MD Court of Appeals Holds Developer was Entitled to Receive Transportation Impact Credits Pursuant to County Code

This post was authored by Matthew Loescher, Esq.

In this case, the court reviewed whether the County Board of Appeals of Anne Arundel County erred when it denied a request by a developer, 808 Bestgate Realty, LLC, for transportation impact fee credits in connection with road improvements that it made to a county road as part of a redevelopment project. Pursuant to the Anne Arundel County Code, §17-11-207(c), when transportation improvements are constructed in connection with a development project that provide “transportation capacity over and above the adequate road facilities requirements” required by § 17-5-401 of the Code, transportation impact fee credits shall be allowed.

The County contended that, in order to receive transportation impact fee credits under § 17-11-207(c), the proposed development must first fail to satisfy the APF road test under § 17-5-401(a)(1) and (2) – this, requiring that the developer undertake mitigation approved by the County under subsection (3). The County further claimed that, if and only if a mitigation plan is required, and the mitigation improvements go “over and above” the necessary to satisfy the APF road requirements, the developer is eligible for transportation impact fee credits. As such, the County asserted that it has discretionary authority to enter into a transportation fee credit agreement. The record reflected that the County was unwilling to enter into such an agreement because it believed the road improvements did not provide a general benefit to the public. Conversely. Bestgate argued that there was nothing in the plain language of § 17-11-207(c) that conditioned the availability of transportation impact fee credits upon the development failing the adequate public facilities (“APF”) road requirements – thereby triggering mitigation improvements. The court found Bestgate’s plain language interpretation was supported by the County’s approval of transportation impact fee credits on similar projects that did not involve the construction of mitigation improvements to satisfy the APF road requirements. Bestgate further cllaimed that its interpretation did not place the developer in a decision-making role vis-à-vis County capital road improvement projects, noting that the County’s Engineer Administrator reviewed and approved the off-site improvements to Bestgate Road.

The court found that the “agreement” required under § 17-11-207(c) related to the process for awarding the credits, such as the timing and duration, and did not provide the County with discretionary authority to deny credits for non-site related transportation improvements that fell within the plain language of that subsection. Therefore, the fact that the Code required that the credits were to be memorialized in an agreement did not negate the mandatory language in subsection (c) that transportation impact fee credits for non-site related improvements “shall be given”. Accordingly, the court held that under the plain language of the Code, Bestgate was entitled to receive transportation impact fee credits, and the Board erred in its interpretation of the Code.

Anne Arundel County, MD v 808 Bestgate Realty, LLC, 2022 WL 2526948 (MD 7/7/2022)