A Chevy Chase developer fighting for a permit to build a condominium hotel on a prime piece of waterfront property in historic St. Michaels, Md., has gone ahead and bought the 1.6-acre plot despite a moratorium on harbor development recently adopted by the town.
Developer Gerald I. Goldberg said he bought the land because he thinks he ultimately will be successful in winning his suit against the St. Michaels Appeals Board.
The board revoked Goldberg's building permit a month ago after finding that the developer had "misrepresented" facts about the proposed development to secure the permit.
"We decided to buy the property because we are confident we're going to win," said George J. Goldsborough, an Easton lawyer representing Goldberg. Sources close to the sale said Goldberg paid $1.25 million for the waterfront lot, currently the site of the Lighthouse Restaurant and Marina.
Goldberg's application to build the controversial condominium-hotel, which was filed in April, said he planned to build a 50-unit hotel with a 40-seat restaurant and an outdoor swimming pool.
Town zoning inspector Lee D. Tabler reviewed the plans for the hotel and issued the permits at that time, despite concerns that notes on the application showed the plan originally had been drawn for 50 apartment units rather than 50 hotel rooms.
The property is zoned for maritime commercial development, which allows for hotels but not residential condominium units.
Later, town officials saw advertisements for the project that said each hotel "room" was actually a condo unit, most with two bedrooms, two baths, a living room and kitchen.
The town filed a request with the appeals board to have the permits revoked, saying that because the units would be owned by individuals and occupied by the owners for a period each year, they were condos rather than hotel rooms.
Goldberg filed suit against the board in Talbot County Circuit Court several weeks ago, citing misconduct by the board in his petition.
Goldberg claims that at least one member of the board "improperly engaged in an independent investigation of certain facts after the record was closed and while the matter was sub curia under consideration by the board , and in the process of this impropriety, compounded this error by considering irrelevant and impermissible evidence."
An affidavit filed by an Eastern Shore real estate broker with Goldberg's suit alleges that one of the members of the St. Michael's appeals board visited his office looking for information about the condominium-hotel project, claiming that he was seeking the information as part of an investigation by the Maryland Real Estate Commission.
Daniel M. Hill, a real estate broker and manager of Stephens & Co., Century 21, in Bethany Beach, Del., said that appeals board member Fred Mowbray asked about whether the company was selling shares in the as-yet unapproved hotel-condominium project. Hill said in his affidavit that his company was only taking reservations and refundable deposits.
A spokesman for the Maryland Real Estate Commission said this week that Stephens & Co. is being investigated and that Mowbray works for the state in the state office that handles investigations for the commission. The spokesman would not say, however, what the state was looking into or whether the investigation was related to the condominium-hotel project in St. Michaels.
Also pending in court are two other Goldberg petitions filed earlier in September. One asks for the court to make a judgment on whether the developer could provide parking on the basis that the hotel is actually a condominium, and the other questions the legality of a ten-month moratorium on harbor development adopted under emergency measures by the town in August. A hearing on those issues is scheduled for Oct. 25.
The town of St. Michaels has since adopted another moratorium on harbor development, one that is only five months long.
Town Manager William B. Nicholson Jr. said that the town followed the required procedures for adopting the second moratorium, which included public hearings and testimony, but that the town still believes the first one is also legal.
"We want to go back through the zoning ordinance and make sure it is as tight as we thought it was before Mr. Goldberg came to town," said Nicholson. "If it turns out we don't need the first moratorium, we can always rescind it."