The Lake Leelanau Lake Association (LLLA) has had its nonprofit status questioned by the developers of a proposed expansion of the former Leelanau Pines Campground.
Attorneys from Northgate Leelanau Pines have filed a 90-page complaint with the Internal Revenue Service (IRS) alleging that the groups’ activities violated tax-exempt organizations laws.
“Northgate has a history of bullying and intimidating communities,” said Tom Hiatt, past LLLA president.
In June 2020, the New Hampshire Supreme Court unanimously upheld the Town of Milton’s denial of a special exception for a major expansion proposed by Northgate Resorts for its MiTeJo Campground.
“We’re not going to be intimidated by this,” said Don Baty, member of LLLA’s zoning and water quality subcommittee. “We’re going to continue our efforts.”
In early June 2024, Northgate wrote a letter to the IRS claiming that the association had violated laws regarding the activities in which a tax-exempt organization may permissibly engage. Northgate specifically cited the association’s advocacy work with regard to their expansion plans and requested that the IRS revoke the association’s tax-exempt status.
The developers allege that the association’s involvement is an effort to confer an impermissible “private benefit or inurement.”
Northgate also alleges that the association involvement constitutes political activity, and using donations to hire attorneys to engage in that a activity.
In response the association consulted with legal counsel with expertise in tax-exempt organizations.
“It was their opinion that the association has done nothing wrong and the associations taxexempt status is not at risk,” Hiatt said.
LLLA leaders believe that Northgate filed the tax-exempt complaint to retaliate against the association for opposing their proposed park expansion.
This is the most recent development in Northgate’s battle against Centerville Township over expansion of the former Leelanau Pines Campground on south Lake Leelanau.
In mid-2022, Northgate-Leelanau Pines applied to expand the number of sites at the park from 170 to 342 lots; construct a waterfront pavilion, marina store, boathouse, swimming pools, a splash pad, mini golf, jump pillow, sports court,walking trails and boardwalks. Township planners turned down the request citing concerns about the negative impact of the plan; the destruction of the natural beauty of the shoreline and increases in boat traffic that would result from the proposed development.
Northgate appealed the decision to the township Zoning Board of Appeals, which upheld the township planners decision, as did 13th Circuit Court Judge Kevin Elsenheimer.
LLLA then requested the Circuit Court permit the association to become part of the appeal process, which was approved by the court.
Subsequently, in January 2024, the Circuit Court affirmed the township’s denial of a special use permit.
Northgate has appealed this decision to the state Court of Appeals, which has yet to take the matter up.
After the proposed plans were turned down by Centerville, Northgate went back to the drawing board and filed a lawsuit against the township seeking damages for what it alleged was a violation of its constitution and other rights.
Because the second site plan failed to address many of the concerns the association had with the first site plan, LLLA continued its objections to the second site plan, which was subsequently turned down by township planners.
At the same time the denial of its first site plan application was winding its way through the court, Northgate filed a marina construction and shoreline alteration permit application with the Michigan Department of Environment, Great Lakes, an Energy (EGLE), which conducted a public hearing.
As part of the hearing process, LLLA submitted comment about the negative environmental impact on Lake Leelanau and nearby Rice Creek. The association encouraged EGLE either to deny the permit or condition it on using recognized shoreline best practices to protect nearby fragile ecosystems and avoid harmful sedimentation.
The association does not intend to appeal the EGLE permit because it addresses the association’s concern about environmental harm.
“Because the board believes the Lake Association is acting lawfully and has done nothing to prejudice the association’s tax-exempt status, and because the association’s members continue to feel strongly that Northgate’s proposal changes … threaten the quality and natural beauty of Lake Leelanau, the association is not changing its opposition to (the project).”
