Potential Legal Hurdles Remain for MVGC Development Plans.

Although the majority of the residents that spoke against development on the Montgomery Village Golf Course provided clear and rational arguments against it, the Montgomery Village Foundation Board of Directors voted to support the concept plan that now shows about 370 townhouses and houses sprawled out on the property’s fairways.  If this is truly the direction that monument Realty and the MVF Board want to take the village, it will be interesting to see how this proposal gets implemented and how the current restrictive real covenants are negotiated away.  

We know that the covenant issues haven’t been discussed by the MVF Board yet because property zoning issues are never exempted from the Maryland Open Meeting (Sunshine) Act, and the board has not discussed real covenants at any of its public meetings.  It’s not clear why the MVF Board rushed to vote on the concept plan before having a thorough discussion about zoning issues and covenants, but maybe they will discuss them sometime soon.  A “real covenant” is a legal term that involves a restriction placed on the use of a property.  There are specific legal tests that help define whether a particular written document is a real covenant or not.  From what I have been reading, the document has to concern the land, has to be between entities that own and are purchasing the land (horizontal privity), and include a phrase that “binds” the restriction to the land and future owners, such as “this agreement is binding on all heirs and assigns”.  The 1980 “Bill of Sale” for the MVGC is not a recorded Deed, but it is in writing and certainly seems to concern the land.  Local residents held up this document in previous public hearings with the Maryland National Capital Park and Planning Commission about the potential development of the golf course, and that was sufficient to cause rejection of the prior development plans.  Mr. Doser knew all about that hearing.  A copy of this document has also been posted online at www.VillageCitizens.Org.  A few minutes with Google led me to other public documents online from the 1990s that included arguments by Mr. Doser himself that the property was only worth about $1.5M.  Perhaps there is a lawyer out there that wants to help clarify whether all the covenant issues is real problem or not (please comment!). 

Fortunately for those that want to develop properties with real covenants there are also ways to remove them.  All it takes is getting agreement to change the restrictive terms from everyone that benefits from it.  Normally this is the direct property abutters but sometimes a larger group such as a community is also involved.  Sometimes the public interest in such an action is so strong that the agreement is simple, and people will line up to sign an endorsement that change the property use.  Clearly the developer and some people on the MVF Board feel this might be the case for this property.  

Sometimes the endorsement comes through a negotiation with a property ownership group and involves payments,  e.g. $10,000.00 per property owner, in order to motivate their support and compensate them for the change to the covenant.  One property owner that supports the Monument Realty plan recently estimated that they had an impact of 25% on their property value, while another owner that was trying to sell their townhouse reported having to drop their price by $25,000.  Usually the last few signatories in this situation are the hardest to convince. 

Hopefully the MVF Board will have a strategy in mind on how to compensate the entire Montgomery Village Community for the loss of a Golf Course in the community.   This was a major and very visible amenity, and the real estate agents that spoke at the MVF Board meeting discussed its positive impact on selling homes in the area.   A new indoor swimming pool, or even the refurbishment of 2 of the aging swimming pools in the village (about $1.5M each) would seem a fair compensation for the loss of a golf course.   The proposed parks look nice, but unlike the golf course they will actually cost money to maintain, like getting a puppy dog as a gift.  Those areas are also wetlands and cannot be built on anyway.  (BTW - Did anyone see the flooding on the golf course last week?   Will the new houses on this property come with row boats?)

As if the 1980 Bill of Sale document wasn’t enough of a problem for the developer, there is the larger problem of the development map and plan for the MVF community.  Since planned communities show amenities on their development maps, that plan creates what is called a “reciprocal negative easement” on the property.  Maryland courts are very protective of property laws (thanks to cases like those brought by the Columbia Association) and covenants.   Since the MNCPPC showed the Montgomery Village maps and discussed the issues with potential bidders prior to their bidding for the property they became “informed buyers”.   That’s a pretty hard position to be in if the issue were to get challenged in court.  These type restrictions are what keep most planned community golf courses existing as golf courses, although they often change ownership several times as the price adjusts down a reasonable level (many golf courses for sale nationally sell for less than $1M even if they are in good shape).

If the MVF Board had delayed the April vote in order to look into these issues and properly discuss them in an open public meeting they might have had a lot more to consider, but there is still plenty of time since there are more votes yet to go.  It could take several months to several years to negotiate removal of real covenants, and by then the MVF Board could even tackle the issue of increasing the Town Sector Zone population density in order to allow more people to live here. Of course that complexity would all disappear if the property were still being used for golf purposes, “at least until the town sector zoning expires”, as agreed to by Mr. Doser and the Kettler Brothers Co. when the property was sold.   A new commercial office building with 77 luxury apartments would have compatible parking, fit within current TS zoning, and allow the sale of the golf course to the MVF for continued operations.  (Sounds a lot like the Vision 2030 plan that most residents supported). 

Luckily, as claimed in a recent court filing, the developer said that they would make $17.5M in profits on the development of 550 residential units here, and they are still proposing to build 2/3 of that number (with profits of about $11.5M).  Some of those profits might get used to compensate the community and neighbors in order to gain their agreement to remove any “real covenants” and “negative easements” that currently affect the property, but there seems to be enough profit there to make it all work out.  Certainly the MVF Board will be considering the property rights and values of the community and MVGC neighbors if it continues to support the developer's proposed concept plan.