Md. Town's Bid for Economic Stimulus Starts a Fight

When Trappe, on Maryland's Eastern Shore, applied for federal stimulus money to build a wastewater plant, it set off a controversy over sprawl.
When Trappe, on Maryland's Eastern Shore, applied for federal stimulus money to build a wastewater plant, it set off a controversy over sprawl. (Lisa Rein - The Washington Post)
By Lisa Rein
Washington Post Staff Writer
Monday, May 11, 2009

TRAPPE, Md. -- The 2,300 homes that a developer plans to build on cornfields on the outskirts of this Eastern Shore hamlet (pop. 1,146) were becoming increasingly remote as the economy soured. Then $120 million in stimulus money for Maryland water projects seemed to drop from the sky, and a local feud began to rage over sprawl and its cost.

Trappe -- whose motto is "19th-century charm, 21st-century progress" -- rushed to request federal money to fund an $18 million wastewater plant to treat sewage for the development's 5,800 planned residents. The project, called Trappe East, narrowly missed the cut this year but rose to No. 1 on the waiting list for stimulus funding. If another project dropped out, Trappe East would rise to the approved list.

But as soon as the coveted ranking became public, opponents of the project mobilized. Although town leaders supported the project, off Route 50, as a way to bring construction jobs and economic revival to the shore, local activists denounced the idea that stimulus money would jump-start a private development, especially one larger than any nearby.

Then Maryland Comptroller Peter Franchot (D) came out against the project, newspaper stories appeared, and old wounds reopened between Trappe and Talbot County, which found its own request for stimulus money, for a hospital project, competing with the town's. Now Trappe has withdrawn its request.

The dust-up over one community's push to tap into the $787 billion federal program underscores the clashing priorities of the stimulus process, which leaves most of the particulars up to local governments in an effort to begin projects quickly.

"People in the state of Maryland are killing themselves to save the [Chesapeake] Bay," said Barbara Padden, a preservationist with Friends of Trappe, which is fighting the housing development. "This is all being done to help the only developer who wants to build 2,300 houses in a cornfield."

Cheryl Lewis, vice president of the Trappe Town Council, said she thought the wastewater plant was exactly the kind of federal project the Obama administration would want. "My understanding from the president was that the money was supposed to stimulate the [local] economy," she said. "To us, it met the criteria. Building homes has an impact on the economy."

State environmental officials acknowledge that in the rush to review 650 water project applications in a matter of weeks to ensure that the federal money is spent quickly, they did not vet Trappe East as carefully as they would have liked.

"It did fall like a ton of bricks," Bridgett Kenney, planning director for the Maryland Department of the Environment, said of the stimulus money. "The time for vetting was very compressed."

She and others said the wastewater plant ranked high because the town proposed an aggressive treatment method to minimize discharge into the bay. But she called the vetting "a rough cut" that would probably fail additional land-use reviews because it is "inconsistent" with the state's growth goals.

Nevertheless, the stimulus law does not explicitly prohibit projects that promote growth, said Jag Khuman, chief of financing for state water projects. Much of the 924 acres owned by Trappe East Holdings Business Trust is designated for development under Maryland's "smart growth" policy.

From the start, the project was controversial. Talbot opposed it, saying it was out of scale with much smaller settlements on the shore. To circumvent some county approvals, the town annexed the property after a referendum in 2003. Trappe's land area more than doubled.

"The town put a lot of time and thought into how the land would be developed," Town Attorney Brynja Booth said. "In Trappe's defense, the land was targeted for development for over 20 years."

The developer had pledged to pay for a wastewater plant and other extras, including a new town hall, a backhoe and Trappe's first police officer. Booth said that if the stimulus money came through, the town would renegotiate the agreement, perhaps requiring the developer to pay off the debt on a recent upgrade of the town's existing wastewater plant.

Talbot leaders had put in their own request for federal stimulus money to extend water and sewer lines for a hospital expansion in Easton. The project is ranked 275 on a list of 484 projects because it would not provide a "direct and immediate environmental benefit," said Jay Sakai, a state environmental official.

"There's a lot of political issues here," said Ray Clarke, the county engineer.

Ryan Showalter, the Trappe East developer's attorney, said the stimulus money would allow the town to finance the water plant "as opposed to waiting until the real estate market picks up." The plant, while serving the new homes, would provide backup for the town's existing plant, in effect becoming a public amenity.

Franchot, whose chief of staff lives in nearby Easton, took the Department of the Environment to task at a meeting last month of the state Board of Public Works, which approves stimulus projects.

"I do not think the taxpayers of the country . . . are interested in having public dollars given to a developer to build a wastewater treatment plant for a sprawl development on the Eastern Shore," he said.

Although most of the land is designated as a growth area on state planning maps, some of it isn't, and extra review would be required for a stimulus grant, even though the proposal passed muster as a wastewater project, Planning Secretary Richard E. Hall said.

"People define sprawl and smart growth in their own way," he said. "Some of this project is [smart growth], and some is not."

In the end, public scrutiny killed the stimulus request. During a hastily called meeting last week, the Town Council voted to withdraw the project from consideration. In a letter to state Environment Secretary Shari T. Wilson, the council addressed "all of the untruths and inaccuracies" that had bubbled up about the project. The letter expressed disappointment that Franchot did not communicate directly with local leaders to express his concerns.

Booth said the council withdrew largely out of concern that Franchot would scuttle the project.

"If we're going to get a black eye, that's not a position we want to be in," she said.

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