A 20-year-long park-encroachment dispute involving Bill Gates' former bachelor pad in filthy-rich Laurelhurst is about to be resolved by state officials, though not necessarily ended.The Department of Natural Resources says it is finishing up lease agreements with two landowners that will grant them partial rights to the rectangular state-owned public parkland known as Waterway No. 1, a mostly filled-in historic ferry landing along the Lake Washington waterfront. Yet resident and opponent Kate Lloyd says the new permits will still block access to the public's land and "authorize a large dock that restricts access to Waterway 1 for kayakers and wildlife, and causes pollution problems."Lloyd, an artist married to a chiropractor, is thought to have undertaken the unauthorized pruning of an overlapping 10-foot hedge bordering the shoreline property of Gates' wealthy sister Libby Armintrout and her husband, Doug, who wrote a letter to the local community club, saying "Kate's [hedge-clip] act was not only extremely offensive, it was criminal"—but took no further action. The Armintrouts own the $3.6 million 43rd Avenue Northeast home where Gates lived until he married and moved up in 1994 to a somewhat nicer home, valued at roughly $115 million, in Medina.The Laurelhurst pad has been the eye of an unneighborly storm which includes shouting matches between Lloyd and the Armintrouts, the former claims. State DNR Deputy Supervisor Bridget Moran hopes to end the dispute, she says, after a long process that produced two lease agreements to permit use of part of the state property and waterfront, once 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 residents have kept the lot trimmed and park-like. It consists of a hoops court and a grassy area measuring roughly 35 feet wide and 100 feet deep, banked by rows of hedges.One lease has already been signed with the Armintrouts, the state says. The other will soon be signed with the neighbors on the other side of the waterway, Robert and Linda Lewis, costing each household about $10,000 annually to encroach onto the greenery and use the waterway for their boats.To Lloyd, however, that amounts to theft of public property. "Together," she says, "the encroachers have fenced in or blocked more than two-thirds of the park's Lake Washington waterfront. Only 27 feet of the waterway's shoreline remains unencumbered for public use." Noting that the DNR lease process involves the filing of a Determination of Non-Significance, she adds: "How much of a public waterfront park should an adjoining private-property owner be allowed to appropriate before the theft is considered significant?"But Moran says the deed is done. "In the end, we felt these partial uses will not impede the intent of what that land is for, public use," she says. "We try not to get involved in neighborhood disputes. The intent is to make sure the peoples' land is managed accordingly, and we think we've done that."