Battle ground

A dispute between a commercial developer and the state about buying property along U.S. 95 for an interchange at Athol is headed for a rare trial of its type on March 5.

The Idaho Transportation Department condemned 16 acres owned by Hughes Investments at the northeast corner of Highway 54 and U.S. 95 for a future interchange.

Hughes, which owns 56 acres at the site and is planning a travel center, grocery and hotel, declined to accept ITD's offer for the land for the interchange.

Both sides declined to say specifically what the last offer was.

"We can't get into numbers because it's a private matter, but originally they offered us 20 percent of what it's worth, then they came back with between 35 and 40 percent," said Alan Johnson, of Hughes.

Barbara Babic, ITD spokesperson, said the agency treats right-of-way negotiations as confidential and therefore declined to comment.

ITD officials said right-of-way disputes involving ITD have only gone to trial one other time in North Idaho in the past 20 years.

The property has been cleared, but not graded, for the interchange project. A $21 million, 5-mile widening project in the Athol and Granite areas will include the elevated interchange at Athol.

Johnson said he's frustrated that ITD has spent more than $300,000 in legal fees on the case to acquire the property rather than try to reach a deal out of court. ITD has contracted with the law firm of Holland and Hart of Boise in the dispute.

Johnson said Hughes has spent $85,000 in legal fees in the matter.

"ITD has bullied people along U.S. 95, offering ridiculously low offers on property," Johnson said. "It seems that ITD has an unlimited budget to litigate rather than pay people fair market value. Other property owners don't have the funds to fight it, so we're trying to stand up for them, too."

Geoff Reeslund of Hughes said his company supports the interchange project, but would like a better offer for the land.

"We just want to be treated fairly," he said. "We want them to get the project built so we can build. Until that's done, we can't do anything."

Hughes has an engineer working on a sewer treatment system for the site.

The developer isn't the only landowner in the corridor upset over ITD's offer for properties.

Dee Jameson, who also represents another property owner, said he has received some funds to allow ITD to move ahead on construction, but a final offer hasn't been accepted.

"We have not come to terms on the value and access," he said.

Jameson declined to say what ITD has offered him and the amount he is seeking.

"We're quite a ways apart," he said. "We're watching Alan's case with our eyes wide open; they may attempt the same strategy with us. We're still attempting to get them to negotiate with us.

"If they need property for a public purpose, they have the right of condemnation, but they also have the duty to pay fair market value for the property and not beat us out of it. I am shocked and dismayed with the heavy-handedness the state is wielding and they hired, in my opinion, one of the most expensive law firms in the state (Holland and Hart in Boise). If the state loses, they will not only be libable for their attorney fees, but ours as well."

Meanwhile, a market study is being performed for the developer's Riverview resort along the Spokane River on the Washington side of the state line.

"The study will determine the demand, room rates and the branding for the site," Johnson said. "We think that it's a good time to start building, and this study will confirm that."

A conditional-use permit was approved to build two hotels, a fast-food business, gas station and restaurant.

Johnson said the project will be built in phases and the first priority will be locking in a hotel.

The state has approved the design for a $1 million self-contained sewage treatment system for the site.