The county yesterday cashed a $2 million letter of credit against the developer of the 4,700-unit Seven Oaks development in Odenton, forcing Sovran Bank to pay the second installment for a new elementary school.
The state Court of Special Appeals denied a request Wednesday by the Halle Cos. to stop the county from cashing the letter until an appeal could be heard. The bank is responsible for paying the $2 million, and Halle, in turn, owes the bank. The company also owes the county an additional $60,000 for lost interest.
Halle purposely defaulted on the payment -- the second of three payments totaling $4.7 million -- on July 1, claiming the county reneged on a deal to expand the Patuxent Waste Water Treatment Plant.
Because the sewage plant was not expanded, developer Warren E. Halle says he can build only about half of the Seven Oaks project and that, therefore, a new school is not needed.
The rulings make it possible for the county to revoke building and occupancy permits for Seven Oaks, which would bring the residential project to a halt.
But Deputy County Attorney Steve Legendre said he would not revoke occupancy permits because that would hurt people who have bought homes in Seven Oaks, but who haven't yet moved in.
Legendre said Wednesday that he will not revoke construction permits unless he has a problem getting the money from the bank or Halle.
"If we have the money, there is no reason to revoke the permits. At this point, we don't anticipate that happening."
Legendre said the letter of credit has been sent to the bank and he expects to hear from Sovran officials today or Monday.
Walter Childs, Halle's attorney, said he "can't see any reason" for the county to halt the project.
Halle sued the county for $18 million last month, seeking money it has already paid for roads and parks and for the first $500,000 school installment it paid in 1989. Halle was in court last week seeking an injunction to prevent the county from cashing in the letter of credit -- a written guarantee by the bank to pay the installment -- until the lawsuit could be heard.
But a Circuit Court judge ruled against Halle last Friday. The company filed an appeal and sought another injunction to prevent the county from cashing the letter until the appeal is heard. That request was denied Wednesday.