Money talks for developers to push projects Some call incentives to communities a form of bribery, blackmail

August 05, 1998|By Gady A. Epstein and Edward Lee | Gady A. Epstein and Edward Lee,SUN STAFF Sun researchers Robert Schrott and Leigh Poitinger contributed to this article.

Developers are doing more than promising to plant pine trees, build sidewalks and install road signs to gain neighborhoods' support for projects these days.

Increasingly, they're offering to write checks, even as much as $1 million.

As the Baltimore region builds at a dizzying pace, developers are forced to appease people who live near their proposed projects. Like other builders nationwide, they are encountering better-organized neighborhood groups with costly demands.

With several developers offering cash and other inducements -- and some communities extracting pricey concessions unrelated to projects -- some land-use experts argue that the public good isn't being served by what they call a legal form of bribery or blackmail.

In a recent example, the developer of a huge housing and commercial project in southeastern Howard County offered to create a $100,000 fund for two nearby community associations.

Residents rejected the proposal from Stewart J. Greenebaum, president of Greenebaum & Rose Associates, seeking other concessions. A breakdown in negotiations has delayed county action on the proposal to build 1,168 homes in Fulton on what is known locally as the Iager farm.

In other examples:

A Jessup homeowners group last year accepted a donation of at least $50,000 annually and a community center from parking lot magnate Kingdon Gould Jr., who gained county approval for a rock quarry.

The Middle River Racing Association offered to build eight public ball fields and a skateboard park to mollify several western Anne Arundel County community groups opposed to a controversial 54,800-seat racetrack this year. The groups rejected the deal and the developer is now pitching the track to residents in Pasadena with a vague offer of "assistance" to a local elementary school.

Determined to retain open space, an Annapolis civic group last year turned down a $1 million offer from U.S. Home Corp. meant to win support for a 72-home development on 28 acres in Heritage Harbour. Since county officials said permission to develop was based on the group's endorsement, the firm has put the project on hold, says Philip Barber, division president for U.S. Home.

Financial sense

Paying community groups makes financial sense for many developers. Time-consuming zoning disputes cost hundreds of thousands of dollars in legal fees, land costs and wasted opportunities.

Developers have long offered to scale back designs, pay for landscaping and designate more open space. Now cash payments and favors are gaining acceptance as deal-closers when routine concessions aren't enough, some land-use attorneys say.

"The developers want to get in, they want to move very fast, and it makes economic sense to settle with these groups," says Dwight H. Merriam, a Hartford, Conn., attorney who advises his commercial developer clients to do "everything" reasonable to satisfy neighbors of a project.

Merriam figures 10 percent to 20 percent of his deals with residents involve cash payments -- others include favors unrelated to a project. He said one client pushing a shopping mall expansion a couple of years ago paid more than $3 million to improve a nearby brook that had flooding problems -- even though the expansion would have no impact on flooding.

"If you can make a half-million dollars a year on a location," Merriam says, "why would you spend a half-million dollars [in legal fees] and take a year or two or three to fight it out with the neighbors, when if you just paid them a certain amount of money you could be up and operating?"

Merriam has given presentations to other attorneys from around the nation, advising them to learn the relatively new science of courting neighborhoods before moving in with a project: Poll residents, conduct focus groups, hire public relations consultants and, above all, show a willingness to work with the community.

The alternative, says Anne Arundel County Councilman George F. Bachman, is "developers who come in and do not work with the community and they run into a brick wall."

Concern over methods

Some preservationists and land-use experts worry that this businesslike calculus in zoning disputes could pervert the development process. Although cash payments to a few key neighborhood groups may help secure big projects, an entire county may feel the ripple effects -- more students in schools, more cars on the roads -- long afterward.

"You have different communities holding out for more and more and more until it really doesn't become a discussion of the plan and how the plan would affect a community," says Robert S. Lynch, a Bel Air attorney and former planning director for Harford County who usually represents developers. "It's just who gets money."

Some developers and community groups defend such cash payments as fair compensation for the effects new projects can have on a neighborhood, akin to impact fees required by local officials.

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