Planners Question Repaying Clarksburg Developers
Repaying Developers Could Violate Law

By Miranda S. Spivack
Washington Post Staff Writer
Sunday, May 20, 2007

The Montgomery County Planning Board has cast doubt on a plan to repay developers at least $60 million for improvements in Clarksburg, saying the County Council might have erred when it gave preliminary approval six years ago.

Developers told the Planning Board they would create the roads, green space and sewers in exchange for development rights. The promise was part of a mid-1990s agreement to lessen the strain on the county budget for services needed by new development.

But several years later, the developers asked the council to set up special taxing districts, known as development districts, in Clarksburg to collect money from residents to repay the developers for the infrastructure improvements.

The Planning Board said in a letter to the council released Friday that the proposed districts could be set up even after a development is approved but that the Clarksburg funding proposals appear to violate the law. The districts are awaiting final council approval.

County law does not envision creating taxing districts to benefit a single developer, as the Clarksburg proposals would, unless the developer is building amenities for the wider community, the board's letter said. The letter also noted that the board advised the council in 2001 and again in 2002 that it could change the law to create the type of taxing district Clarksburg's developers are seeking.

But the council never changed the law, and the Planning Board suggested in its letter that that might have been a mistake.

"As we read the law now, it would appear that would be necessary," said board Chairman Royce Hanson, a lawyer and planner.

The board's letter also said it is bad public policy to allow a single developer to have its own taxing district, saying all developers or residents should share the costs of building needed community amenities.

"The concept of development districts is not well suited to single-developer projects. . . . Such infrastructure should be provided, if feasible, through the cooperation of several developers, or through a fee or tax . . . on all users or all property owners," the letter said.

The controversy arose in late March when the Clarksburg Town Center Advisory Committee, a community group, complained that residents would be taxed $1,500 or more per household annually for 30 years. The committee questioned whether residents had been properly notified and said the tax would shift financial obligations illegally from developers to residents.

Several county agencies are examining those claims, and their reports are expected in a few weeks.

Spokesmen for Newland Communities, the developer of Clarksburg Town Center, did not return calls seeking comment.

Similar proposals for special taxation districts in Clarksburg Village and Arora Hills, part of the planned 14,000-home Clarksburg community, also await council action.

Hanson said the board might not have been as forthright in 2001 and 2002 as it needed to be with the council about the flaws in the law and the need to amend it. "It could be that the board didn't stress that enough," he said. He was not a member of the board then.

Amy Presley, head of the Clarksburg advisory committee, said she was "pleased but not surprised that the Planning Board chairman and the board agreed with the findings in our report. We look forward to seeing how the County Council is going to respond." The report said the council failed to set up the Clarksburg Town Center taxing district correctly and also questioned whether the district could be set up after the development was approved.

Council President Marilyn Praisner (D-Eastern County) said her staff was examining the Planning Board's letter. Praisner said the board validated the use of the special taxing districts, and she noted that the board said they could be set up after a development is approved.

"The Planning Board said the Clarksburg Town Center Advisory Committee was wrong in saying that the development district could not be used to fund things the Planning Board had reviewed as part of development approval," she said.

The debate over the tax could create a political problem for many recently elected county lawmakers. Several new members of the council, as well as County Executive Isiah Leggett (D), pledged during last year's campaign to make developers more accountable for the effects of growth on the county. Leggett has asked Marc P. Hansen of the county attorney's office to examine legal issues linked to the development tax.

The county's independent inspector general, Thomas J. Dagley, is also examining county funding for the special taxing districts.

County budget officials have been allocating the money to repay developers for at least three years, even though the tax has not been finally approved by the County Council, budget documents show. It does not appear that any payments have been made. Dagley said he is examining the road projects to gain a better understanding of how county officials estimate costs and allocate funds.