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Laurel Racing Association, L.P. v. Anne Arundel County

Court of Special Appeals of Maryland

July 25, 2017


         Circuit Court for Anne Arundel County Case No. C-02-CV-15-000104

          Meredith, Nazarian, Moylan, Charles E., Jr. (Senior Judge, Specially Assigned), JJ.

          OPINION [*]

          Nazarian, J.

         Back in the last decade, Laurel Racing Association ("Laurel Racing") began planning to redevelop the Laurel Park horse racing complex. As part of that process, Laurel Racing reserved from Anne Arundel County (the "County") the additional water and sewer capacity its new facilities would require. After reviewing the proposed plans, the County's Office of Planning and Zoning ("OPZ") approved, in 2008, the allocation Laurel Racing requested, and Laurel Racing never appealed that decision.

         Reserving water and sewer capacity isn't free, and when a substantial fee came due in 2013, Laurel Racing challenged the Department of Public Works's ("DPW") method of calculating the capacity the project needed, arguing that the long-ago-approved figure had overstated its incremental water and sewer needs by failing to credit the racetrack's current usage. The parties exchanged data and studies, and DPW sent Laurel Racing a letter on February 25, 2014 offering to reduce the allocation. The question for us is whether this letter was an appealable agency action. It wasn't.

         I. BACKGROUND

         In 2006, Laurel Racing submitted to OPZ a Development Application that proposed a wholesale renovation of the racing complex. The application included a sketch plan that included demolition of the existing grandstand and renovations to the site that would reduce the seating capacity for horse racing (which had become less popular) in favor of commercial and retail space and space for the long-awaited arrival of "video lottery terminals." The sketch plan also included a required water and sewer capacity calculation worksheet that concluded that the project would require 1, 501 equivalent dwelling units ("EDU") of new water and sewer capacity. The EDU worksheet outlined future uses only because "[a]t the time of submission, the project engineer was unaware of any County policy or procedure where a developer could seek to offset proposed EDU usage with existing usage."

         The Anne Arundel County Code (the "AACC" or the "Code") provides that "[f]or a property that is required to pass the test for adequate public water supply facilities or adequate public sewerage facilities, [DPW] shall make an allocation on the date of approval by [OPZ] for adequacy of public water supply facilities as provided in § 17-5-202 of this Code." AACC §13-5-402(b) (2005). An allocation, a "reservation, for use by a particular property, of available capacity, " AACC § 13-5-401, is required if, "due to development activity on the property, the property is required under Article 17 of th[e Code] to pass the test for adequate public water supply facilities or adequate public sewerage facilities; or the property is otherwise connecting to the County water or wastewater system, " AACC § 13-5-402(a). DPW does not analyze on its own whether a subdivision proposal adds to or displaces existing water and sewer facilities-it relies on the developer's engineer to determine the project's impact. In two letters dated November 21, 2008, OPZ approved Laurel Racing's sketch plan and allocated 1, 501 EDUs of water and sewer for the project. Laurel Racing did not appeal this decision.

         Water and sewer capacity are finite resources, and the Code imposes charges on developers to reserve EDUs for future development. "For property receiving an allocation in conjunction with approval by [OPZ] for adequacy of public water supply facilities . . ., the owner of the property shall pay, for each equivalent dwelling unit: (1) an allocation reservation charge . . . as computed by [DPW] . . .; and (2) [a] capital facility connection charge . . . ." AACC § 13-5-403(a). Allocation reservation charges were due immediately, and Laurel Racing paid them. The capital facility connection charge ("CFCC") and deferral fees did not come due until the fifth anniversary of the allocation, and on November 1, 2013, DPW sent Laurel Racing Allocation Billing Statements due on November 30-one for water EDUs totaling $19, 974, 600 and one for sewer EDUs totaling $4, 328, 640.

         Sometime in 2013, though, Laurel Racing had learned that the County had, as the County's Board of Appeals later put it in a Memorandum Opinion we discuss below, a "policy or procedure in effect at the time of the 2006 submission to provide EDU credits for existing facilities. That is, if a use had existing EDUs, the County requires that a developer reserve only the number of additional EDUs that would be required to serve the redevelopment." (Emphasis in original.) The then-DPW Director explained to the Board that these credits were meant to ensure "that an owner doesn't pay the [facility connection charge] for EDUs that they've paid to the County in the past, " and that DPW was responsible for calculating the new EDUs required. Accordingly, Laurel Racing "contacted the County about the concern that [it] w[as] being-flows were being double counted, and they were not being adequately considered for what existing flows [it] already had in the system, what existing capacity [it] had in the system."

         On December 12, 2013, Laurel Racing's representatives met with DPW to discuss the possible double-counting. Rather than requiring a new EDU worksheet, the County asked "if [Laurel Racing's] consultant could come up with a way to analytically compare the existing use, dis-aggregate . . . what's in the grandstand [a mix of retail and commercial space], to an existing use number so that [DPW could] compare it to what's proposed." DPW followed up on the meeting in a letter dated December 23, 2013:

As discussed during the meeting, [DPW] has agreed to give your engineers through January 31, 2014, to provide information regarding existing uses that may have been part of the EDU calculation previously provided. [DPW] will thereafter review the information and make a revised EDU calculation, if appropriate.
If the number of EDUs is revised, the original allocation date will still apply and all associated charges will be due in accordance [with] the County Code based on the original allocation date of November 21, 2008. Therefore, the [CFCCs] and the capital facility deferral fee for the adjusted number of EDUs will be due no later than April 30, 2014, or the allocation will lapse. . . .
The County will stay the late interest on the outstanding [CFCCs] until February 28, 2014. This time was determined to be roughly 30 days for the new information to be provided to DPW and 30 days for review and final agreement.

         DPW explained that "[a]s th[e double counting issue] came to [its] attention after 2008, . . . [DPW offered credits because it] was trying to reach a reasonable settlement of what the existing capacity ...

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