AUGUSTA -- The Moosehead Lake region can absorb the impact of the 2,000 new housing units a Plum Creek development proposal for homes and major resorts could bring, Land Use Regulation Commission staff said Tuesday.

Commissioners met Tuesday for the first of two days of deliberations on the controversial development proposal some fear would change the rural character surrounding Maine's largest lake.

Commission Chairman E. Bart Harvey said commissioners won't issue a final decision whether to approve the proposal until later this summer.

But staff members said they don't feel the impact of the estimated 975 homes and resort accommodations for 1,050 people would have an overly damaging impact on the area.

They acknowledged some areas, such as the now relatively undeveloped Indian Pond, could suffer from reduced scenic value due to the development. But they said losses in scenic and recreational opportunities would be offset by Plum Creek's plans to put large parcels of land under conservation easements to protect them from future development.

Commissioner Edward Laverty, who earlier in Tuesday's meeting expressed concern about the environmental and scenic impact of several specific parts of the proposal, said it is important to also consider potential positive impacts on the area's struggling economy.

"I'm also looking at the impact on what is becoming a rare, unique, endangered species: people who live and work there," Laverty said. "I think the area can absorb a substantial amount of economic development. I'm prepared to at least consider this, especially in light of the gains in conservation easements."

In the largest subdivision plan ever in Maine's North Woods, Plum Creek wants to rezone about 20,000 acres in the Moosehead region to allow development.

Plum Creek officials pledged, if their proposal is approved, to permanently protect more than 400,000 acres in the region through easements and land sales.

Environmental groups have criticized the proposal as too big and disruptive for such a rural area.

Although the commission did not allow public comment, many of the approximately 60 spectators at Tuesday's session wore stickers stating "Too much development: Save Moosehead."

LURC staff member Agnieszka "Aga" Pinette said the numerous changes to Plum Creek's proposal recommended by staff are "... a set of recommendations, if accepted, we believe would result in a concept plan that meets the review criteria."

A major piece of the development has been a large number of houses and a large resort on Moosehead's Lily Bay.

LURC staff recommend a large parcel of land near Lily Bay marked for housing development by Plum Creek be removed from the plan, though the resort there would be allowed to remain.

The area marked for housing near Lily Bay has been controversial because of potential impacts on the habitat of the rare Canada lynx. Commissioners expressed concern approving development in that area would result in legal action by those concerned about lynx habitat.

"The removal of that zone is a huge step toward making this development acceptable," said Commissioner Steve Schaefer. "It's a smart move that protects everybody, legally."

Evan Richert, a consultant working with LURC staff on the project, said an analysis indicates the new development would generate much more money from property, income and sales taxes than the cost of providing public services, such as fire protection, to the resorts and homes in the development.

Keith Edwards -- 621-5647

kedwards@centralmaine.com