Court takes waiver issue

Developers paid fees for OK to build near crowded schools

Lower courts denied case

Lawsuit claims county failed to meet agreements

Anne Arundel

March 20, 2002|By Andrea F. Siegel | Andrea F. Siegel,SUN STAFF

The state's highest court has agreed to hear developers' complaints that Anne Arundel County illegally swapped money and land from builders for go-aheads on subdivisions in areas where schools were crowded.

The argument, by two developers, was rejected by two lower courts. The Court of Appeals has scheduled arguments in the case for the fall.

The case centers on "waiver fees," a hot-button issue of the 1990s as school construction failed to keep pace with a burgeoning population. In exchange for cash payments, the county issued waivers that exempted recipients from laws that block new development unless local schools, roads and other public facilities can accommodate the new homes.

John R. Greiber Jr., lawyer for Halle Development Inc. of Silver Spring and Arundel Homes Inc. of Annapolis, said: "They misrepresented to us what they had the power to do. It's almost a bribe. [The county] says, `You want to build, give us this money.' ... This is government at its worst, taking other people's money and not using it, or using it for other purposes."

County law allows waivers under unspecified conditions but does not give a time frame for spending the waiver fees.

The developers, who pay impact fees for the effect their subdivisions will have on local public facilities, argue the waiver agreements are unconstitutional and amount to making them pay twice. They say that the county is taxing them without approval by the legislature.

The two developers are asking to have their waiver fees returned. They also want the court to order that fees paid by others also be returned.

Between 1991 and 1998, the county approved 334 school waivers, with developers paying $7.2 million toward increasing school capacity, county officials have calculated. The waivers allowed 3,563 potential lots to be developed, potentially adding 1,094 students to county schools, they said.

In this case, the county accepted $4.7 million and about 16 acres for a school site from companies controlled by Warren B. Halle toward his Seven Oaks subdivision in Odenton, and $34,000 from Arundel Homes for a Cape St. Claire subdivision.

Halle argues that although he first paid money for a waiver involving the Seven Oaks subdivision in 1989, the county has yet to build a school with that money in Seven Oaks. Although there has been other school construction in the area, Seven Oaks Elementary School is not scheduled for construction until next year.

Lawyers for the county say in their court filings that the lawsuit is the developers' effort to circumvent government restrictions on growth and to make more money. County Attorney Linda M. Schuett said yesterday she felt it was inappropriate for her to comment.

The county contends that the lawsuit, filed in September 2000 in Anne Arundel County Circuit Court, was filed too late to be considered, coming more than three years after Halle signed his agreements with the county and more than a year after Arundel Homes signed its agreements.

Senior Assistant County Attorney Hamilton F. Tyler, in petitions to the Court of Appeals, also wrote that some homes built under the pacts have been occupied for a decade. The developers got what they asked for, did not file administrative appeals, and it is unreasonable for them to complain now, he wrote.

"They wanted the projects to go forward as quickly as possible because they expected to reap substantial profits," Tyler wrote.

In dismissing the lawsuit last year, Circuit Judge Philip T. Caroom upheld the county government's ability to exempt developers from its requirements that bar new construction unless nearby schools, roads and other public facilities can handle the increased population. The Court of Special Appeals agreed.

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