POWDR already in charge of Holland Lake Lodge, memo alleges
With the expansion, the lodge could serve as many as 156 guests. Changes would include removing old structures like the gift shop, repairing the old lodge and the manager’s cabin, and adding a new lodge, restaurant and 26 cabins. (Image courtesy the U.S. Forest Service via Montana Free Press)
| November 23, 2022 12:00 AM
POWDR, a Utah company identified as future owner of Holland Lake Lodge, is already in control of the Swan Valley resort, allege a couple of lawyers who are opponents of a lodge expansion proposal in a memo and review of public records.
But the memo also alleges a U.S. Forest Service permit in use by Holland Lake Lodge is no longer valid because changes to control of the resort voided the agreement.
“We believe Holland Lake Lodge, Inc., has already violated its USFS ‘Term Special Use Permit’ by its transactions with POWDR Corporation,” reads the Nov. 15 memo and records review addressed to “interested parties.”
Thursday, a Forest Service spokesperson was traveling and unavailable to fully address questions about the validity of the permit. However, spokesperson Tami MacKenzie said the Forest Service will continue to evaluate the issue.
“The information we have been given to date still has Christian Wohlfeil as the majority owner of Holland Lake Incorporated,” MacKenzie said in an email. “We will continue to look into this concern regarding current ownership and if something has changed we will take appropriate action.”
She also said the Forest Service will conduct an environmental assessment “at a minimum” if the expansion moves forward, contrary to an earlier preliminary decision to exempt the proposal from a thorough environmental review.
Holland Lake Lodge operates on public land in the Flathead National Forest under the special use permit, which is valid through 2036.
The Forest Service announced the Holland Lake Lodge expansion proposal this fall. The proposal noted owners Christian Wohlfeil and POWDR, of Park City, Utah, had submitted the joint application to expand and improve the resort.
Wohlfeil has owned and managed the resort for 20 years, according to the application. In an earlier interview, he said he recently sold minority shares to POWDR, which operates ski resorts and bills itself as an “adventure life” company.
But the memo released this week by lawyers George Corn and Daniel Browder alleges control of the joint venture between Wohlfeil and POWDR terminated the current permit and should have triggered an application for a new permit.
Corn and Browder, who live in Ravalli County, said they discussed their opposition to the project and subsequently conducted the review; they did the work independently of the Save Holland Lake group, which formed to fight the expansion.
In a brief email Thursday in response to questions about the permit and arrangement between POWDR and Wohlfeil, POWDR spokesperson Stacey Hutchinson disputed any changes, ostensibly to the special use permit.
“There has been no change since we (Powdr) originally partnered with Christian and Holland Lake, LLC,” Hutchinson said in the email.
She declined to confirm POWDR is in control of the lodge and didn’t discuss the ownership structure.
The expansion proposal has drawn significant opposition, in part because of the resort’s location in the Swan Valley and its possible effects on grizzly bears, water quality and other resources.
The group that formed to oppose the project, Save Holland Lake, has said the Forest Service itself contributed to confusion and public distrust after it misstated the acreage covered in the current permit.
The current permit covers 10.53 acres. The expansion proposal discusses a project of 15 acres.
At meetings and in public comment, many members of the public also decried the agency’s initial decision to excuse the project from a thorough environmental review by granting a “categorical exclusion.” However, MacKenzie’s email Thursday noted the agency will conduct at least an environmental assessment if the project moves ahead.
In the meantime, the Nov. 15 memo from Corn and Browder calls into question the validity of the current permit itself, issued May 2017.
The memo states it is not suggesting POWDR has acted illegally.
However, it said corporations regularly try to get around “ownership and control” provisions, and it alleges the Forest Service has been remiss in its lack of scrutiny of the “joint venture” and the parties’ arrangements.
“POWDR’s corporate shenanigans may be legal, but they are precisely the sort of actions that the permit was drafted to address,” the memo said.
A permit provision states specific conditions terminate the permit “without any action by the authorized officer,” or Forest Supervisor. It cites as one example “termination upon change of control of the business entity.”
The current permit identifies Holland Lake Lodge as the “holder” and lists Wohlfeil as owner of the lodge.
The permit states the holder shall notify the Forest Service when a change in control “is contemplated,” and it defines changes in part as a “joint venture” or a third party having “ability to exercise management authority” of the business.
In the case of a change of control, the permit notes an application for a new permit must be submitted, but the Forest Service is not obligated to grant one.
Neither the Forest Service nor Wohlfeil or Hutchinson answered a question Thursdsay about when or whether POWDR or Wohlfiel notified the federal agency of changes.
But citing public records, the memo from Corn and Browder identifies changes it alleges already place control of Holland Lake Lodge in the hands of POWDR.
For example, Holland Lake Lodge transferred a liquor license to a separate Holland Lake Lodge Restaurant LLC, according to Department of Revenue records.
That limited-liability corporation is controlled by Justin Sibley, POWDR CEO, according to the Montana Department of Revenue records. The LLC, in turn, has a concession agreement with the lodge, which the memo said “allows the lodge to utilize the license that was formerly in its own name.”
“Without a liquor license, the Lodge — a destination resort that touts fine dining as one of its attractions — can’t legally sell alcohol, which would likely be a death blow,” the memo said.
The liquor license was transferred for $1,000, according to the DOR record. In Montana, liquor licenses can be sold for tens of thousands of dollars.
A 2022 report to the Montana Secretary of State’s Office from Holland Lake Lodge identifies Sibley and Tim Brennwald, of the same Park City address, as officers of the company. The Secretary of State documents are included in a presentation made in Seeley Lake earlier this week by Save Holland Lake and cited in the memo.
The same Secretary of State report strikes out references to Wohlfeil. It lists a mailing address in Park City for the “principal office” and is signed on behalf of Sibley in a power of attorney capacity.
The memo also notes Utah Secretary of State records show POWDR’s address in Park City as the same one listed as the legal address for the lodge by the Montana Secretary of State’s Office as of April 2021.
“This indicates that for the last 18 months, the Lodge’s corporate affairs … have been conducted by POWDR’s ‘legal department,'” the memo said.
The presentation made in Seeley and provided to the Daily Montanan notes a permit amendment dated August 2022 was signed by both Wohlfeil and the primary contact for the proposed expansion, POWDR’s Brian Stewart. Forest Supervisor Kurt Steele signed the document as well.
The presentation notes the signing took place “before the public was notified of a proposed project.”
In earlier interviews, Wohlfeil has said the property needs significant investment in infrastructure upgrades in order to operate sustainably for future generations. He has said he believes POWDR has the resources and vision to execute, as well as the ethic to do so responsibly, unlike some other organizations that have shown interest in the lodge.