Possible applications of Proposition 2

Marvin Erickson

All Marvin Erickson wants is to build upscale houses next to his own home on Canfield Mountain. But for years, Kootenai County has said no, either recommending against the proposal for Erickson Estates or throwing it out because Erickson allegedly changed the details too much. It’s now in the hands of the Idaho Supreme Court.

Yet there’s a measure on the Nov. 7 ballot that might solve Erickson’s problems, or at least force the government to pay him for allegedly diminishing the value of his property by hindering development.

Erickson sees Proposition 2 as his ticket to relief, and many people cite Erickson Estates as a prime example of what could happen if the initiative passes. The measure would enact a sweeping new regulatory takings law, requiring government to pay property owners if any land-use regulation diminishes their potential profits from full development of their land.

“Right now they have a license to steal,” said Erickson. “Proposition 2 would change that. This would take away some of (the cities’ and counties’) power and glory.”

Erickson declined a further interview for fear that his association with Proposition 2 would hurt its passage. Erickson is disliked by many and gained notoriety in 1999 when he built his house and a Z-shaped road up the steep face of Canfield, a Coeur d’Alene landmark. The scar of the road is visible for miles. Erickson routinely refers to his opposition as a “hate group.”

Scott Poorman, Erickson’s longtime attorney, agrees that Proposition 2 could benefit Erickson. “The county either has to get out of the way or buy his land essentially,” he said.

Poorman said the measure will primarily benefit large rural landowners, like Erickson, who have owned their property for generations.

Former Kootenai County Planning Director Rand Wichman handled the Erickson Estate’s application but now owns a private land-use consulting business. He said the effect of Proposition 2 on Erickson Estates and other denied proposals in the county is unclear because the initiative is so poorly written.

Yet what is clear is that Proposition 2 would radically change how the county commission makes decisions, Wichman said. And he argues it would raise property taxes because that’s the only way government could pay off claims.

“There are some bad projects that are proposed,” Wichman said. “The commission will have to weigh: do we approve it or do we face a Proposition 2 claim? Those are not very good choices for some projects.”

Coeur d’Alene hillside ordinance

Coeur d’Alene aggressively protects its hillsides, passing a land-use law in 2003 to ban construction on the town’s steepest slopes after Fernan Terrace Road collapsed near where a contractor was building a home.

The restrictions require soil studies and engineering reports and limit the color that people can paint their homes and how many trees they can cut down. It’s an attempt to reduce the chance of landslides, protect water quality and prevent eyesores on the town’s picturesque timbered hills.

City Attorney Mike Gridley said Proposition 2 likely would cripple the enforcement of the hillside ordinance and any other land-use laws, including prohibiting registered sex offenders from living within 500 feet of a school.

“It’s no secret that it would severely hamper the regulations of land use, and that’s the intent,” Gridley said.

Scott Reed, a private Coeur d’Alene attorney, admits that there’s a lot of ambiguity with the proposed law, but it appears Proposition 2 would gut the hillside restrictions.

“People can now say, ‘I was going to build a Taj Mahal, therefore I’m entitled to all this money because you won’t let me do it,’ ” Reed said.

Initially the hillside ordinance ignited an outcry about private property rights, garnering sharp criticism from real estate agents, developers and a few local residents. Yet since its passage, city officials said they have gotten few complaints and no threats of lawsuits.

Proposition 2 could change that.

To Reed, the measure would open the door for development scams. He points to a 1995 proposal that touted 104 condominiums and 59 houses zigzagging down a hill and along the south shore of Fernan Lake. The developer allegedly sold stock in the project even though the idea was unrealistic, if not impossible, and the company went bankrupt, Reed said. With Proposition 2, that developer could have filed a multimillion-dollar claim against the city and likely won. He said the law wouldn’t require developers to prove that the project is actually doable or that they have the financial backing.

“There are all kinds of fly-by-night real estate schemes people dream up,” Reed said.

Chateau de Loire Spa and Lake Club

The Kootenai County Commission rejected a proposal for the multimillion-dollar private golf retreat in July, arguing that state Highway 97 can’t handle the increased traffic, and the project doesn’t fit in the rural area on the east side of Lake Coeur d’Alene.

Las Vegas-based Kirk-Hughes Development Co. has filed an appeal in 1st District Court.

Now there’s wide speculation about how Proposition 2 could play into the picture and, if the measure is passed, whether the company could sue Kootenai County for the total value of the project, estimated at $150 million in 2005.

Project manager Brian Bills said he hasn’t taken a position on Proposition 2 and was vague about whether it could help Kirk-Hughes Development win a claim against the county. He doubts the threat of a Proposition 2 claim would have changed the commission’s decision to deny the project.

“We honestly believe that the board did not have legitimate grounds to deny our project,” Bills said. “If Proposition 2 would have been in place, it wouldn’t have made any difference.”

Either way, Bills said, it would have ended up in court.

Former Kootenai County Planning Director Rand Wichman, who now does private land-use consulting, couldn’t comment about the specifics of the Chateau de Loire proposal because of the pending lawsuit. But he did say that with large development proposals becoming more common in Kootenai County, Proposition 2 could raise the ante.

“Consider the impact of a development that is going to be worth $300 million,” Wichman said, adding that the county’s 2007 budget is only $63.5 million. “The stakes get very, very high. The impact to a community can be very, very high, too.”

– Erica Curless; photos by Jesse Tinsley