In December 2000, the Federal Aviation Administration approved the airport layout plan. To the small group of people who negotiated the Development Agreement, this seemed to absolve any potential mistakes made while drafting the contract.
But not everyone liked the FAA's decision. Conservationists grew concerned. An expanded airport meant potentially tens of thousands of additional visitors to the Eastern Sierra, which would leave an unknown tread on the environment.
The conservationist organizations, along with the state of California, sued the US Department of Transportation "including the FAA" for approving the project. They argued that the environmental impact on the Town was never fully considered.
The judge sided with the state and conservationists. He blocked the plan, saying it would move forward only if the airport performed an additional environmental examination.
Terry Ballas' hotel portion of the development agreement, known as "Hot Creek", would likely play a role in any new environmental assessment. Ballas transferred the rights of the Hot Creek project to a new company called Mammoth Lakes Land Acquisition (MLLA). His motivation, and the identity of the company's shareholders, is not publicly disclosed.
But when the Town hired a new interim town manager, Charlie Long, who was openly hostile to the Hot Creek project, Ballas probably felt he would need more legal and financial support.
He most likely sensed conflict was inevitable.