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Developer of Maugansville project sues county

January 29, 2007|By TARA REILLY

HAGERSTOWN

A Ocean City, Md., developer has filed a lawsuit against Washington County that claims the county delayed a housing project in Maugansville, then charged the company higher building fees than agreed upon.

Magnum Center LLC is seeking at least $500,000 in damages and asking that the county be prevented from charging the higher fees for the Seneca Ridge development off Maugans Avenue.

The developer filed the suit Friday in Washington County Circuit Court against the County Commissioners, the Planning Department, the Department of Permits and Inspection, and the Division of Public Works.

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County Attorney John Martirano and Thomas E. Lynch III, the attorney for the developer, said Monday that they could not comment on the suit.

The developer plans to build 73 single-family homes, 93 townhouses and 120 apartments/condominiums. Some units have been built.

The suit alleges the county hasn't provided the developer "in a timely manner" with the necessary sewer taps to serve the development. During the delay, the county increased its excise tax to $13,000 per new single-family home and $15,500 for new multifamily units - like apartments - and is requiring the developer to pay those amounts, according to the suit.

The tax doubles per unit if the developer builds more than 25 units per development in a year, according to the suit. The suit also states the county raised the excise tax three years earlier than allowed by statute.

At the time the county approved the project, the excise tax in place was $1 per square foot, according to the suit. In addition, the developer and county agreed that a $5,600 fee would be paid per dwelling unit under the Adequate Public Facilities Ordinance (APFO). The developer believes it should pay the charges in place at the time, the suit states.

The excise tax is charged to new construction.

"All parties to these transactions reasonably and justifiably relied on the fact that the maximum APFO and/or excise tax burden ... would not exceed $1 per square foot ... and $5,600 per unit APFO fee," the suit states. "Nevertheless, the County amended the (excise tax ordinance) and is now seeking to impose on Magnum and its builders excise taxes that far exceed the $1 per square foot cap ..."

"Magnum, with the Project in the midst of construction, is now facing the prospect of nearly $4 million in additional fees/taxes to complete the Project, over $2 million of which will be directed to school construction ..." according to the suit.

The suit contends that the developer should not have to pay school construction costs, because the schools in the area were considered to be adequate under the APFO at the time the county approved the project.

The county's actions have resulted in a loss of revenue for the developer and caused the builder, Patriot Homes, to terminate a contract with the developer, according to the suit.

The developer alleges "the County has made it economically infeasible for Magnum and Patriot to develop the Project as planned," the suit states.

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