It isn't even a hole in the ground yet, but county officials already have $2.5 million in hand for Odenton's new elementary school.
Sovran Bank wrote out a check last Thursday for $2 million -- the second of three installments pledged by Halle Cos. for a new school in its Seven Oaks development. The Silver Spring-based builder had promised to pay a total of $4.7 million.
Halle purposely defaulted July 1 on its payment, claiming the county reneged on a deal to enlarge the Patuxent Waste Water Treatment Plant.
Without expansion of the plant, the Silver Spring-based developer says it can build only about half of the proposed 4,700 homes, eliminating the need for a new school.
Sovran guaranteed Halle's school commitment with a letter of credit to the county. When the county threatened to cash the letter, Halle went to court twice to try to stop the transaction.
Stephen N. Fleischman, vice president of Halle, testified at one court hearing that his company could lose its credit rating and be forced into bankruptcy if the county cashed the letter because creditors might call in other loans totaling $25 million.
Sovran officials could not be reached for comment yesterday.
Halle sued the county for $18 million last month, seeking the return of money it has invested in roads and parks and the first $500,000 school payment it made last year. Halle unsuccessfully sought an injunction earlier this month to prevent the county from cashing the letter of credit until the suit could be heard.
The company lost an appeal and a second request for an injunction.
Halle must now repay Sovran for covering the $2 million letter of credit.
The rulings against Halle have opened the door for the county to revoke building and occupancy permits for Seven Oaks, which could bring the project to a halt.
Deputy County Attorney Stephen LeGendre has said he will not revoke occupancy permits because it would hurt people who have bought homes in the development but not moved in yet. However, he has left open the possibility of stopping further construction.
He said Halle has until Nov. 29 to secure a second $2 million letter of credit for the third school payment, due July 1, 1991. LeGendre said if the company fails to get the guarantee, he could start revoking permits.
"We will start figuring out what are options will be," he said.
Fleischman said Tuesday he does not know if he even will apply for the letter because he does not know if the bank will consider Halle a good credit risk. "I have no idea at this point. To be honest, I haven't thought about it."