An unneighborly park-encroachment dispute swirling around Bill Gates’ former bachelor pad in Laurelhurst has the rich quarreling with the very rich. Besides calls to the cops, incriminating photos, and the hiring of attorneys, the quiet enclave has become the scene of brazen pruning-shear raids on one resident’s 10-foot Russian laurel hedge.

“We’ve had several shouting matches out there,” says Laurelhurst resident Kate Lloyd, referring to her waterfront neighbors, Libby Armintrout (Gates’ multim illionaire sister) and her husband, Doug. Clippers poised, Lloyd is leading the charge to protect a parklike rectangle of public land and water, called Waterway No. 1, located along mansion-cluttered 43rd Avenue Northeast next to Lake Washington.

Lloyd says the Armintrouts and another wealthy neighbor are using the partially filled old waterway for their hedges and a private marina—without paying any fees. Lloyd thinks that may be illegal. The homeowners, however, say they have all their papers and accuse Lloyd of illegally entering their (and the state’s) property and hacking away at valuable shrubbery.

Lloyd is not copping to anything, but she clearly has a thing about privileged encroachers. Starbucks CEO Howard Schultz had to remove the private driveway he built through a city park in 1994, notes Lloyd, who maintains an anti-encroachment Web site (waterway1.org) and has adopted a park mascot—a beaver named Friend who reputedly slips from the lake and gnaws at Armintrout’s hedge. Other wealthy Seattleites over the years were found to have built swimming pools and tennis courts on city property.

“It’s sort of like we have an aristocracy in Seattle that thinks it can take over parks,” says Lloyd, a self-described artist and writer who is married to a chiropractor and has lived in Laurelhurst 21 years. The Laurelhurst Community Club wants to improve the disputed site, an unofficial park established and maintained by neighbors that features an old basketball court and waterfront access. But Lloyd wants the hedges taken down for wider expansion. The landowner, the state Department of Natural Resources (DNR), is promising a solution to the dispute, though it can’t come soon enough.

“A neighbor, a little granny,” says a horrified Lloyd, “one day went over with pruning clippers and cut some of the parts of the laurel hedge that stick out, and they [one of the homeowners] took pictures of her!” (A community club member says the granny is one of Lloyd’s co-conspirators.)

Nearly a century ago, the contested site was mostly water, a canal for the Laurelhurst Launch that ferried locals to and from Madison Park where they caught the streetcar to downtown. The waterway was partially filled in, and in more recent years, according to Sue Tong, a former resident, was an overgrown lot that turned into a stop-off for teen keggers and other illicit activity. When no city or state agency would act, she says, frustrated residents took their garden tools and cleared the land, then paid to keep the lot trimmed up.

What’s publicly usable today is the hoops court and a grassy area measuring roughly 35 feet wide and 100 feet deep, banked by rows of hedges. Aerial photos and a King County Assessor’s Office map indicate the public plot extends considerably beyond the hedges. The map also outlines the remainder of the old ferry waterway, still controlled by DNR, which reaches about 100 feet into the lake—though it’s not apparent to the naked eye. Two neighbors have private boat docks there.

Armintrout, a social activist and major contributor to the University of Washington, bought the home on one side of the lot for $500,000 from her brother, Microsoft Chairman Bill Gates, in 1994. That’s when bachelor Bill moved out after 11 years, married his Microsoft marketing manager, and was first officially declared the world’s richest man by Forbes. Armintrout and her husband renovated the home into a five-bedroom, five-bath mansion now appraised at $3.6 million. (The extended Gates family has long lived in Laurelhurst and a street there is named after matriarch Mary Gates.)

Neither of the Armintrouts responded to phone and e-mail requests for comment, and no one answered a knock on the door. But Gregg Hirakawa of the Seattle Department of Transportation, which manages rights of way, says the Armintrouts have a use permit for a pie-wedge piece of the filled waterway near the street. It’s an annual permit that requires state approval as well, he says.

Linda Lewis and her husband, Dr. Robert Lewis, live on the opposite side of the park in a four-bedroom home they bought for $2.5 million five years ago. It came with a boat dock, and controversy, attached. “It’s all quite legal,” says Linda Lewis. Their hedge does encroach on state property, she agrees, “but we have done all the paperwork.” Hirakawa confirms that the Lewises have a permit for a pie-wedge piece near the water.

In a 2003 letter to the Laurelhurst Community Club, the Lewises’ attorney warned neighbors to back off any attempts to limit the legal encroachment, stating, “your actions constitute harassment and tortuous interference with our Client’s right of use and enjoyment.” The attorney said the Lewises are “also evaluating potential claims based upon the tortuous activities of Kate Lloyd,” whom he accused of entering the Lewises’ property and damaging their hedge.

Doug Armintrout blames Lloyd for butchering his hedge, too. In a letter to the community club last year, he wrote: “Kate’s act was not only extremely offensive, it was criminal. This is another in a string of incidents where Kate has involved herself in malicious and offensive activity as well as untruths regarding the lot. Regrettably she gives no indication of changing her behavior.”

Lloyd, in return, says, “Everything we’ve tried to do to settle this seems to have been ignored.” An attorney she hired in 2005 questioned the legality of the city permits, prompting Lloyd to push for more reviews. When the community club become less aggressive about the issue, she says, she quit. “I don’t have the right to take my neighbor’s yard, and neighbors don’t have the right to take public property.”

Club president Jeannie Hale says the club envisions a resurfaced court, a pathway, benches, and a play area at the park. Some work has been completed, but “unfortunately, someone ripped out most of the Rosa rugosa and other shrubs, and we retrieved what we could find and replanted them. There was also additional vandalism to the Armintrouts’ laurel hedge, and police reports were filed in that regard.”

But détente may be near. Fran McNair, aquatics steward for the state DNR, says the plan is to have the waterway surveyed and begin charging residents for whatever land the DNR decides they can use. “It’s the first time we’ve tried this,” McNair says. “If it won’t work, we’ll tell them to remove the encroachments altogether.” Monica Durkin, DNR regional manager, says waterway marina fees will also be established.

“If everyone can live with this plan,” says McNair, sizing up the battle, “even if nobody’s thrilled with it, then we’ve got a good solution.”

randerson@seattleweekly.com