A Maryland appeals court has ruled that Prince George's County revoked two developers' building permits "solely on the basis of political pressure" and should pay the developers substantial damages for their losses.
"This is a case of government running amok," said the Maryland Court of Special Appeals at the outset of a 51-page opinion that also ordered the Washington Suburban Sanitary Commission to share the liability.
The court found that the county and the WSSC, "after careful study and review," issued building permits to two Hyattsville developers for a $20 million apartment complex there, then, after construction started, withdrew the permits and refused to reissue them.
Former county executive William Gullett, "solely on the basis of political pressure," had the building permits revoked in April 1973, and the WSSC soon followed suit by canceling the sewer premits, the court found.
A county circuit court orginally had ordered Prince George's to pay the developers about $3.6 million in damages. The appeals court struck down about $1.5 million of that amount and ordered the lower court to recalculate the remainder. It was unclear how much in damages would ultimately be ordered.
The appellate court also ordered the water and sewer authority, which previously had been removed from the case, to share in the payment.
Though the building permits were issued in late 1972 and the sewer permits in January 1973, "it was on April 12, 1973, that the raw, naked power of government descended upon" the developers, according to the opinion written by Judge Alan Wilner.
On that date, under instructions from Gullett, the county licensing and permit director revoked the building permits previously granted to developers Herschel and Marvin Blumberg, according to the court's opinion.
Gullett, "solely because of community opposition to the height" of the prposed 36-story apartment tower, had the permit lifted, Wilner wrote.
"Mr Gullett apparently recognized that a building permit could not be lawfully revoked solely on the basis of political pressure, especially when construction had already commenced," Wilner wrote. "Some excuse had to be found.
"Gullet picked what he thought was the fact that the Blumbergs were not licensed as contractors, as required by the law" in order to obtain building permits, the opinion said. However, the Blumbergs had indeed obtained contractor licenses a few days before the permit revocation, Wilner wrote, and though they notified the county of this fact, their building project remained shut down.
Within days of the county revocation, the WSSC, "without notice to the Blumbergs, much less a hearing," suspended the water and sewer permits, Wilner wrote.
After Marvin Blumberg visited Gullett and was told the problem was the height of the buildings, he offered to reduce the two towers to 27 stories and began work on revising his building plans, according to the opinion.
"The charade continued, however, as the Blumbergs were spun around once more," Wilner wrote.
When the county declined to process the revised application, the Blumbergs called Gullett again and were told that the WSSC was holding it up and "he couldn't do anything about it," according to the opinion.
The brothers then turned to the WSSC, " which conducted what it termed a hearing and what the Blumbergs called 'a great show,'" the appelate ruling said.
The outcome was that the WSSC permanently revoked the permits it had earlier suspended and ordered a notation placed on the county building permit application that "sewer and water service availability not present at this time."
"The Kafkaesque drama was not complete," Wilner wrote.
The appellate court sent the case back to Calvert County Circuit Court for determination of damages. Prince George's County and the sanitary commission may appeal the ruling to Maryland's highest court, but lawyers have not decided yet if this will be done.
The 40 acres of land on Belcrest Road in the Hyattsville area where the project was begun in 1973 remain undeveloped today.