RED LODGE - Russ Squire didn't anticipate a gravel and asphalt operation across Highway 78 when he planned The Spires, his upscale sustainable subdivision on the northwest edge of Red Lodge.

"Our investment is toast if this happens," Squire said. "If this happens, we're dead. That's the end of our development, because nobody will buy in here."

He knew there would be commercial activity across the two-lane road, he said, but no one imagined heavy industry on the picturesque bench above the town. If he had known, Squire said, developers wouldn't have sunk $8 million into the project. They would have moved it elsewhere.

He's not the only one fretting and fuming about a proposed 40.2-acre gravel pit, crusher and asphalt operation on the Draper Ranch across and upwind of hundreds of homes and even more residential building lots. As news circulated of a permit application for the Draper Site submitted by Riverside Contracting Inc. to the Montana Department of Environmental Quality, property owners worried that their paradise in the shadow of the Beartooth Mountains would be lost.

"This is not good for people. It's toxins, noise, dust and increased traffic," said Ed Williams, who owns a home in Red Lodge Country Club Estates. "Property values will be affected, too. They could decrease 10 to 50 percent, depending on how close you live."

In a letter to Squire, real estate agent Dorthea Lowe of Sky Lodge Properties wrote, "One of the assets of Red Lodge is air quality, and for the sake of a handful of seasonal jobs, this shall be compromised? Red Lodge is a recreational area, which will lose its appeal once poisonous fumes are starting to drift across the city, and it will negatively affect the marketability of any real estate and tourism in Red Lodge, quite possibly making us prisoners in our own homes and reducing all property values in and around Red Lodge by up to 56 percent."

Since Aug. 1, when Squire sounded the alarm, property owners surrounding the proposed gravel operation have scrambled to stop it, filling the council chamber at City Hall and the commissioners' room at the Carbon County Courthouse annex.

Within a matter of days, 60 percent of county property owners adjacent to the proposed gravel operation had signed a petition requesting that county commission establish an interim zoning district as an emergency measure to halt the gravel operation and to prevent any other heavy-industrial uses. Feelings are running so strong that some are already contemplating a class action lawsuit against the county and the developers if the project is allowed to move forward.

Squire and other residents who live near the proposed site frame the conflict in terms of hundreds of little-guy property owners against a single landowner and Riverside, a large, Missoula-based corporation.

Plans are in the works for reconstruction of Highway 78 from its junction with Highway 212 in Red Lodge to five miles west, Mayor Betsy Scanlin said. The highway project may be the impetus for opening a gravel pit on the Draper Ranch, she said.

"But I don't really know. I'm not privy to that information," she said.

Ed Draper, owner of the property proposed for the gravel and asphalt operation, declined to be interviewed. So did Cale Fisher of Riverside, who is listed on the DEQ application as a person "familiar with the plan of operation and on-the-ground activities."

Fisher said only that Riverside is working with DEQ and that questions about the project should be directed there.

Clearly no love is lost between Squire and Draper, who confronted the developer on a gravel road near the Draper residence as Squire escorted a Gazette reporter and photographer back from viewing another gravel pit on the ranch. Draper accused Squire of going behind his back and said that he did not trust him, referring to complaints that arose from Squire's work while employed in Bozeman with D.A. Davidson.

(In a settlement with the state Auditor's Office two years ago, Squire neither admitted nor denied allegations of mishandling accounts. The brokerage resolved the complaints with a payment of $2 million to one customer and $110,000 to a couple with a joint account.)

According to documents accompanying the petition to the County Commission, 85 percent of property owners in the proposed interim zoning area either use or intend to use their property for residential purposes. Six percent of owners use their land for agricultural purposes, and another 6 percent is used for commercial or light-industrial ventures including a cement plant and storage units.

Those figures don't include the Spires subdivision or the Red Lodge Country Club Estates, which are within the city limits and, thus, not part of the zoning petition before the commissioners. Mayor Scanlin said the city can do little because the proposed operation is outside city limits.

Squire said The Spires is plotted for 96 home sites in its first phase, though almost all are empty. He said he doesn't expect much interest until the nation's economy improves and until the gravel pit issue is decided.

Clay Cummins, chairman of board of the Red Lodge County Club Estates Property Owners Association, said the Country Club has 629 developable lots - some less than a mile from the proposed site and all within two miles. He estimates that 40 percent of those lots have homes built on them.

The homeowners association board of directors unanimously voted to oppose the proposed development, contending that it would release disease-causing toxins into the air, dewater the surrounding area, degrade water quality, bring undesirable noise and visual impacts and reduce property values.

The application, however, notes that land near the site is already used for industrial and commercial purposes. A cement plant and storage business operate next to the proposed site, and a Montana Department of Transportation maintenance yard is nearby.

According to documents filed with DEQ, the estimated depth of mining from the surface is 25 feet. An estimated 700,000 cubic yards of gravel would be mined.

The mining area would be 29.7 acres with a crusher, hot plant and other facilities on the remaining acreage. Mining activity and reclamation will be completed in 2027, the application said. Ultimately, the site will be reclaimed as a wildlife pond, it said.

Contact Lorna Thackeray at lthackeray@billingsgazette.com or 657-1314.

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• DEQ considers impacts of gravel pit development
• Red Lodge residents concerned about plans for gravel, asphalt operation