Well work pits town, developer

January 04, 1994|By Traci A. Johnson | Traci A. Johnson,Staff Writer

The developer of the 171-acre parcel in Union Bridge known as the Phillips property is suing town government for trying to draw upon the developer's $78,000 letter of credit to complete a well on the property.

Union Bridge Developers Inc. alleges in court documents that town officials committed a breach of contract by trying to withdraw the money from Commercial and Farmers Bank in Ellicott City on Dec. 8 -- several months before the date agreed to in 1992, when the site on Route 75 was annexed to the town.

"The town was granted the ability to call upon the letter of credit only in the event that the developer failed to complete construction of the well by March 2, 1994," the developers said in documents filed Dec. 8 in Carroll County Circuit Court. "The town breached the agreement, in among other ways, by wrongfully drawing upon the letter of credit."

But Town Attorney John T. Maguire II said yesterday that the town has a right to call in the bond because it is no longer possible for the developer to complete the well by the deadline.

"There's a test well out there now, but it's a 10-month-to-a-year procedure to turn the test well into a production well," Mr. Maguire told Mayor Perry L. Jones Jr., a few town residents and reporters at a meeting in his Westminster office.

"It's clear it can't be completed in the time agreed that it would be completed."

He also said the developer had breached the contract "in a number of ways," such as not deeding to the town conservation land south of Route 75, which he said the town has requested several times through letters and other communications.

On Dec. 9, Carroll Circuit Judge Francis M. Arnold granted the developer an injunction to stop the town from getting the money, but the injunction expired eight days later.

The town reasserted its claim on the money Dec. 20, but the bank had not met the request as of yesterday, Mr. Maguire said.

Impending litigation will likely block development on the Phillips property -- in the planning stage for several years -- but few things were being done there anyway, Mr. Maguire said. The developer intends to build more than 400 units on the parcel, including single-family houses, duplexes and townhouses.

"The town is developing a strategy to deal with the case, but I have advised [the] council not to discuss it because it is in litigation," Mr. Maguire said.

Mayor Jones said he agreed with Mr. Maguire's assessment of the situation and added that "The town is still holding the playing cards. The farther they put us back, the farther we put them back."

Marlene B. Miller and Stanford G. Gann Jr., the Baltimore attorneys representing the developer, could not be reached for comment.

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