County Threatens To Sue Builder Over Money For Schools

December 20, 1990|By Peter Hermann | Peter Hermann,SUN STAFF

County officials are considering a lawsuit against the developer of Odenton's Seven Oaks residential community, saying the company has failed to provide a bank guarantee for a $2.1 million payment for a new elementary school.

It is now nearly one month past the deadline for the Halle Cos. to secure the letter of credit from Sovran Bank. Halle's payment is due July 1, 1991.

Deputy County Attorney Stephen LeGendre said yesterday his office has waited long enough.

"I don't know what options I have," he said. "(Warren) Halle has said to give him a few days and he would have the letter. But I have given him plenty of time. It is obvious it isn't going to happen now."

The school agreement Halle signed two years ago allows the county to issue a stop work order and pull building and occupancy permits if the payment schedule is not met. Such a move would halt further construction on the 4,700-unit development being built opposite Fort Meade.

LeGendre said yesterday he believes he could halt construction immediately, but may decide to take the issue to court instead.

"It is now up to me to make my decision. I don't know what it will be or how soon I can do it, but I certainly plan on doing it immediately."

LeGendre said he held off taking action for so long because of negotiations between the county and Halle. He would not comment on what was discussed.

Stephen Fleischman, vice president of Halle, could not be reached for comment. He said during a court hearing last month that his company may have difficulty attaining a third letter of credit after defaulting on the second payment.

Halle purposely defaulted on that $2.1 million payment July 1, claiming the county reneged on a deal to enlarge its Patuxent Waste Water Treatment Plant.

Without the expansion of the plant, Halle says it can build only about 2,900 homes, eliminating the need for a new school.

Halle has sued the county for $18 million, seeking the return of money it had invested in roads and parks and the first $500,000 school payment it made last year.

The company unsuccessfully sought an injunction last month to prevent the county from cashing in the second letter of credit until the suit could be heard. Sovran Bank, which had issued the guarantee, was forced to pay the county the money.

Fleischman testified that if the the bank was forced to pay the second school installment, the bank might call in other loans totaling $25 million. That could cost his company its credit rating and force it into bankruptcy.

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