DENVER – U.S. Forest Service officials were dealt a blow this week when a federal court ruled that the agency unjustifiably withheld documents related to the proposed Village at Wolf Creek development.

A Colorado U.S. District Court on Wednesday found that the Forest Service violated the Freedom of Information Act by failing to conduct an adequate search of documents and did not properly explain its decision to withhold thousands of pages of documents from the public.

Senior Judge Wiley Y. Daniel gave the Forest Service till Oct. 30 to conduct a complete search.

He also ordered officials to provide “sufficient explanation” of any withheld pages by the same date.

“The Forest Service has failed to be transparent, has withheld documents and has committed resources to approving this irresponsible development while failing to keep the public informed,” said Matt Sandler, attorney for Rocky Mountain Wild.

A spokesman for the U.S. Forest Service’s Rio Grande National Forest Office referred comment to the Colorado U.S. Attorney’s Office.

“The Forest Service intends to carry out the steps ordered by the court,” said Jeff Dorschner, spokesman for the Colorado U.S. Attorney’s Office.

Texas billionaire B.J. “Red” McCombs has been trying since 1986 to build the Village at Wolf Creek at the base of Wolf Creek Ski Area. His proposal is to swap private land in a meadow below the ski area for Forest Service land abutting U.S. 160.

The project would create hotels, townhouses, condos and restaurants within the remote area.

Developers would offer 177 acres of private land to the Forest Service in the Rio Grande National Forest in exchange for 205 acres of federal land.

Environmentalists had requested records concerning communications between the Forest Service and other agencies, developers, third-party interests and the public.

But the court found that the Forest Service inappropriately limited its search and redacted documents.

Officials had claimed an attorney-client privilege exemption. But for many of the documents, the court found that the “justification does not offer sufficient detail as to the contents of the documents and why the attorney/client privilege should be applied in such a broad manner.”

Developers thought they had crossed a major hurdle in May when the U.S. Forest Service gave the land swap the go-ahead. But additional lawsuits have again slowed progress. At least two lawsuits remain in limbo.

Environmental interests and the developers behind the proposed development signed an agreement in July to prohibit construction until the legal hurdles are crossed. That agreement remains in place.