President Dan Quayle is a member, while Jack Kemp, a former NFL quarterback and vice presidential candidate, maintains a relatively modest log home there. Warren Miller, a ski filmmaker, is the club’s director of skiing, while Weiskopf is one of just a few year-round residents at the club. Annika Sorenstam, the top player on the LPGA tour, is a member, as is cyclist Greg LeMond, a Tour de France winner.

Beyond Schwab, musician Huey Lewis and sports broadcaster Brent Musberger, the Stock Farm’s membership list includes more corporate types than celebrities, one member said.

"If you read Forbes or Fortune regularly, you might recognize some of the names," Spiker said.

And the Stock Farm is not a haven for hoity-toity types in Hummers, said Spiker, who bought a membership for $25,000 as part of a deal aimed at getting local people to join the club.

"Chuck Schwab drives an old Suburban," he said. "There are no Maseratis down there."

The Missoula man says his 22-year-old son finds the Stock Farm "less snobby than the Missoula Country Club."

"They are just really nice folks there," said Spiker. "They are just happy to be in Montana."

Donovan said the Iron Horse is not populated by the rich and famous, but is more of a family club.

"We have a tremendous number of residents who are still working and have young kids," he said.

Positives, negatives

Russ Bethel, who said he "may play more golf than anybody in the whole county," has never set foot on the Stock Farm course.

"It wasn’t built for the average Bitterrooter," said Bethel, a 23-year resident of the Hamilton area. "It was built for out-of-state money."

But Bethel has no beef with the private club that got its name from the sprawling horse farm developed on the property in the late 1800s by Marcus Daly, one of Montana’s "copper kings."

"I’m glad its there, even if it isn’t for me," Bethel said. "Our county does derive a positive benefit from it," he said, noting the club and its members provide a significant boost to the Ravalli County tax base.

Ray Carr, a retired Forest Service employee and a resident of the Bitterroot Valley for the past 30 years, said the arrival of Schwab and Lewis, who owns property near Stevensville, is a mixed blessing. In acquiring large tracts of lands, Carr said, the wealthy newcomers help stave off more subdivisions and often place conservation easements on all or portions of their holdings.

"These celebrity ranchers, or whatever you want to call them, have until recently, kept a low profile and have tried to be pretty good neighbors," Carr said.

Several recent access disputes, including one involving Lewis and a Bitterroot River slough long popular with area fisherman, raised local hackles. Some residents contend that a move to expand the Hamilton airport is being driven not by local demand but by Stock Farm residents who fly in and out on private aircraft.

Carr said there seems to be a growing rift between wealthy newcomers and relatively poor valley residents.

"It’s starting to raise a little stink in the valley," he said, noting, "all this is part of change."

Spiker, the ad agency owner, said concerns about the Stock Farm are overblown.

"There are some people who think it (the Stock Farm) is going to turn Hamilton into Aspen. It’s not going to happen," he said.

Fines at Yellowstone

The Yellowstone Club, which includes several long ridges south of the Big Sky Resort, appears to have raised the most ire from environmental groups and ran afoul of several state and federal agencies.

The Montana Department of Environmental Quality and the federal Corps of Engineers said the club failed to get proper permits for construction activity on ski runs and the golf course, work that led to murky water entering area streams. The club also installed culverts without getting needed permission, agencies said.

The allegations were serious enough to leave the club facing up to $1.3 million in state and federal civil penalties, although no final fine amount has been set.

"We are currently in settlement negotiations to resolve that (penalty) issue," Jan Sensibaugh, director of the state Department of Environmental Quality, said last week. "We hope to resolve it soon."

The fines will be substantial, according to James Madden, an attorney for the department.

"I think the ultimate settlement is going to be in the neighborhood of a million dollars," he said.

Blixseth confirmed the settlement talks, saying "we will be glad to get that past us."

He said mistakes by subcontractors and "naivete" on his part played a role in the problems, which occurred on just a few acres of the sprawling Yellowstone Club property. Blixseth also defended his environmental track record, saying he incurred no fines during his 25 years in the logging business.

The Greater Yellowstone Coalition, an environmental watchdog group, said aside from the water quality issues, potential impacts on wildlife are its biggest concern with the Yellowstone Club.

While clustering homes and buildings closely together helps reduce wildlife impacts, that’s not part of the plan at the Yellowstone Club, where homes are spread widely.

"I wouldn’t call that development a model," said Craig Kenworthy, a Yellowstone Coalition staffer, adding the club has done "OK" in some areas.

Taxes, new pickups

While there has been some concern that the Iron Horse club altered wildlife travel patterns, controversy surrounding the development appears to have peaked several years ago.

Donovan recalled acrimonious city council meetings as the club sought annexation to the Whitefish city limits. But he noted that a move by opponents to place the annexation on the ballot failed to get the needed 400 signatures.

Jan Metzmaker, a longtime Whitefish resident who served on the city council during the Iron Horse fight, said controversy over the club has waned.

"I think most of the problems were addressed in the planning process," she said. "Once the roads were open, a lot of the opposition went away."

With 150 employees at summer’s peak, Donovan said the Iron Horse is "a tremendous boost" to the local economy.

With an average of 15 homes per year being built, "at $2 million per home, that’s $30 million a year, all going to local contractors and subs," Donovan said. "In a town like Whitefish, $30 million a year is a big deal. Every builder in town is driving a new pickup truck, and I think that’s great."

Mike Eve, the Whitefish city finance director, said property taxes from the Iron Horse produced a clear boost.

"The homes being built are valued at $3 to $5 million a pop," Eve said. "It presents more of a revenue source for the community than an expenditure."

In Madison County commissioner Ted Coffman wouldn’t guess at the Yellowstone Club’s total tax impact. But he said it has been great for county finances. Big homes replaced undeveloped timberland, which doesn’t generate much in tax revenue. Part-time residents don’t boost school costs and "they don’t demand a lot in services over there," said Coffman.

At the height of the season, the Yellowstone Club employs about 250 workers, club officials said. That doesn’t include workers building homes or those working to construct the multi-story, 125,000 square-foot Warren Miller Lodge.

During a recent weekday, the unmarked road to the area hummed with large and small trucks hauling materials and workers through the massive stone-and-timber gatehouse that marks the entrance to the club.

Gates, guards, cameras

At the Yellowstone gatehouse, a security guard checks permits issued to construction workers. The curious and others are turned away.

Along with the imposing gatehouse, the club has a number of security workers supervised by a former Secret Service agent who carries the title of "vice president of security, director of privacy."

Kashiwa said security measures are not unusual at private clubs. The security workers monitor conditions of homes and look for potential hazards, a service that "puts the members’ minds at ease," Kashiwa said.

Unlike the Yellowstone Club and the Stock Farm, the Iron Horse isn’t gated. A security camera monitors the entrance and a guard does after-hours rounds.

While residents like the security measures, "a gate in Whitefish is not really something that is all that needed," said Donovan, noting the development is part of the city and needs to provide access to police and fire personnel.

Former councilwoman Metzmaker said Whitefish residents use a walking trail that winds through Iron Horse. The lack of a gate is important, in her eyes.

"I think that’s kind of like the anti-Montana way of life," Metzmaker said of gated communities. "It’s so unfriendly."

http://www.greatfallstribune.com/news/stories/20031130/localnews/737388.html