A photo of Holland Lake in Montana (Fhoto by the U.S. Forest Service via Flickr | CC-BY-SA 2.0).
Nearly one year before the U.S. Forest Service announced a controversial expansion at Holland Lake Lodge, an email shows the federal agency knew an out-of-state company, POWDR, was managing the resort.
POWDR is an “adventure life” company based in Utah that is buying the lodge in the Swan Valley. It is working with former owner Christian Wohlfeil to expand the resort.
Wohlfeil has said he remains a majority shareholder of the lodge; POWDR has declined to discuss the ownership structure.
The lodge operates with a permit on public land in the Flathead National Forest.
In October 2021, POWDR’s Brian Stewart sent an email to two Forest Service employees with “a couple of important updates to share with you.
“First, Phase 1 of closing has taken place and POWDR is now managing the lodge,” Stewart said in the email.
“Christian is still majority owner of Holland Lake, Inc., but is now a POWDR employee. Shares of Holland Lake Lodge, Inc., will transfer in entirety once the MDP (Master Development Plan) is approved.”
(The Master Development Plan is the expansion proposal submitted to the Forest Service.)
“At the same time, we’ll request a new (permit) based on change of ownership and the size of the investment,” the email said.
Two Hamilton lawyers who oppose the expansion and have been reviewing related public records allege the email is a “smoking gun” that indicates the lodge permit is no longer valid.
“Holland Lake Lodge’s existing special use permit … was terminated by operation of law in October 2021, when former owner Christian Wohlfeil surrendered control over the lodge operations to POWDR,” wrote lawyers George Corn and Dan Browder in a recent memo.
They said POWDR makes a plain statement it is “now managing the lodge.”
“It doesn’t get any clearer than that,” the lawyers said.
But the Forest Service disagrees with the conclusion the permit is terminated, said Flathead National Forest Deputy Supervisor Tami MacKenzie. In an email, MacKenzie said a legal review is underway, but the permit remains in place.
“With the information that we have at this time we are considering the permit still valid,” MacKenzie said.
Corn and Browder obtained the email to the Forest Service through a records request and shared the email and memo with the Daily Montanan. They also note real estate records, media reports and social media posts from the realtor show the lodge went on the market and sold in 2021.
“It is unfathomable that the USFS did not determine that the termination provision of the permit was triggered,” wrote Corn and Browder in the memo addressed to Flathead National Forest Supervisor Kurt Steele.
The special-use permit that allows the lodge to operate on public land identifies Holland Lake Lodge as the “holder” and Wohlfeil, who was copied on the email from Stewart, as its owner.
The permit also notes “any change in control” shall result in the permit’s termination. It defines change of control as including a third-party having “the ability to exercise management authority” over operations.
In such cases, the permit states the Forest Service is not obligated to grant a new permit.
This week, the Forest Service would not say whether a new permit application is needed based on the change in management.
“Our legal department is looking into this,” MacKenzie said.
Wohlfeil has managed the lodge for roughly 20 years. In an earlier interview, he said he wants to sell the property to an owner who shares his values of sustainability, so he entered a deal with POWDR.
The Forest Service was first notified of the intended sale to POWDR on Dec. 16, 2020, said MacKenzie in the email.
She said the Forest Service then received a letter of intent on Jan. 13, 2021, “which documents the relationship between HLL (Holland Lake Lodge) and POWDR at that time.”
The letter was not immediately available Wednesday.
On Sept. 1, 2022, the Forest Service announced the expansion to the public.
MacKenzie said the Forest Service did not disclose to the public that POWDR indicated it was managing the lodge because “it was our interpretation at the time that the control and ownership was still with Christian Wohlfeil.”
MacKenzie said the October 2021 email did not trigger a legal review for the same reason.
“As noted in the email, Christian remained the majority shareholder, and transfer of shares would not commence until the MDP was approved,” she wrote of the Master Development Plan, or expansion proposal. “The MDP was accepted for further analysis but has not been approved for implementation.”
She said the Forest Service team is “working on determining the accuracy of the current permit,” and the review is ongoing.
“If it shows that the ‘ownership’ or ‘control’ has legally changed, then we will start looking into the process of issuing a new permit,” MacKenzie said.
She said that process “does not allow for expansion, etc,” but is only an administrative change that would grant the new entity a permit if it is financially and technically capable to manage the resort.
Corn and Browder already had concluded POWDR was in control of the lodge — despite any “corporate shenanigans” in ownership structure, they said — based on their earlier review of public records. They made their case in a memo dated Nov. 15.
POWDR previously declined to confirm to the Daily Montanan that it had taken over management of the lodge. Wohlfeil has directed most questions to a POWDR spokesperson.
Wednesday, POWDR did not respond to a request for comment on the October 2021 email or allegations it had engaged in “legal shenanigans” around ownership to mask it was in control of the lodge.
Holland Lake is a pristine lake in the Swan Valley, which is home to grizzly bears, lynx and bull trout.
Once the Flathead National Forest notified the public of the proposed expansion, problems quickly surfaced, including accuracy of information provided from the agency.
In November following significant opposition from the public, MacKenzie said the process needed a “reset.” The Forest Service requested the lodge correct and resubmit its expansion proposal, and POWDR has said it intends to do so.
But public pressure against the expansion has mounted.
In their most recent memo, Corn and Browder argue the agency has failed to carefully review the validity of the permit, and the proposal submitted under Wohlfeil’s permit is “indefensible.”
They call on the agency to “demand from POWDR and Wohlfeil all the details” of their transactions. And the lawyers criticize the Forest Service for its lack of transparency — a persistent refrain by the public with the Holland project.
“The USFS’s credibility is on the line,” they conclude in their memo. “Will the USFS honor the permit’s strict termination clause or genuflect to the POWDR Corporation?”Holland Memo No. 2
From the Flathead National Forest:
If it is determined that there was a change in control or ownership, the Forest Service will go through a process first to determine if the new entity is financially and technically capable to manage a resort and if so, will first move forward with issuing a new permit to that entity. This process falls under a category established by the Chief (see below). Please note that this does not allow for any changes to the current permit other than administrative. It does not allow for expansion, etc. At the time, we did not interpret the (Oct. 2021) email you are referring to as a change in ownership or control.
(10) Amendment to or replacement of an existing special use authorization that involves only administrative changes and does not involve changes in the authorized facilities or increase in the scope or intensity of authorized activities, or extensions to the term of authorization, when the applicant or holder is in full compliance with the terms and conditions of the special use authorization. Examples include but are not limited to:
(i) Amending a special use authorization to reflect administrative changes such as adjustment to the land use fees, inclusion of non-discretionary environmental standards or updating a special use authorization to bring it into conformance with current laws or regulations (for example, new monitoring required by water quality standards), and
(ii) Issuance of a new special use authorization to reflect administrative changes such as, a change of ownership or control of previously authorized facilities or activities, or conversion of the existing special use authorization to a new type of special use authorization (for example, converting a permit to a lease or easement).
36 CFR 220.6(d)(10)
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