Golf rift has a round in capital

Owner of the links doesn't want MEDCO as his competitor

March 01, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

Charlie Birney says he has nothing against the Maryland Economic Development Corp. and the 118 projects it has undertaken since it was created in 1984.

He just doesn't want the state corporation going into the golf course business, in competition with his course in Anne Arundel County.

Birney's dispute with MEDCO ended up before the Senate Budget and Taxation Committee yesterday, as lawmakers held a hearing on legislation giving the corporation broad authority to launch projects - even if they compete with private businesses - everywhere in Maryland.

MEDCO contends that the bill simply clarifies the authority it has had for 17 years - ever since the General Assembly created it to redevelop the closed Fairchild aircraft plant in Washington County. Since then, MEDCO has financed a variety of projects - including the Rocky Gap golf course and conference center near Cumberland.

Opponents charge that the legislation is a power grab that drastically expands MEDCO's role and gives it almost total immunity from court challenges.

"What MEDCO is asking for is for this legislature to give it unlimited power to invest anywhere, to compete with the private sector without limitation," said Devin John Doolan, lawyer and lobbyist for Birney's Atlantic Golf.

One of the projects that would become safe from legal challenges if the bill passes is MEDCO's plan to develop a 36-hole golf course on Fort Smallwood Road on behalf of the county government. Birney, whose company owns the 18-hole South River Golf Links in Edgewater, about 40 minutes away, says competition from the partially tax-exempt MEDCO could put his course out of business.

MEDCO's plans to create a course to be named Compass Pointe halted last year after Birney's lawyers wrote a letter to the corporation threatening to sue. The letter pointed to language in the law saying MEDCO's purpose was to invest in economically distressed areas of the state where private businesses have not shown a serious interest.

The letter was enough to spook bond buyers for projects that didn't fit clearly within the law. Rather than fight the matter in court, MEDCO brought the dispute to the General Assembly, seeking what the executive director, Hans F. Mayer, called a "clarification."

The language in the bill struck some legislators as extraordinarily broad. Del. Shane Pendergrass, a Howard County Democrat, said that when she asked Mayer at a House hearing last week what kinds of projects would not be allowed under the legislation, he could not think of any.

The legislation, which has powerful backing in the House and Senate, removes language stating the Assembly's intent that the corporation operate in areas of the state "experiencing significant economic dislocation and distress" - a description that likely would not apply to Arundel.

With little complaint from the General Assembly, MEDCO has paid little attention to the clause for years as it has expanded its reach into almost every county in the state. The corporation's assets have grown from $50 million in 1994 to $674 million last year.

The bill also eliminates language giving MEDCO the job of developing vacant or underutilized industrial sites and other resources the private sector is not interested in developing.

Instead, it allows MEDCO's board, "in its sole and absolute discretion," to invest in any project that meets an almost open-ended definition. The bill also would give MEDCO broad new lending authority and remove a requirement that it invest its money in Maryland banks.

Several senators expressed concern about the sweeping language of the bill.

Sen. Christopher Van Hollen questioned a provision that would let MEDCO finance any projects that "generally promote the present and prospective health, happiness, safety, right of gainful employment and general welfare" of Maryland residents. "You could open a bookstore under this legislation," the Montgomery County Democrat said.

Mayer played down the impact of the bill, saying it allows no projects that aren't allowed now. He said the purpose of the bill was to reassure bond buyers.

Few of the projects MEDCO has undertaken had stepped on the toes of private businesses until it accepted Anne Arundel's invitation to bid for the lead role in developing a public golf course in the north county. MEDCO's proposal to develop the course with tax-exempt bonds won out over two private bidders.

Mayer defended MEDCO's involvement, saying the state has a long tradition of developing public courses for "affordable golf."

"We feel this was an appropriate and is an appropriate project for MEDCO," he said.

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