KALISPELL -- The main lodge was decaying, with a rotting foundation, sagging porches and roofs, crumbling courtyard and chimneys.

Other cabins in the historic Kootenai Lodge complex were in even worse shape.

But a costly transformation has been under way for the last year and a half on the northern shores of Swan Lake. It has involved a good share of restoration work along with a big dose of modernization and development.

It is the pet project of Paul Milhous, a developer from Boca Raton, Fla., who has a home just across the Swan River from the Kootenai Lodge. And it has been a controversial project, drawing stiff opposition from neighbors as it advanced through Lake County planning procedures two years ago.

Milhous now says the work that has been done has impressed many people in the Bigfork-Ferndale community.

''We have knocked on doors and asked people to come out and see what we've done,'' Milhous said recently while leading a tour of the complex. ''People visualized something that wasn't going to happen.''

The ''Historic Kootenai Lodge Condominium Subdivision,'' as it was described during the planning process, led many people to believe that Milhous intended to deface a historic site with 42 crackerbox condominiums, said Carol Beck-Edgar, who does sales and marketing for Milhous.

''Condominiums,'' she said, is a legal term for common ownership of the land. ''These are single-family homes built in the style and tradition of the Kootenai Camp.''

But there are still some ''Stop Milhous Condos'' signs along Sunburst Drive, which Milhous recently repaved all the way to Montana 83, along with installing 2½ miles of sewer line leading to a new sewage-treatment plant that he built on the other side of the highway.

The development, now well under way, is anything but crackerbox.

The entire 14,000-square-foot historic Kootenai Lodge has been soda-scrubbed and refinished, inside and out. Four huge stone chimneys were taken down and rebuilt. Original floors were refinished. Rotting cedar posts were replaced. The building was reroofed and sagging porches rebuilt.

A big part of the job involved lifting the two wings of the structure to replace rotting foundations. The lodge's great room rested directly on soil that had to be dug out and removed bucket by bucket to allow for construction of a proper foundation.

The sprawling rock wall at the entrance to the lodge was rebuilt and the crumbling concrete courtyard replaced, complete with replicated castings of simple drawings the famed western artist Charles M. Russell engraved in the courtyard.

''When they poured the concrete, he took a stick and drew these,'' Milhous said.

Decaying mounts of elk, caribou, bears, bucks and bison were restored, as were an antique pool table and other fixtures in the lodge.

But it was not a strict historic restoration project. The lodge has been modernized into a fancy clubhouse capable of handling a recent 300-guest wedding reception.

There were conversions in the interior, with three old bedrooms being replaced by a bar, media center, and guest room. Bathrooms were upgraded but maintain a traditional look with antique urinals and mahogany stalls.

A kitchen for catering events was installed. New furnishings were brought into the lodge, which was outfitted with high-tech digital temperature control, lighting and a sound system with speakers completely camouflaged as part of the interior log walls.

''It was a huge amount of work,'' Milhous said.

Without the work that was done, Milhous is convinced the lodge would have become completely dilapidated within a few years.

Beck-Edgar describes the transformation as a ''modern version of what happened before,'' when the lodge complex was developed as an elite fishing camp by captains of the Anaconda Copper Co.

Cornelius ''Con'' Kelley, the company's chief executive officer, and chief legal counsel Lewis Orvis Evans established the camp in 1908 and gradually developed it into a place that would attract dignitaries such as Will Rogers, Charles Lindbergh, John D. Rockefeller and Queen Wilhelmina of the Netherlands.

Russell was a frequent visitor.

The camp was served by a staff of up to 70 people in the summer, while Kelley and Evans ran the copper company from a small office cabin with a wall map that read, ''The United States of Anaconda.''

That cabin still stands and will be restored as part of the project.

There are a total of 11 historic living cabins on the 42-acre property, and most of them are being converted into large and pricey homes.

The original structures are being taken down and rebuilt log by log and stone by stone to serve as the centerpieces for often expansive modern additions with features such as green roofs that match the camp's historic look.

The 5,300-square-foot ''Evans'' cabin, once occupied by Orvis Evans and his family, is one structure that was large enough to be restored and modernized within its original floor plan overlooking the Swan River.

It has a listing price of $5.9 million.

So far, Milhous has five homes built or under construction and two have been sold so far. The least expensive home is listed for $2 million.

Milhous said he expects the buildout of 42 homes over the next four years.

''As we sell, we'll keep building,'' he said.

Milhous and his brother, Robert Milhous, have been in the building business for years, and he says he has never had a project quite like Kootenai Lodge Estates. Its mixture of historic restoration and development has been challenging, with craftsmen taking the time to do jobs that could be done much more quickly in a conventional construction project.

A towering example of Milhous's interest in maintaining the Kootenai camp character was the relocation and restoration of a colossal barn once used for polo ponies. The barn was lifted and braced with huge steel I-beams that supported wheels. A hitch was fitted to the transportation frame and a semi-tractor gradually moved the barn to a new location, where it could rest on a newly constructed foundation.

''It was unbelievable,'' Milhous said of the moving project. Now the barn is loaded with antique canoes, furnishings and other items that came with the property. And right next to the barn is a log building that Milhous intends to use as a museum for displaying some of the historic objects.

''Obviously, this is financial, too. I'm not here for my health,'' Milhous said. ''We hope to produce a profit. This is a $160 million project.''