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Southgate developer threatens to sue town over building permits

Ingrid Mezo

T(8/11) The developer of the Southgate community in Emmitsburg has threatened to sue the town if it does not allot him the 11 remaining permits he needs to complete his housing project this September.

The town is only granting 20 residential permits per year until it resolves its sewage problems, based on a recommendation from the Maryland Department of the Environment (MDE), Mayor James Hoover said.

Apple Tree Homes President Tom Carolan, who is developing the Southgate project, presented town officials with a letter at the Aug. 1 town meeting explaining why he thought his company had been treated unfairly in the permit-granting process.

With the town's current permit allotment system, which uses a formula to allot permits based on the size of the development, the Southgate project will only receive four or five permits this September. This means that in the best-case scenario, Carolan will not get his last zoning certificate until 2007. If Brookfield, a larger project being developed by Ryan Homes in town, adds another 50 lots in 2007, Carolan will not be able to complete the Southgate project until 2008. And, if Ryan adds more lots in 2006, Southgate's completion will be pushed back to 2009.

"This I believe, is unfair, unjust and punitive to Apple Tree Homes," Carolan said. "...I've been a good neighbor... and I'm a small guy and Ryan Homes are a national builder."

The Southgate development will include 35 homes by its completion. Carolan's involvement in the Southgate project, which he had expected to complete by now, has left him financially strapped, he said. He cannot begin new projects until he earns the money from the completion of the Southgate project.

"We've only begun fixing our sewer problems," Mayor Jim Hoover said. "Until we see at least six months of service from the 3,000 linear feet mainline sewer pipe, we can't even begin to assess how much improvement that project has gained us for the town's sewer problems. Once we have an evaluation that we've made a notable improvement, I would feel more than comfortable going to the MDE to ask them to increase our tap allocations."

But, the town, not the Maryland Department of the Environment, initiated the 20-permit limit, Carolan said in a written statement to The Gazette dated Aug. 5.

"My attorney has spoken to Ms. Stephanie Williams who is an assistant attorney general for MDE who drafted the consent order," Carolan said. "She indicated to my attorney that a moratorium or a 20 permit limit was never their idea and was totally the town's suggestion which they went along with. The moratorium never came from them."

Carolan is requesting that the town ask the state to allow additional permits so he can finish his project.

It is possible for MDE to increase the number of taps in Emmitsburg, "but additional taps must be requested by Emmitsburg on a case-by-case basis," said Richard McIntire of MDE.

"Emmitsburg alone determines to whom those taps are allocated," McIntire said.

In addition, the town could be heavily fined by the state if it fails to make improvements to its sewage system as outlined in the consent order.

In 2003, Emmitsburg town staff provided the Board of Commissioners with a managed growth program which allowed 25 residential taps per year, but at the time, the commissioners did not approve the recommendation, Hoover said. The MDE's suggestion for a 20-tap restriction came while officials were deliberating the matter, so they decided to go with MDE's suggestion, Hoover said.

"We have gone around and around with Mr. Carolan on this issue," Hoover said. "The reason the board never agreed to the managed growth plan recommended by the staff is because too many people wanted to exempt too many things. And somewhere we had to draw the hard line in the sand...."

In addition, the town does not want to choose sides between developers, Hoover said.

"Both developers are asking for as many taps as they can get," Hoover said.

The town required Ryan Homes, the Brookfield developer, to provide an easement, and the town signed a contract with them guaranteeing 100 taps, Hoover said.

While there is no time span in the contract for the town to provide the taps, "that document was written in good faith when these resources were available, but then the MDE stepped in and we were obligated to comply with state law," Hoover said.

The town's ordinance, known as the "sewer tap allotment" did not become effective until March 2004. For months before that, Carolan tried to persuade the town not to pass the moratorium on development. In the meantime, the town stopped granting permits for development.

Carolan had already signed contracts with homebuyers, expecting that he would get the rest of his permits. He then had to dissolve contracts with some buyers when he did not get the permit allotment he expected. Carolan said the town is simply blame-shifting their moratorium on development to the state.

"This whole sewer allotment thing is a Trojan horse to bring in a moratorium on development," Carolan said. "I&I is the real issue."

I&I refers to inflow and infiltration of ground and surface water seeping in to pipes through cracks, which can cause overflows. Rain causes I&I, not additional taps, Carolan said.

Carolan could have held off on selling homes until he knew what was going to happen with the tap allocations, Hoover said.

"He didn't buy any permits without having taps," Hoover said. "What he continued to do was to sign contracts with potential buyers, and Mr. Carolan was well aware that some kind of managed growth program was going into effect. And he locked them into contracts without having a permit in place first. Ryan Homes did not continue to make contracts until the town finalized how many taps it could get a year."

Carolan feels he is being punished for taking the town to task on the moratorium, he said.

The town's current permit allotment formula does grant more taps to larger developers, but the town cannot grant Carolan more taps without being unfair to other developers, Hoover said.

"It's already cost me hundreds of thousands of dollars," Carolan said. "I spent $60,000 to $70,000 in legal fees to persuade the town to not allow moratorium to pass.

"I have tried every avenue of discussion with the town to try to avoid a lawsuit."

But, the town never returns his calls or his attorney's calls, Carolan said.

Carolan's lawyer never shows up to the town's meetings, Hoover said.

"We understand [Carolan's] is a small company and we feel for him for that, but we can't favor him for that," Hoover said.

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