An angry Brent McQuarrie threatened to sue Provo a few months ago after the City Council again delayed a decision on his controversial housing project on the Seven Peaks Golf Course.

On Thursday, McQuarrie and his brother Scott made good on that threat. The owners of Seven Peaks Development Corp., filed a 63-page complaint in U.S. District Court alleging the City Council arbitrarily and capriciously denied their request last month to rezone 51 acres for a 300-unit housing project.The McQuarries figure Provo owes them $12 million in lost profits and expenses incurred trying to develop the land. They seek an injunction to prevent the Council from enforcing its ruling and ask the court to rezone the property.

In addition to the City Council and Provo City, the complaint names Councilman Dennis Poulsen and Councilwoman Cindy Richards as defendants.

"We've been at this project for three years and have done everything the city has asked us," said Scott McQuarrie. "Unfortunately, the municipal council changed the rules so many times and the process dragged out so long that it has cost us millions of dollars."

Though he could only whistle at the amount in damages Seven Peaks wants, the complaint didn't surprise Council Chairman Greg Hudnall, who voted against the rezoning in a June 16 meeting.

"I'm not offended by it. They told us they were going to do it. I think it's sad because it pits city against citizen," he said.

The McQuarries initially proposed 494 houses, twin homes and condominiums on the small, hilly 18-hole golf course they own just north of the Seven Peaks Water Park. After numerous meetings and contentious public hearings, they pared it to 300 units. The developers also offered to maintain 66 acres of open space to appease residents and officials who believe homes consumed too much of the land.

"The McQuarries were trying to hit a target that was always moving. Worse than that, it was probably a target that didn't exist at all," said Charles Abbott, Seven Peaks attorney.

Some council members, particularly Poulsen and Richards, failed to be impartial, Abbott said. The two helped instigate and plan neighborhood efforts to undermine the project, he said.

A group called Concerned Families of Provo went to great lengths to stop the project. It was not named in the lawsuit, but Abbott said other defendants could be identified later.

"I'm not sure how you not act without prejudices and biases as a council member," Hudnall said. Poulsen and Richards did not return messages left on their home answering machines.

Bonnie Callis, one of the group's organizers, said Poulsen and Richards weren't involved, but "they were more open-minded to our cause." Residents wrote letters and provided information to all the council members to sway them to their side. Some were more receptive than others, she said.

Brent McQuarrie said he believes "certain council members buckled under political pressure."

Furthermore, Abbott charges that Councilwoman Shari Holweg, the seven-member council's swing voter on the issue, acquiesced to public clamor, making her decision not only arbitrary but illegal.

"The word arbitrary is anything but descriptive of the decision I came to," she said. Holweg said anyone who knows how she does things knows she doesn't give into public clamor. Yet she says her investigation into the issue found residents "overwhelmingly against rezoning."

Just two weeks ago, Callis initiated a request to change Provo's general plan to keep the Seven Peaks area from ever becoming housing. Poulsen jumped on the bandwagon and even tried to get Callis a refund on the $560 application fee she paid. He has company in Holweg who agrees that the general plan should be amended because Provo has already let valuable open space slip away.

Although the McQuarries' lawsuit doesn't address that, Abbott said Poulsen would be wise to back off until the matter is settled.

Seven Peaks is not seeking immediate action on its complaint. Abbott does not expect court arguments for at least a year.