PETOSKEY, MI – The federal government will oversee a Northern Michigan cottagers’ association that had required prospective cottage owners to be practicing Christians.

The Bay View Association of the United Methodist Church, an idyllic resort near Petoskey, amended its bylaws last year after membership overwhelmingly rejected the requirement that only church-going Christians could join the association, required for cottage ownership.

The association was subject of a federal lawsuit and a government complaint that are now being settled.

A consent decree calls for the federal government to oversee the association’s transactions with prospective homeowners for five years. The agreement awaits a judge’s approval.

Attorney Sarah Prescott sued on behalf of cottage owners opposed to the religion requirements. Her clients objected to Bay View considering a buyer’s religion in granting acceptance into the association.

She said that Bay View has to alter its bylaws and “prominently state” in advertising and application materials that it will not discriminate.

“Among the other changes are orders to strike provisions that ensure Methodists form a majority of the community’s association,” she said.

Bay View Association, which has been affiliated with the United Methodist Church for 144 years, will no longer require that a majority of its Board of Trustees be members of the church.

Jon Chism, the Board of Trustees president, said in a statement: “We are happy with these agreements. We believe that they will be positively received throughout Bay View and allow us to focus on reconciliation and fulfilling our Mission Statement.”

Last year, 69 percent of cottagers voted against limiting membership to those of Christian faith.

Bay View Association said its mission remains: “To be an institution in which Christian values and traditions are central; to enrich the human experience for individuals and families within Bay View and the surrounding community through a seasonal program of religious, education, cultural, and recreational opportunities; to provide a Christian perspective in a changing world.”

Methodist ministers founded the association – a private group of cottage owners on the shores of Little Traverse Bay – in 1875. It acted as a municipal body under an 1889 law, the lawsuit contended.

A group of cottagers – known as Bay View Chautauqua Inclusiveness Group - filed a federal lawsuit two years ago alleging religious discrimination under the First Amendment and violations of the federal Fair Housing Act, the state's Constitution and civil rights laws.

The lawsuit said that Bay View once required cottage owners to be Caucasians and had religion restrictions, including a quota on Catholics.

Religion restrictions narrowed the pool of potential buyers. The restrictions also meant some owners could not leave cottages to surviving spouses or children if their religions were different.

In a letter to members, the Board of Trustees said it approved the consent decree on Tuesday, July 9.

It said the five-year monitoring period by the U.S. Department of Justice “refers to the period of (U.S. Department of Justice) oversight, not to the length of Bay View’s commitment not to use religion as a factor in membership decisions – Bay View’s commitment is permanent.”

An important priority for Bay View was maintaining its status as an association “that includes Christian programming and activities, and our Mission Statement remains unchanged.”

The Board of Trustees said that the lawsuit tried to classify the association as a governmental entity, which would have prevented providing Christian programs and activity under the First Amendment. A mediator told the board that that classification would have “presented an existential threat to Bay View as we know it and, despite the strength of our defenses, no one can ever accurately predict how a judge might rule. An adverse ruling would have been devastating,” the Board of Trustees letter said.

Applicants for membership will no longer require support of Bay View’s mission but under the compromise, applicants “Agree to respect and preserve the history and values of the Association: To enrich the human experience for individuals and families within Bay View and the surrounding community through a seasonal program of religious, educational, cultural and recreational opportunities, in a manner consistent with Christian values.”

The Department of Justice said that a Methodist-majority board would not be legal. The requirement, adopted in 1986, was intended to strengthen ties to the United Methodist Church and use the church’s tax exemption. Bay View will now file for its own.

Bay View, through its insurance company, will pay $75,000 in plaintiffs’ attorney fees. The agreement does not require it to pay damages or fines.

Bay View has been named one of the 12 "Prettiest Painted Places" in the U.S., with its colorful, Victorian-era "gingerbread" cottages. It offers its members – as well as the surrounding community - religious, educational, cultural and recreational programs during the summer months.

The 337-acre development includes, 444 cottages, Bay View Historical Museum, a library, roads, parks, a chapel, two privately owned inns and a bed and breakfast. The association leases property to the cottage owners.

Multiple residents and at least one applicant filed complaints in 2017 with the U.S. Department of Housing and Urban Development. The agency conducted an investigation and tried, unsuccessfully, to reach an agreement with Bay View.

In February, the secretary of HUD found that Bay View “engaged in unlawful discriminatory housing practices and retaliation against the complainants.” The U.S. Attorney General filed a complaint alleging that the association’s bylaws illegally restricted home ownership to practicing Christians.

The parties later reached the settlement.

The government said in court documents that prospective buyers, once entering a contract for sale, have to submit a membership application, be interviewed by a member of the membership committee then be approved by a two-thirds vote by the Board of Trustees. Those seeking to accept transfer of ownership in an inheritance, for example, also have to become members within a year to avoid having to sell, records said.

The plaintiffs who brought the lawsuit said in a joint statement: “We are pleased with the results and joyfully look forward to putting this lawsuit behind us all. It was a last resort for our group, and one we reached for only after we had exhausted every other opportunity. Our message has always been one of tolerance, inclusion and love for one’s neighbor, and we know that Bay View will be stronger than ever as it aligns with federal and state law.”