For the second time, a federal court blocked a land exchange that is key for the development of The Village at Wolf Creek.

Leavell-McCombs Joint Venture – spearheaded by Texas billionaire B.J. “Red” McCombs – is proposing more than 1,700 units that could house about 8,000 people near the Wolf Creek Ski Area.

This week, Judge Richard P. Matsch denied a request from lawyers representing the proposed development to reconsider a decision he issued in May.

“The Forest Service cannot abdicate its responsibility to protect the forest by making an attempt at an artful dodge,” Matsch wrote in his decision.

The agency tried to circumvent its obligation by relying on a law that requires it provide access to private land, he wrote.

Lawyers for Leavell-McCombs Joint Venture argued the Forest Service considered and rejected restricting the proposed development, as required by law.

The decision is the latest in a development saga spanning nearly 30 years, and it currently centers on Rio Grande Forest Service Supervisor Dan Dallas’ approval of a land exchange in 2015. The exchange gave developers land adjacent to U.S. Highway 160, and in the swap, the Forest Service received land that included wetlands below Wolf Creek Ski Area.

For two years, a coalition of environmental groups has challenged the Forest Service’s decision, arguing the agency unlawfully limited the scope of an environmental analysis and was unduly influenced by McCombs and his political pressure throughout the process.

The new order affirms the coalition’s position that the Forest Service did not analyze protections for natural resources and the Canada lynx, said Matt Sandler, an attorney for Rocky Mountain Wild, who worked on the case.

“I certainly let out a sigh of relief yesterday when I saw this come in and know we have this strong order that if they want to appeal, we can defend,” Sandler said.

Leavell-McCombs Joint Venture could appeal the decision to the 10th Circuit Court of Appeals or restart the application process for the project through the federal government, he said.

An attorney for Leavell-McCombs, Bill Leone, said the judge’s decision is contrary to federal law that prevents the federal government from controlling private land.

“This land is owned by a private party, and he has a right to use that land,” Leone said.

The environmental review process showed the land exchange is a better way of giving Leavell-McCombs Joint Venture access to its property than a road would have been, he said.

McCombs has been dedicated to the project for decades because it will bring jobs and economic benefit to the community, Leone said.

“I think it’s unfair the environmental review process has been used to try to stymie those efforts,” he said.

There is still interest in the project, but Leone could not say what steps the developer might take next.

“We’re considering our legal options,” he said.

mshinn@durangoherald.com