Montana Judge Orders Venue Change in Lease Lawsuit

Case Moved Out of Madison County

VIRGINIA CITY, Mont. — A district court judge has ruled that a lawsuit brought by business owners in Virginia City over new state lease terms must be heard in Lewis and Clark County instead of Madison County. The decision shifts the next phase of the legal fight to the state’s capital region, where the agencies involved are based.

The lawsuit centers on new lease agreements issued by the Montana Department of Commerce and the Montana Heritage Commission. Under the new terms, businesses operating in Virginia City would be required to pay 15% of their gross revenue to continue using state-owned properties in the historic mining town.

Local Businesses Say New Terms Are Unworkable

Business owners challenged the lease structure, saying it threatens the future of longtime establishments.

Shauna Belding spoke on behalf of her husband, who has operated Bob’s Place for nearly 30 years. The restaurant is known for pizza and for being a first job for many local teens.

"I'm pretty disappointed in the fact that the state agencies aren't forming a partnership with us at this point," she said.

Stephanie Kruer, the attorney representing the plaintiffs, said the 15% gross revenue requirement would place an impossible burden on restaurants.

"There is a giant disconnect between the Department of Commerce and the Heritage Commission with respect to these new leases," Kruer said. She argued that the two sides had long operated as partners, but that relationship has deteriorated. "At this point, they are canceling the partnership with very little opportunity for us to get any headway on how that's going to turn out."

Restaurateur Says Uncertainty Threatens His Future

Jason Lange, who operates the historic Wells Fargo Steakhouse, said the prolonged uncertainty has left him exhausted as he prepares for the busy summer season.

"I haven't even slept in two days. I mean, the attacks that are coming down from the Department of Commerce and Montana Heritage Commission, it's just a real stressor, and mentally I'm fried right now," Lange said.

Lange added that if he cannot open this summer, he may be forced to leave Montana to find work.

"I don't have many options. I mean, there's not a lot of opportunity for a guy like me. I mean, I'm not gonna go… I'm not a burger flipper. It's just not in my repertoire," he said.

Attorney Points to State Messaging on Supporting Small Businesses

Kruer also noted that the state publicly promotes its support for small businesses.

"It's very plainly stated on the department's website, it says 'Montana is open for business,' and they promote and assist and help fund small business... that is their charge," she said. "We are a small business. We need that support and promotion, and we don't need controversy and closed doors."

State Declines to Comment on Active Case

A spokesperson for the Department of Commerce said the agency does not comment on ongoing or potential litigation. Earlier in the week, the department said the state is working to fill vacated business spaces in Virginia City.