Twin lawsuits filed to reverse Lake County decision

FALL LAKE TWP- Lake County is facing a double-barreled legal action that is likely to throw a virtual hand grenade into the planned development at the Silver Rapids Resort property here. The 62-acre parcel, located on the narrows between Farm and White Iron lakes, has been the subject of intense local controversy over a planned redevelopment that would greatly increase the density of residential units and increase vehicle and boat traffic at the site.
Local property owners and residents, organized under the name Community Advocates for Responsible Development, or CARD, filed suit against the proposal last Thursday, Oct. 3, alleging that the Lake County Planning Commission knowingly violated county ordinances and state law when it approved a conditional use permit and preliminary plat that allows far greater density of development at the site than allowed.
Later that same day, the Department of Natural Resources filed its own lawsuit, making similar allegations. The DNR suit cites the planning commission’s decision to allow for expansion of the resort property “from 13 dwelling units to 62 dwelling units.” Citing Lake County ordinances and state lakeshore rules, the DNR contends in its filing that “the planning commission lacked authority to grant a permit for such a large increase in the number of units.”
The DNR contends the commission could have approved no more than 29 dwelling units under its ordinance. “Therefore, the planning commission erred in failing to follow its own ordinance and by approving an increase to 62 dwelling units,” states the DNR’s legal brief filed in the Sixth District court in Two Harbors. The DNR also cites violations over the number and distribution of mooring slips as well as the apportioning of open space within the development.
CARD’s filing asks the court for an injunction along with an order requiring the county to retract its decision, while the DNR is asking the court to require Lake County to redo its conditional use permit and plat for the project to comply with “local shoreland law.” Both lawsuits ask the court to require Lake County to pay all costs and attorneys’ fees for the plaintiffs.
The DNR is being represented by Attorney General Keith Ellison. CARD, which now claims over 300 members, is represented by the Taft Stettinius & Hollister Law Firm, based in Minneapolis.
Included in CARD’s 125-page court filing are numerous exhibits that plaintiffs believe show that members of the planning commission knew that the conditional use permit they approved on Sept. 4, 2024, was in violation of county ordinance and state law.
Perhaps the most damning of those exhibits is a spreadsheet, apparently prepared by Lake County planning staff, that shows the allowable number of residential or rental units that would be allowed near the waterfront (known as the first tier) and how many would be allowed in the second tier, located further inland. According to the spreadsheet, the most units that could be allowed in the first tier under the county’s ordinance was 14, with 15 allowed in the second tier, which is exactly what CARD and the DNR have maintained from early in the process.
In the end, the planning commission inexplicably approved a conditional use permit allowing 33 units in the first tier and 29 units in the second.
“The record is indisputably clear that Silver Rapids’ planned resort, according to its development plans and application submittals, mischaracterized the permitted use of the resort property, and exceeded - by double - the maximum densities permitted for such property under both local and state law,” notes the attorneys for CARD in their court filing.
The project developers, who hope to build 49 luxury condominiums at the site along with additional docking, a new lodge, and improvements to other existing buildings, had argued that the project should fall under less restrictive state rules for commercial planned unit developments. Yet the county spreadsheet showed that even under the state rules, no more than 27 units would be allowed in the first tier, with 21 in the second tier.
In either case, the Minnesota DNR had informed county officials ahead of the decision that the stricter county ordinance, rather than the state’s shoreland rules, was the controlling standard for the project.
CARD calls the county’s approval of the applications “unlawful, arbitrary, and capricious,” and adds that the county and its administrator for its planning staff, Christine McCarthy, the director of Lake County Environmental Services, had “no excuse” for their failure to deny the applications. The Timberjay reached out to McCarthy by email with questions on whether her office had ever informed planning commission members that the permit and plat they were considering violated both local ordinance and state law. It’s not clear that the spreadsheet, which implies county awareness of their violations, was ever presented to planning commission members, or if they understood its significance. McCarthy said she could not comment given the ongoing litigation. Lake County administrator Matthew Huddleston did not respond substantively to other questions posed by the Timberjay.
In a comment after the filing, CARD attorney Adam Niblick expressed surprise at the county planning commission’s actions. “Regardless of how one feels about this particular development project, the fact remains—and the DNR’s separate lawsuit confirms—that Lake County government officials knowingly defied state and local law and then doubled down when confronted with their wrongdoing,” Niblick said. “That should alarm all taxpaying citizens of Lake County.”
Niblick noted that his firm has been involved in the public process on the development from the early stages and had made the planning commission well aware of their view that the decision ultimately made by the commission was illegal. In addition, officials with the DNR had expressed similar concerns to county staff, warning in a Sept. 13 letter that the county could well face legal action if it failed to reverse its decisions regarding the Silver Rapids development.